There is nothing more tragic than hearing about a real estate transaction that cancels because a thief stole money. The buyer does not get the home they wanted and potentially will not be able to buy again unless the money is recovered. The seller must start over by looking for a new buyer. Often there are several transactions lined up like dominoes. If one falls out then several other buyers and sellers will be disappointed. Wire fraud is particularly common in real estate transactions because sensitive data, including social security numbers, bank account numbers, and wire instructions are often sent by electronic means. In any given real estate transaction, there are many people involved, i.e. the buyer, seller, realtors, title companies, lenders, and transaction coordinators. All are using email.
How does this happen? Criminals find out about the transaction on social media or by hacking into someone’s email. Then the buyer receives a fraudulent email that looks like it is coming from the title company with wiring instructions. The thieves are getting more and more sophisticated. Here is a real-life example from one of my lenders, Chris Rosner. His client was buying a new home and received an email from the title company that looked legitimate at first glance. Typically, you can spot a fraudulent email because the information will be wrong, the grammar used is not correct or things are misspelled. In this case, the email was perfect, and everything appeared correct. Luckily the buyer had an eye for detail and noticed there was one letter wrong in the email address. For example, instead of [email protected] it was cathysmits.
Typically the buyer is the victim. However, in one of my closings the title company received wiring instructions from the seller. Money wired to a fraudulent account is stolen money that typically cannot be recovered. There is generally no insurance for this loss. You may never get the money back.
How do you protect yourself from wire fraud?
1) Do not close on Friday. Most people want to close on Friday and move over the weekend. Wire fraud thieves know this. Close on Thursday instead.
2) Do not post on social media that you are buying or selling a house with the information available to anyone. This is how the thieves find you.
In each of the cases below call your title company to confirm before wiring money.
3) Do not trust emails containing wiring instructions.
4) Do not trust emails asking for personal or financial information or asking you to click or download anything unusual.
5) Trust your source of information. If someone you do not know calls you to give you wire instructions, verify the information before wiring the money.
6) Do not trust wire instructions sent to you by your realtor.
I do not want you to be the next victim of wire fraud.