Buying or selling a home involves exchanging personal information, financial documents, and, in many cases, a significant amount of money. Unfortunately, that makes real estate transactions an attractive target for wire fraud.
Criminals may attempt to gain access to email accounts, monitor conversations related to a transaction, and then send convincing messages that appear to come from a title company, lender, REALTOR®, or another trusted party. Their goal is often simple: redirect closing funds into a fraudulent account.
Because these messages can look legitimate, everyone involved in a real estate transaction should know the warning signs and take a few important precautions before money is sent.
How Real Estate Wire Fraud Happens
Wire fraud often begins well before a suspicious email arrives.
A fraudster may gain access to an email account or gather enough information about a transaction to impersonate someone involved. As closing approaches, the criminal may send an email containing fraudulent wiring instructions or claim that previously provided instructions have changed.
The message may include familiar names, property information, email signatures, or other details that make the request appear authentic.
That is why recognizing a fraudulent email based on appearance alone can be difficult.
Be Cautious of Changes to Wiring Instructions
One of the biggest warning signs is an unexpected message claiming that wiring instructions have changed.
If you receive new or revised wiring instructions by email, do not send funds based solely on that message. Stop and independently verify the information.
Call your title company using a phone number you already know and trust. Do not use a phone number included in the suspicious email, since fraudulent messages may contain false contact information as well.
A few extra minutes of verification can help prevent a devastating financial loss.
Verify Before You Send Money
Before initiating a wire transfer, confirm the wiring instructions directly with the appropriate party using a trusted method of communication.
When verifying instructions, confirm important details such as the receiving institution and account information.
If anything is different from what you were previously given, do not assume the change is legitimate. Ask questions and verify before proceeding.
It is also important to be cautious about responding directly to an email thread if something seems unusual. An email account involved in the conversation could potentially have been compromised.
Watch for Common Warning Signs
Fraudulent messages often attempt to create urgency. Be especially cautious if an email:
Announces an unexpected change in wiring instructions
Pressures you to send money immediately
Provides unfamiliar contact information
Comes from an email address that is slightly different from one you recognize
Contains unusual wording, formatting, or requests
Asks you to keep a payment or change confidential
Directs you to a different bank or account than expected
Even if a message looks completely legitimate, verifying financial instructions before sending funds is a smart habit.
Protect Your Email Account Too
Good email security can add another layer of protection during a real estate transaction.
Use a strong, unique password for your email account and enable multifactor authentication when available. Avoid accessing sensitive transaction information through unsecured public WiFi, and be cautious about clicking unfamiliar links or opening unexpected attachments.
Buyers and sellers should also avoid sharing sensitive financial information unnecessarily through email.
What Should You Do If Something Seems Wrong?
If you receive a suspicious message, stop before taking action. Contact your title company, lender, REALTOR®, or other appropriate transaction professional using contact information you independently know to be correct.
If money has already been sent and you suspect fraud, contact your financial institution immediately. Time can be critical when attempting to stop or recover a fraudulent transfer. You should also notify the appropriate parties involved in the transaction so they can take steps to secure accounts and communications.
A Simple Rule to Remember
Real estate transactions move quickly, particularly as closing day approaches. That urgency should never prevent you from verifying where your money is going.
Before sending closing funds, remember one simple rule:
Stop. Call. Verify.
At Integrity Land Title, protecting the closing process includes helping our clients stay informed about potential risks. When it comes to wiring funds, never hesitate to verify instructions with our team using a trusted phone number before sending money.
Taking a few minutes to confirm the details is always worth it.