Greg's Corner

Don’t wire the down payment for your house

By Greg Collier

When it comes to real estate, one of the most common scams is the rental scam. If you’re a longtime reader you’re probably very familiar with this scam. In the rental scam, the scammer poses as a landlord to a property that they don’t actually own. They’ll advertise the property as being for rent on unmoderated marketplaces like Craigslist. The scammers will then collect money from victims with the payments being disguised as security deposits or first month’s rent. Family’s have moved into these properties only to find out that the property wasn’t even for rent. But what if you’re looking to buy a house? Surely, there are no such scams that could affect home buyers. While not as common as the rental scam, there is at least one scam new home buyers need to look out for.

A couple who were in the process of buying a new home in Kansas City recently found out about such a scam. In the deluge of emails they were getting from various parties involved in the sale of the home, they received an email that instructed them that their $40,000 down payment would need to be sent by wire transfer. The email wasn’t sent by anyone involved in the process but from a scammer who disguised the emails to look like it was coming from the bank and the title company. Later they received a legitimate email from the title company saying they need to bring a cashier’s check, but by that time the couple had already wired the money to the scammer.

It’s unknown how the scammers knew the couple was in the process of buying a home. This could have been a phishing attack that just got extremely lucky, or the scammers could have gleaned some information about the couple from social media. In any case, if you’re in the process of buying a new home and someone asks you to wire any money, verify it first with the parties involved and do so by phone call or in person. Wire transfers have long been a preferred method of payment by scammers.