Sunday, October 3, 2010

How to Protect Your Identity When Selling Your Home

How to Protect Your Identity When Selling Your Home
Most experts agree that the most important piece of personal information that identity thieves attempt to steal is your social security number. When selling a home in California, a seller is required by law to complete a form commonly referred to as “FIRPTA” (Foreign Investment and Real Property Tax Act). The form lets the title company and the buyer know if the seller is not a U.S. citizen. Not being a U.S. citizen will require certain withholdings from the seller’s proceeds, but that’s a story for another time. One of the pieces of information that can be asked on that form is the seller’s social security number.
When representing buyers, it never ceases to amaze me that some seller’s agents do not safeguard this information. As part of the disclosure process, I have been provided with a copy of this form (typically via e-mail) with the seller’s social security number in plain view. As the buyer’s agent, I must review this document with the buyer and have them sign at the bottom to acknowledge that they’ve received it. Then I provide them with a copy of what they signed. I like to think that all the clients I work with are honest and ethical. But what if they accidentally leave their folder of documents at a coffee shop? Things happen. Do e-mails always reach their intended destination? As careful as I try to be, sometimes I get an e-mail address wrong. What if that seller’s agent sent this form to an unscrupulous thief? That’s when the trouble starts.
As a seller, here’s what you can do protect this from happening. One thing the California Association of Realtors did right was change the form so there is no longer an area for the seller’s social security number on the form. Unfortunately, I still see plenty of the old forms being used by seller’s agents. As a seller you are asked to sign a ton of forms and while you should read everything you sign, you usually rely on your Realtor to tell you what the forms mean. But when it comes to filling in your social security number, stop! There is another preventative measure you can take so you can meet the requirements of selling your home and not run the risk of your social security number being advertised on the internet.
There was a little known law passed a year or two back to prevent this type of activity from occurring. As a seller, you can provide your social security number directly to the title company’s escrow officer instead of giving it to your agent. Under the new law, the escrow officer is a qualified 3rd party that can legally acknowledge the FIRPTA form for the buyer without the buyer actually seeing the form. The title company will need to record the sale and will need your social security number anyway so this saves you time and helps protect your identity.
For the top 10 ways to get the most money when selling your home, call or click Gary Nobile at or (408) 247-4029.

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