Real estate wire fraud happens when a hacker accesses someone’s email during a real estate sale and changes the wiring instructions. The buyer follows those instructions and sends their down payment (sometimes hundreds of thousands of dollars) to an account controlled by the hacker instead of the one they intended. By the time anyone notices, the money is usually gone.
If this has happened to you, the attorneys at Griffin Durham Tanner & Clarkson can help you understand your options for recovering the funds and figure out whether someone else’s negligence contributed to your loss.
Why are real estate transactions common targets for wire fraud?
Real estate deals make attractive targets because they tick every box a scammer looks for: a lot of money changing hands, a tight closing deadline, and several people emailing sensitive financial details back and forth. On top of that, it’s easy to find out who’s involved. The names and contact details of agents, title companies, closing attorneys, and lenders are often just a quick search away.
Criminals exploit the urgency inherent in the closing process. When buyers are anxious about losing the property, they’re more likely to act quickly and less likely to question last-minute changes. The high-stakes atmosphere, combined with the routine exchange of financial information over email, creates exactly the conditions that wire transfer scams depend on.
How does business email compromise lead to wire transfer fraud?
Business email compromise is one of the most common ways real estate wire fraud happens. When a hacker gets into the email account of someone involved in the deal, they can sit quietly and watch the transaction unfold. They learn who the parties are and how much money is moving.
Buyers routinely send personal financial information to lenders for loan approval and to their agents to complete the sale. Lenders and brokers send buyers wiring instructions directing them where to transfer closing funds. If a hacker has access to any of those email accounts, they have what they need to intercept those instructions and replace them with their own.
How do scammers manipulate wiring instructions during a closing?
The most straightforward method is email spoofing or phishing. Scammers create messages that closely mimic those from closing attorneys or escrow agents, like copying logos, signatures, and transaction-specific details, and use them to solicit sensitive information or redirect funds.
A common variation involves last-minute changes to wiring instructions sent just before closing. The message typically claims an unforeseen complication has arisen, or that the original bank account was compromised and funds must be sent to a new account immediately. The manufactured urgency is intentional, and it’s designed to discourage the recipient from pausing to verify.
Some scammers reinforce the deception by including a phone number in the fraudulent email for the buyer to call and confirm the change. That number connects to the scammer, who poses as a bank representative or closing agent to complete this type of fraud.
What warning signs can point to a real estate wire scam?
If you get any unexpected change to wiring instructions, account numbers, or routing numbers, stop and verify it before doing anything. Call the person using a phone number you already have, not one from the new message. Other warning signs include a sudden sense of urgency, pressure to act before you can check with anyone else, and an email address that’s slightly off from the ones you’ve seen all along, like a “.net” address when everything before came from a “.com.”
Be equally skeptical of bank details that don’t match those of the title company or lender you’ve been working with, and of any instruction to communicate or transfer funds exclusively by email without a follow-up call to confirm.
How can buyers and sellers reduce the risk of fraud?
Obtain contact information for every party in the transaction, including direct phone numbers, through a source you’ve independently confirmed, ideally in person. Before wiring any funds, call the intended recipient using the number you already have on file, not any number that appears in a recent email.
If you receive updated wiring instructions at any point in the process, treat them as suspicious by default and confirm directly with your broker or closing attorney before acting. Direct verification is an effective way to prevent real estate wire fraud.
What should you do if you’ve sent money to a fraudulent account?
Act immediately, because speed is the single biggest factor in whether any of the money can be recovered. Contact your bank right away and request a wire recall, providing as much detail as possible about the transfer: the account number, routing number, amount, and timestamp. If the funds have not yet been withdrawn or transferred onward, a prompt notification may improve the chances of freezing or recovering some or all of the money.
File a complaint with the FBI’s Internet Crime Complaint Center (IC3) as soon as possible, and preserve every communication connected to the transaction. The FBI’s Recovery Asset Team may be able to assist financial institutions in attempting to freeze fraudulent transfers when reports are made quickly. Wire transfers are difficult to reverse, and recovery often depends on how quickly the banks and investigators can act.
Can you recover money lost to real estate wire fraud?
Recovering funds directly from the scammers is often impossible because many of these schemes are run by organized rings operating overseas. But that isn’t the only path to recovery. In some cases, a third party’s inadequate cybersecurity measures, failure to follow verification procedures, or other negligent conduct may have contributed to the loss
When a professional’s negligence contributes to your loss, you may be able to hold that party financially responsible through a civil claim, depending on the specific facts and applicable law. Determining who is liable requires a careful look at how the fraud happened, whose account was breached, and what safeguards should have been in place. That’s a question an experienced attorney can help you answer.
Speak with an attorney about recovering your wire fraud loss
If you’ve lost money to a real estate wire fraud scheme, Griffin Durham Tanner & Clarkson LLC can review what happened and guide you through the steps. To speak with our team, contact us online or call our Atlanta office at (404) 891-9150, or reach our Savannah office at (912) 867-9140.
