Wiring funds in a real estate transaction are not uncommon, but unfortunately, fraud is not uncommon as well. I recently spoke with a local Maricopa attorney and was made aware of some pretty frequent wire fraud happening across the nation.
For instance, in a recent transaction, the buyer was planning on wiring funds for closing. The buyer received an email that looks like it came from their agent explaining the wire instructions. The buyer wired the funds as instructed but it was to a fraudulent account. The buyer later received an email that appeared to come from the title company confirming the receipt of the funds. However, the actual title company did not receive any funds and this occurred just a couple of days prior to closing.
Wire fraud is nothing new but it has increased 1300% since 2015. This scheme, involving an attempt to steal money sent by buyers on real estate transactions is happening across the country. Unfortunately, many email addresses can be found on social media, and with just a little bit of digging, scammers can find out a lot about your information and even if you’re buying a house.
Hackers can target buyers by sending fraudulent emails that appear to come from either the buyer’s real estate agent, lender, or title company. If the buyer complies, those funds can go directly into the scammer’s account.
So what can you do? You want to confirm all wiring instructions verbally with your escrow or title officer and confirm with your real estate agent as well before initiating any wire transfer. Do not use a phone number from an email signature line to initiate the call is this can only add more fuel to the fire for the scammer. Be suspicious of any wire funds that request an unusual amount, partial amount, or funds directly before closing. Most title companies will not require an advance deposit. Consider using a cashier’s check instead of the wire. You want to contact your escrow or title officer five days prior to closing for these types of instructions.
Scammers and hackers are everywhere and nobody is immune to this. It’s important to keep your guard up and ask questions to those you trust including your escrow or title company and your buyer’s agent.