By: T.R. Smith Esq.
Protecting Your Money: How to Avoid Wire Fraud in a Real Estate Transaction
Buying or selling a home is one of the biggest financial transactions you’ll ever make. But did you know that real estate closings are a major target for cybercriminals? Every year, thousands of buyers and sellers fall victim to wire fraud schemes, often losing tens or even hundreds of thousands of dollars. These scams continue to get more sophisticated and once the money is gone, it’s usually impossible to get back. Here’s what you need to know to protect yourself and your investment.
What Is Wire Fraud?
Wire fraud in real estate transactions typically occurs during the closing process when large sums of money, such as your down payment or sale proceeds, are being transferred via wire. Criminals hack into email accounts (yours, your agent’s, or the law firm’s/title company’s) and monitor communication. Just before closing, they send a fake email that looks legitimate, often with updated or urgent wire instructions. If you follow those instructions, your money ends up in the scammer’s account. These emails often come from addresses that are nearly identical to real ones and may include accurate details about your transaction, making them hard to detect.
How to Protect Yourself
1. Be Suspicious of Any Email About Wiring Instructions. It doesn’t matter how professional it looks—never trust wiring instructions sent by email. If you receive any message that says the account number has changed, or that you need to act quickly, it’s likely a scam.
2. Always Call to Verify. Before wiring any funds, call your closing attorney or title company directly. Use a trusted phone number, one you received in person or from an official website, and confirm the account number before sending any funds. Never use a phone number listed in an email that contains wire instructions. That number may connect you to the scammer.
3. Use Secure Communication. Ask your real estate agent and closing attorney how they handle secure communication. Many use encrypted email systems or secure portals for transmitting sensitive information like wire instructions. If you’re not sure whether an email is secure, assume it’s not.
4. Watch for Red Flags. Look out for:
- Emails that urge you to act quickly
- Slightly misspelled names or email addresses
- Poor grammar or awkward phrasing
- Requests to confirm or resend wiring instructions
- If anything seems off, pause and verify.
5. Confirm Details Early in the Process. Get the name and contact information of your title company or attorney early in the transaction. Know what to expect and how they will send instructions. That way, if something changes, you’ll be more likely to notice it.
What to Do If You Think You’ve Been Scammed
If you’ve already wired funds and think you’ve been tricked, call your bank immediately and ask them to recall the wire. You should also contact your title company, real estate agent, and attorney to notify them of the potential fraud. Report the fraud to the FBI at http://www.ic3.gov as quickly as possible. Speed is critical. If you act fast enough, there’s a small chance the funds can be recovered.
Final Thoughts
Wire fraud is real, common, and devastating. But with a few simple steps, including staying alert, verifying everything, and using secure communication, you can protect your money and your peace of mind. If something feels off, trust your instincts. It’s better to double-check and reverify information than to become another victim. If you have any additional questions about wire fraud prevention, contact your trusted real estate attorney.
