Greg's Corner

Real Estate Wire Fraud on the Rise

By Greg Collier

A new scam is making its way through the housing market, taking advantage of buyers at their most vulnerable moment: the closing process. At a time when large sums of money are being transferred under tight deadlines, criminals are finding ways to insert themselves into the transaction and divert funds.

The scheme often begins with compromised communications. Fraudsters gain access to emails between buyers, lenders, and title companies by using stolen credentials or other cyber intrusion methods. With access to real conversations and timelines, scammers can convincingly pose as legitimate contacts. Once they know the lender, the amount owed, and the expected timing, they send instructions that appear authentic, tricking buyers into wiring funds to fraudulent accounts.

What makes this particularly concerning is how widespread it has become. Losses tied to real estate wire fraud have multiplied dramatically over the last decade, reflecting both the growing sophistication of cybercriminals and the continued reliance on electronic communications in the homebuying process. Current estimates suggest that as many as one in four homebuyers entering closing are being targeted.

Public records and property listings make it easy for scammers to identify potential victims. Artificial intelligence has only accelerated the problem, giving criminals tools to refine their impersonations and increase the likelihood of success. The complexity of buying a home, coupled with emotional pressure and looming deadlines, creates an environment where buyers may act quickly without questioning sudden changes.

For those who fall victim, recovery is rarely straightforward. Once funds are wired to fraudulent accounts, they are often transferred multiple times or sent overseas, making it nearly impossible for banks to reverse the transaction. Victims can spend months pursuing reimbursement through their financial institutions or law enforcement, but many never recover the full amount. Beyond the immediate financial blow, this can derail home purchases entirely and leave buyers facing both financial and emotional hardship.

The most common point of attack is the transfer of closing funds. Buyers should treat any unexpected communication about wiring instructions with extreme caution. Even subtle alterations, such as a new account number or a last-minute change in procedure, can be an indication of fraud. Beyond the financial risk, victims often face delays in securing their homes and lengthy battles to recover lost funds.

Protecting against this type of fraud requires heightened vigilance. Questioning unusual requests, verifying account details through trusted channels, and contacting real estate professionals directly before making any transfer can help reduce the risk. By slowing down the process and confirming instructions in person or by phone, buyers can create an extra layer of defense against a crime that continues to evolve with technology.