Buying a home is a big deal. It also happens to be one of the most complex and expensive purchases you’ll ever make, making homebuyers a prime target for fraud. According to the FBI, wire transfer fraud costs victims millions of dollars each year.¹ Let’s talk about how to stay safe while you’re closing on your new home.

What is real estate wire fraud?

In a typical real estate wire fraud scheme, criminals steal your money by convincing you to wire the money straight to their account.

You might think you’d never fall for a scam like this. But the truth is, the scam is very convincing, and unfortunately, scammers often walk away with thousands. Here’s how they do it:

• Convincing email — The scammer sends an email that appears to be from your real estate agent, title company or lender, asking you to wire money to a certain account for your down payment or closing costs.
• Urgency — The email will often have a subject line like “New wiring instructions” or “Important change: don’t delay your closing.” These words are purposely chosen to make you act quickly without contacting your real estate agent, title company or lender directly to verify the information first.
• Fake account information — The wire instructions provided in the email or text message go to a bank account controlled by the scammer, not your agent or lender.

The worst part? Once the money is gone, it’s very difficult — if not impossible — to get it back.

How can homebuyers avoid wire fraud?

Real estate wire fraud can be tough to detect because it often involves someone you trust — a scammer impersonating someone you trust, that is. That’s why it’s so important that homebuyers are aware of this type of scam and know what to look for.

Before wiring money, here’s how to stay safe:

• Verify the recipient’s identity at each step. Confirm the recipient’s identity and account information multiple times — both when you receive the information from your title company or real estate agent and again before you send the wire. Always go directly through official channels to confirm the correct phone number and wire instructions. Don’t rely on contact information sent by email or text message because it could be part of a scam.
• Don’t click on links in unsolicited emails. Be cautious of unsolicited emails that ask for your personal or financial information. Don’t click on any links or download any attachments you aren’t expecting, as they may contain malware.²
• Be suspicious of last-minute changes and pressure to act quickly. If you receive a request for a last-minute change to the wire transfer information or feel pressured to act quickly, don’t send the wire. That’s a major red flag.

Wire fraud in real estate transactions is a serious issue that can have devastating consequences for homebuyers. Stay vigilant and double-check all wire instructions to protect yourself when purchasing a home.

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