By September 14, 2008 0 Comments Read More →

Should Real Estate Brokers Be Fingerprinted?

There’s little doubt that in the past few years we have become far more security-conscious as a nation. Hidden and not-so-hidden cameras are everywhere while metal detectors can be found at airports, government agencies and even public schools.

Given this trend it’s not surprising that security is a growing issue within real estate. Theft is a concern with open houses and taking an unfamiliar person to an unfamiliar property may not always be the best idea for brokers and agents. It’s now a common requirement for brokers and consumers to first meet at brokerage offices before looking at homes so drivers’ licenses can be copied.

But safety in real estate is not only an issue for brokers and salespeople. How do consumers know that the person who wants to list your home or help you buy does not have a history of gross fraud or violent crime?

Because large sums of money are involved, jurisdictions generally limit the ability of convicted felons to obtain a real estate license. Typically such bans are not absolute, the theory being that after people have paid for their crimes they should have an opportunity for redemption and rehabilitation, opportunities made realistic with the right to earn a living.

So how do regulators know that “John Doe” is really John Doe at a time when identity theft is rampant? And how do they check Mr. Doe’s past record?

Application forms routinely require individuals to self-report criminal backgrounds and regulators say that many prospective licensees with a crime in their past do report such incidents. But self-reporting does not always occur, one reason regulators are turning to more exhaustive background checks.

Several states, such as Florida and Oregon, require fingerprints. Once collected, the prints are sent to a national database for review. This process, however, is not foolproof: it can take time to obtain reports and not all felonies have been entered into the national database.

A different approach is to require credit reports, a system used for brokers in Maryland. A credit report shows someone’s financial standing as well as their driver’s license number and “public records” such as tax liens, judgments and bankruptcies. Credit reports, however, do not include police records.

Another security check occurs when applicants take exams to obtain licenses. Many states require that applicants present government-issued photo IDs at testing sites to assure that the person taking the test is actually the same person who may ultimately receive a license.

And what if someone does have a criminal record and self-reports? Regulators say they do consider granting licenses in such situations, depending on the facts and circumstances in each case. For instance, was the crime related to real estate? Was violence involved? A sex offense? Was it a minor matter or major? How much time has passed since the offense?

It seems likely that jurisdictions will increasingly adopt tighter security measures with licensees. Checking drivers’ licenses or state-issued IDs at real estate exam sites costs nothing and can flush out spoofers. The growing use of electronic fingerprint systems makes such identifications faster and thus more attractive to regulators. Moreover, the programs now in place do catch people who should not be licensed or who are taking tests for others.

Regulators are careful to point out that their intent is to confirm identities and prevent inappropriate licensing. There is no interest in private matters.

Are fingerprints and other identity checks necessary for brokers and salespeople? While it may seem invasive at first glance, people are not always who they seem to be. Long ago there was a local property for sale-by-owner. The price was attractive and the sellers collected deposits from several bidders on a busy Sunday afternoon. By Monday both the deposit money and the “owners” were in Brazil. It turned out the sellers weren’t owners at all, just house sitters with plane reservations.

Published originally by Realty Times on November 11, 2003 and posted with permission.

Technorati Tags: , , , , , ,

Posted in: Library

Post a Comment