Greg's Corner

Closing costs stolen in real estate scam

By Greg Collier

This scam doesn’t sound like it should be possible. It seems more like something you would see as a plot point in a movie. That doesn’t change the fact this scam happens rather regularly. While it is a type of phishing scam, this scam doesn’t even have a name for it, as far as we know. We’ve been calling it the closing cost scam, since it targets home buyers who are getting ready to close on their new homes. If it wasn’t for the fact that victims have lost upwards of $100,000, this scam could be considered genius. How it happened recently is especially uncanny.

A man from Louisville, Kentucky, was getting ready to close on his new home, when he received an email that appeared to come from his closing attorney. The email instructed the man to wire $70,000 in order to prevent any delay with the closing procedure. After wiring the money, the man called his realtor, who informed him that the closing attorney did not send the email. The man tried to get the bank to stop the transfer of funds, but it had already happened, meaning the $70,000 was gone.

Scammers were able to fool the victim because the email looked almost identical to the ones he had been receiving from his attorney, including the logo and signature. However, there was one minor detail the victim overlooked. The law office had the word Louisville in their name and in their email address. The scammers spelled Louisville in their email address with only one L, spelling it Louisvile.

Somehow, scammers are getting into the email systems of realtors, lenders, and attorneys, and are monitoring the activity until someone goes to close before setting their trap. The scammers have also been known to stalk social media profiles of people who share with their friends that they’re getting ready to buy a house.

If you’re getting ready to close on a home, be suspicious of any communication asking you to send money. If you receive an email like the one in the story above, call the sender to verify whether the request is legitimate or not. It would be even better to visit the sender in person to verify any requests. No one wants to go through the process of buying a new home only to have the deal fall through at the very last minute due to a scammer.