What is wire fraud in real estate, and is it a big deal?

There are countless scams out there designed to steal your money, and one major example is wire fraud in real estate. It happens when scammers learn that a real estate transaction is in progress and send fake emails that look legitimate — often posing as the buyer’s agent, escrow officer, or lender.

These fake emails typically tell the buyer that it’s time to send closing funds to escrow, and they include wiring instructions that, if followed, send the buyer’s money straight into the scammer’s account. And yes — it’s a very big deal. Once the money is sent, it may be impossible to recover, and the amounts involved can be hundreds of thousands of dollars or more.

A lender I work with actually had this happen to his clients. The buyers received what looked like legitimate emails from their escrow officer — plus fake follow-ups that appeared to be from their lender and agent — all instructing them to wire their funds. The buyers followed those instructions and transferred hundreds of thousands of dollars to a scammer. Horrible!

This scam was even attempted with buyers I was working with recently. Fortunately, I had warned them about this type of scam, and they didn’t fall for it. When they received the suspicious email, they reached out directly to escrow — using contact information they already had, not the info in the email — and confirmed it was a scam. They avoided the trap entirely.

The takeaway: Always be suspicious of any email (or phone call, etc.) that asks you to send money, enter a credit card number, or share personal information. Be especially wary if the request is urgent or threatening. (“Your account is going to be canceled!” “You’ll be out of contract on your purchase!” “Your utilities will be shut off!”)

If you’re wiring money for a real estate or other large purchase, always verify the instructions by phone — using a trusted number, not one from an email. And don’t hesitate to ask your agent or escrow officer if anything feels off. Stay vigilant, and be aware that these scams are out there — and you can foil them, too.