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Safeguarding Against Wire Fraud in Real Estate Transactions

Real estate transactions are a top target for cyber fraud. In fact, in a survey of 650 real estate clients, one in four received suspicious or fraudulent communications during their closing process. One in 20 ended up being victims of cyber fraud.  

As a real estate agent, it’s up to you to ensure each transaction goes smoothly. Part of that responsibility includes protecting your client’s personal and financial information and ensuring your client has a secure portal to transfer funds. 

Here’s what you need to know about wire fraud in real estate, including fraud warning signs, and what to do if one of your clients becomes a victim of cyber fraud.  

Understanding Wire Fraud in Real Estate Transactions 

Wire fraud in real estate transactions typically occurs when cybercriminals trick buyers, sellers, or other parties involved in a real estate transaction into wiring money to a fraudulent account. This can happen at any stage of a transaction, but it most commonly occurs during the closing process. 

Because of the amount of money typically involved in a real estate transaction, fraudulent cyber transactions can have devastating consequences for victims. Buyers may lose their down payment, or sellers may lose the proceeds from selling their property. 

Wire fraud is prevalent. According to a 2022 survey by the American Land Title Association, 46% of survey respondents said their employees receive at least one email a month attempting to change wire or payoff instructions. 

Cybercriminals are becoming increasingly savvy. Don’t assume that you or your clients will be easily able to spot fraudulent communications.   

How Wire Fraud Occurs in Real Estate 

Some of the information regarding real estate transactions is openly available to cybercriminals. This allows them to send timely emails or texts to an involved party, which may be the buyer or seller – but could also extend to the real estate agent, attorney, or title agent.  

Simply opening the email or text may cause malware to download on the recipient’s device. This malware may give hackers access to email accounts, which they monitor for communication regarding closing instructions. They may intercept those emails and send buyers instructions on transferring money — to a criminal’s overseas account that is difficult to trace. 

Who is Responsible When Wire Fraud Occurs? 

Unfortunately, there’s no clear answer on who is responsible when wire fraud occurs.  

Sometimes, the consumer is liable because they willingly authorized a transaction – even if under false pretenses. Real estate agents, brokers, and escrow companies have also been found liable if a court finds them negligent.  

Warning Signs of Wire Fraud 

Unfortunately, wire fraud is often only discovered at the closing appointment.  All parties involved in a real estate transaction must know these signs of wire fraud. 

1. Unexpected changes in payment instructions 

Be cautious if you receive an email or phone call instructing you to change the payment process. 

2. Urgent or last-minute requests 

Cybercriminals often use a sense of urgency to rush someone into completing a transaction. You may receive an email or phone call that says the transaction will be affected unless funds are received immediately.  

3. Emails from unfamiliar addresses 

Check the sender’s email address carefully. The cybercriminal may attempt to mimic the professional’s email address but may use slight variations.  

4. Emails or texts with poor grammar and spelling 

Some fraudulent emails have poor grammar or spelling.  

5. Communication that has errors or inconsistent details. 

Besides looking for grammar and spelling errors, read each communication carefully to ensure all the information is accurate. Incorrect names, addresses, and amounts are signs of fraud. 

6. Communication that requests confidential information 

Be extremely vigilant about providing bank account details or personal information via email.  

Steps to Prevent Wire Fraud 

Awareness is the first step of prevention. Here’s how buyers, sellers, and real estate professionals can protect themselves from wire fraud.  

  • Be suspicious of every email, phone call, or text regarding your transaction. 
  • Do not click on unverified links in a text or email.  
  • Contact the escrow company directly by phone or email to verify transaction instructions. 
  • Beware of urgent requests for money or information. 
  • Verify wire transfer instructions, including the recipient’s name and account number. 
  • Verify phone numbers, emails, or websites that are sent to you, as they may be fraudulent. 
  • Keep your operating system and security software up to date on your devices. 
  • Work with a cybersecurity professional to ensure you have a secure payment and communication system for your clients if you work in the real estate industry. 

What to Do If You Suspect Wire Fraud 

Contact your bank immediately if you believe you or a client has been a victim of wire fraud. Ask the bank to stop the wire transfer and file a report with the FBI’s Internet Crime Complaint Center. 

Buying and selling a property can be a joyous event in a person’s life. Be vigilant. Don’t let a cybercrime ruin what should be an exciting transaction.  

It’s important to be aware of warning signs of cyber fraud, which may include unexpected changes in payment instructions, urgent requests for personal information or payments, or communication with spelling or grammar errors. 

Stay current in real estate news and issues by taking real estate continuing education courses with McKissock Learning. Our CE classes cover current industry issues and will help you renew your real estate license while learning how to better serve your clients.  

Key Takeaways 

  • Real estate transactions are prime targets for cyber fraud, with one in four consumers receiving suspicious or fraudulent communications during their closing process and one in 20 becoming victims of cyber fraud. 
  • Wire fraud typically occurs when cybercriminals deceive parties involved in a real estate transaction into wiring money to a fraudulent account. 
  • Liability for wire fraud is not always clear-cut, with consumers, real estate agents, brokers, and escrow companies potentially held responsible if negligence is proven. 


1.     ​Ianzito, Christina. “Some Home Buyers Are Losing Everything to Wire Fraud.” AARP. Accessed June 3, 2024. https://www.aarp.org/money/scams-fraud/info-2023/real-estate-wire-fraud.html.  

2.     Sinha, Tannistha. “How Title Companies Are Combating Wire Fraud.” HousingWire, January 4, 2023. https://www.housingwire.com/articles/how-title-companies-are-combating-wire-fraud/. 

3.     “State of Wire Fraud.” State of Wire Fraud. Accessed June 3, 2024. https://www.certifid.com/state-of-wire-fraud.