Real estate wire fraud involves criminals convincing homebuyers to wire their down payment on a purchase of a home to an offshore account, usually by sending an email that looks like it came from the buyer’s real estate broker. This is a growing crime that has already cost people hundreds of thousands of dollars.
It’s particularly bad because banks typically don’t cover losses for this kind of scam. And, because the money is sent overseas, it’s next-to-impossible for buyers to get their money back. Many have lost the chance to buy their dream home because of this scam.
Common Real Estate Wire Fraud
Real estate wire fraud happens when a transaction has been set up ahead of time to pay a down payment on the date of the home closing. Criminals, posing as the buyer’s real estate agent, email their victims and give them the account where they can wire the money. Except it’s not really their agent, and the money is leaving the country.
It’s a crime that is growing. An email security professional told CNBC that there have been 14 times more such scams in 2018 than the previous year.
How It Works
While cases can vary in the details, this is typically how real estate wire fraud happens.
- Criminals break into the email account of a real estate agent or attorney using malware
- The agent has no way of knowing this has happened
- The criminals can now monitor the email of the real estate professional, looking for information about upcoming home deals
- As a closing date nears, the criminal sends a message to the buyer that says the plan has changed and that the down payment must be wired the day before closing to a bank account that belongs to the seller
- The buyer, responding to what looks like a legitimate request, wires the money
- In some cases, the criminals may call the buyers, assuring them that the request for the wire transfer is real
How to Detect and Prevent Wire Fraud
As can be seen from the above example, it’s possible to detect real estate wire fraud simply by having a good relationship and plenty of communication with your agent. A phone call to the agent’s number would have immediately exposed the email as a fraud. Voice verify any request you get from the agent’s email.
Another important step to avoid real estate wire fraud is to know of its existence. Be aware that you could be targeted by scammers at any time as the closing date on your Tampa house purchase draws near. Be aware of any suspicious emails.
You also can ask banks to add voice verification to some wireless transactions.
Finally, any email that requests financial information, asks you to log onto a website, or asks you to take a financial action should be viewed with suspicion, especially if it involves your home buying plans. Most legitimate companies do not conduct business this way.
Take the time to become familiar with real estate wire fraud. Make sure your real estate agent is ready to walk you through the steps to avoid the risks of such a scam. Keep the lines of communication with them open – you don’t want criminals to keep you from buying your dream home.