Real Estate Fraud #1

May 17, 2023

, ,

Real estate has it’s fair share of scams and fraudulent activity.  I take great care in educating my clients so that they are aware of potential scams and how to protect themselves.  These criminals can be very sneaky and sophisticated, so the more you know, the better prepared you can be.

I have clients who are purchasing a very expensive home and they are putting down a HUGE down payment. As soon as we were under contract, I had several conversations and email exchanges with them about how to wire their funds to the title company safely.

A few days before settlement, my client received an email that provided *new* wiring instructions. Because I had warned them about this exact email scam, they knew that this was fraudulent, even though the email looked very legitimate.  Suffice to say, they did not wire their funds to this criminal and they also alerted the title company and the FTC about this scam.

Here is how you can avoid wire fraud scams: 

Rule Number 1: A title company will never change their wiring instructions via email.  Most title companies use a secure portal where they will share documentation with you during your transaction. If they provide a wire instructions document in the portal, use this document when you initiate Rule Number 2 below.

Rule Number 2: About a week before you closing date, call the title company and ask on the phone to get the wire instructions. If they provided a document in the secure portal, make sure the information matches.

Rule Number 3: Two days before closing, call the title company again and verify the wire instructions to make sure they have not changed.  It’s an extra step, but worth the effort for sure!

Rule Number 4: If you are not comfortable with wiring the funds, ask if the title company will accept a cashier’s check.  You will then go to your bank and have them issue a check made out to the title company. You are just responsible for bringing it to closing with you.

Along the way, you will get several reminders about wire fraud and you may even have to sign a Wire Fraud disclaimer from your agent and the title company. If at anytime you feel like something is off, say something.  Your lender, title company representative and your agent are here to help. It is better to be safe than sorry!