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Wire fraud in real estate occurs when criminals intercept legitimate wire transfer instructions and replace them with fraudulent account information. Victims send funds believing they’re following correct procedures, but money goes to scammer-controlled accounts instead. This type of fraud cost real estate transaction participants over $350 million in 2023, according to FBI data. Protection requires verification protocols at every fund transfer.

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How Wire Fraud Occurs

Criminals compromise email accounts of parties involved in real estate transactions. Common entry points include weak passwords, phishing emails, unsecured WiFi networks, and malware. Once inside an email account, scammers monitor communications for weeks or months. They learn transaction details, party names, timing, and fund transfer schedules. When wire transfers are imminent, they send fraudulent instructions. The fraudulent emails appear legitimate. Scammers use compromised accounts (real email addresses they’ve hacked) or create look-alike addresses (changing one letter or adding periods). They copy authentic signatures, reference specific transaction details, and use urgent language to discourage verification. The only difference between legitimate and fraudulent instructions is the bank account number. Funds transfer instantly once sent. Recovery is rare.

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Common Targets

Wire fraud affects all transaction participants:
  • Buyers sending earnest money deposits
  • Buyers transferring down payments and closing costs
  • Sellers receiving sale proceeds
  • Lenders funding loans
  • Investors purchasing properties
  • Title companies disbursing funds
Professional email accounts (agents, attorneys, title companies) are frequent attack vectors. These accounts handle multiple transactions simultaneously, creating numerous opportunities for fraud.

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Scale of the Problem

FBI data shows wire fraud in real estate increased 65% from 2020 to 2023. Average loss per incident: $150,000. Contributing factors:
  • Increased electronic transaction volume
  • Sophisticated phishing techniques
  • International scammer operations with limited prosecution
  • Low awareness among transaction participants
  • Tight deadlines creating verification pressure
The threat continues to grow as real estate transactions become more digital.

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The Attack Process

1

Email Compromise

Criminals gain access through phishing, weak passwords, or malware. They monitor silently, learning transaction patterns and terminology.
2

Timing Selection

Scammers wait for high-value transfers with tight deadlines: earnest money (due within 3 days), down payments (days before closing), or final fund wires.
3

Instruction Delivery

Fraudulent wire instructions are sent at critical moments. Emails reference correct property addresses, party names, and closing dates to appear credible.
4

Fund Transfer

Victims wire money to fraudulent accounts. Transfer completes instantly.
5

Discovery

Fraud is discovered when expected funds don’t arrive. By then, scammers have moved money through multiple accounts. Recovery attempts rarely succeed.

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Warning Signs

Indicators of fraudulent wire instructions:
  • Wire instructions arrive via email without prior phone discussion
  • Email address contains subtle changes from previous communications
  • Urgent language demanding immediate action
  • Last-minute changes to previously provided instructions
  • Request to confirm receipt via email only
  • Bank location doesn’t match title company location
  • Generic greetings instead of personalized communication
  • Grammatical errors or unusual phrasing

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Protection Methods

Prevention requires verification protocols that don’t rely on email alone.

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Phone Verification

Before initiating any wire transfer:
  1. Look up the title company’s phone number independently (from their website, contract documents, or business card)
  2. Call and speak with a person previously involved in the transaction
  3. Verify all wire details: account number, routing number, bank name, amount
  4. Confirm verbally before sending funds
  5. Call again after transfer to confirm receipt
Phone numbers provided in emails should not be used. Scammers include fraudulent contact information in their messages.

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Secure Portals

Many title companies provide encrypted portals for sharing wire instructions. These systems require authentication and log all access. Benefits include encrypted transmission, access tracking, version control, and multi-factor authentication. Phone verification remains necessary even when secure portals are used.

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Immediate Confirmation

After sending a wire, call the title company within 30 minutes to confirm receipt. If funds didn’t arrive at the expected account, contact the sending bank immediately to attempt recall. Speed matters in fraud situations. The first 24 hours offer the best recovery opportunity.

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Response to Suspected Fraud

  • Do not wire any funds
  • Call the title company using an independently verified phone number
  • Report the fraudulent email to the legitimate title company
  • Forward the email to FBI Internet Crime Complaint Center (IC3.gov)
Contact bank immediately: Request wire recall. Banks may freeze funds before withdrawal if contacted quickly.File police report: Local law enforcement report is required for insurance claims and FBI investigation.Report to FBI: File complaint at IC3.gov with all email communications, wire details, timeline, and party names.Notify title company: Inform them immediately. They may have insurance coverage or additional procedures.Contact insurance: Check homeowners insurance policy for coverage. File claims promptly.Most wire fraud victims do not recover funds. Prevention is the only reliable protection.

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Wire Fraud Insurance

Title companies should carry dedicated wire fraud insurance (also called cyber insurance or funds transfer fraud coverage). Coverage includes:
  • Losses from fraudulent wire instructions
  • Losses from compromised email accounts
  • Fraud investigation expenses
  • Legal costs if disputes arise
Coverage limits typically range from $100,000 to several million dollars per incident. Questions for title companies:
  • Do you carry wire fraud insurance?
  • What’s the coverage amount?
  • Have you had wire fraud incidents and how were they resolved?
Companies without this insurance pass all fraud risk to clients.

Compare Title & Escrow Companies

Research companies with wire fraud insurance, encrypted portals, and verified security protocols. Protection starts with secure partners.