AI & Real Estate Contracts

Did you know that many people are uploading real estate contracts into AI platforms such as Chat GPT to get analysis of what they’re going to be signing?

However, what many people do not understand is that Chat GPT is not always correct when it comes to interpretation of contractual terms and how they relate to state and federal laws. Sometimes AI platforms even hallucinate with “pie in the sky” answers.

This could lead to making a catastrophic mistake in any purchase, sale or lease of real estate.

That’s one good reason to consult a real estate professional with years of experience. An experienced broker should have a knowledge base that allows them to solve many problems and explain many different scenarios to clients so their clients can then make the best business decisions for themselves.

FINCEN Residential Rule Postponed Until March 1, 2026

But TARGETED GTOs are still in force…

FinCEN issued a temporary order granting exemptive relief from the reporting requirements. In the interim, any Real Estate Geographic Targeting Orders will remain in effect.

https://www.fincen.gov/news/news-releases/fincen-announces-postponement-residential-real-estate-reporting-until-march-1

https://www.fincen.gov/news/news-releases/fincen-renews-residential-real-estate-geographic-targeting-orders-0

Phones

Phones are absolutely essential in real estate. But they, along with email addresses, can be compromised. My home telephone number was recently transferred without our authority. Our alarm system was set off as a result. And of course these things happen when they can result in the most chaos! So now I get to waste another couple of days changing my phone number on all of my licensing records, web sites, etc. (This really peeves me since we’ve had that number–a “beachside” number for over 13 years.)

There is literally almost no way to ever fix these things now with the widespread use of AI to filter communications. This type of occurrence does not fit into the standard things AI is trained to filter for if you call for assistance. One good thing is that the AI actually transferred me to a human being!

The moral of this story is that YOU have to be sure at all times that you are communicating with the actual real estate broker you think you are communicating with. Emails can be impersonated to steal escrow funds, etc. So be careful out there.

I’ve been a licensee for more than 42 years. I thought I had seen all the ways things could be compromised, but this has certainly enlightened me a little more.

If a broker is asking you lots of questions if you call to list vacant land or a second/vacation home, they’re doing it to verify your authority to list a property. If you are the rightful owner, this is a safeguard to protect your interests. So please do not be offended. Many title companies are seeing an increase in fraudulent impersonation of owners.

I also recommend that even if working with a seller or buyer directly that you always use a title agent!

Residential FINCEN Rule Goes Into Effect for Entire US on December 1, 2025 (Will Affect ALL Cash Buyers)

house of dollars

QUESTION: Is it a transfer of real property containing a structure designed for 1-4 family occupancy, land on which transferee intends to build such, or shares in a cooperative housing corporation to a legal entity or trust without financing through an institution required to have AML procedures? IF YES, A REPORT IS REQUIRED!

Exemptions include:

Transfers to a trust by an individual, without consideration and where transferor is both a beneficiary and a settlor

Transfers resulting from the death of an owner including to or by a P.R.

Transfers by or to bankruptcy estates, trustees or court appointed receivers pursuant to bankruptcy proceedings

Transfers that create, convey, modify or terminate an easement

Transfers pursuant to a final divorce order, judgment or settlement agreement

Transfers supervised by U.S. courts

Transfers to a qualified intermediary in a 1031 exchange

Transfers that do not involve any “reporting person”

ALTA INFO/FORMs:

https://www.alta.org/file/ALTA-FinCEN-Seller-Collection-Form-v-10

https://www.alta.org/file/ALTA-FinCEN-Buyer-Collection-Form-v-10-fillable

If the FED Cuts Rates in September Will Mortgage Rates Decline?

Actually, the FED doesn’t control mortgage rates, they follow the 10 yr. US Treasury rate. It’s even a possibility that mortgage rates could rise if inflation stays above the FED’s desired rate and/or the job market/unemployment rises to recessionary levels.

One circumstantial indicator of a recession is a sharp decline in residential construction employment. Keep your eye on this one. Right now, new home builders are flush with inventory, offering better interest rates, etc. They are competing with the resale market, so if you are trying to sell your home right now, you may not be in a position to compete with them. The new home builders don’t want to keep large inventories of homes on their books.

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