Real estate wire fraud

Buying a home is a complicated, stressful process and fraudsters are more than eager to take advantage of unaware buyers. According to the FBI, real estate wire fraud is one of the fastest-growing cybercrimes in the country.

While it’s easy to think you may not fall for this kind of fraud, these schemes are complex and often appear as legitimate conversations with your real estate agent or mortgage lender. Wire fraud scams aren’t always obvious, but there are steps you can take to minimize the risks.


Network Mortgage will never send you wire transfer instructions via email without first notifying you by telephone or other direct communication.

What is real estate wire fraud?

Real estate wire fraud is a type of cybercrime in which criminals attempt to fraudulently intercept and redirect funds involved in real estate transactions.

This type of fraud typically targets homebuyers, sellers, real estate agents, mortgage lenders, title companies, and other parties involved in real estate transactions, such as closing attorneys or escrow agents.

How does real estate wire fraud work?

These scams have a lot of variations, but most involve some or all of the following illegal techniques:

Phishing: Criminals often initiate the fraud by sending convincing-looking emails, posing as legitimate parties involved in the real estate transaction.

These emails may contain fraudulent information or instructions regarding the wiring of funds, such as down payments, closing costs, or other financial transactions.

False information: The fraudulent emails may include altered or fake bank account details, along with wiring instructions for down payments or closing costs.

Correct information: Some financial figures or property details may even be accurate — making it appear as if the email is coming from a trusted source, such as the real estate agent or the title company.

Social engineering: Criminals often use social engineering tactics to create a sense of urgency to pressure the victim into taking immediate action. This could involve claims of last-minute changes or impending deadlines.

Unauthorized fund transfer: If the victim falls for the scam and follows the fraudulent instructions, they may unknowingly wire funds to the criminal’s account instead of the intended recipient, such as the title company or seller.

Once the funds are transferred to the fraudster’s account, they can be difficult to recover, and the victim may suffer financial losses.

What does real estate wire fraud look like?

This is a complicated topic, so an example may help explain how this type of fraud plays out in real life:

Marge and Jerry Sweetwater, a teacher and accountant in their 60s, were ready to downsize in 2017.

They’d lived in their Bakersfield, California home for almost 28 years, and were pleased when they found a smaller townhouse for sale near their daughter and grandkids where they could enjoy their retirement.

The couple signed a contract and prepared for the closing — They wired their $62,700 payment to the account number that their escrow officer had emailed to them.

Two days later, they sat down with their escrow officer and the seller’s representative to close the deal. But when they handed over their proof of wire transfer, the seller’s rep said: “That’s not our account.”

The escrow officer asked Marge and Jerry: “Where’d you get that information?”

Marge replied: “You sent it to us.”

The escrow officer responded: “I didn’t send you that information.”

That’s when they knew there was a scam involved. Jerry and Marge immediately tried to reverse the wire transfer, but it was too late. All of their savings, as well as money they’d borrowed, was gone.

What is phishing?

“Phishing” is the fraudulent practice of sending emails or other messages claiming to be from reputable companies in order to induce individuals to reveal personal information, such as passwords and credit card numbers.

Phishing attacks can take various forms. Some of the more common include:

  • Email phishing: Attackers send seemingly legitimate emails that impersonate trusted entities, like banks, social media platforms, or government agencies. These emails may contain links to fake websites that ask for login credentials or personal information.
  • Spear phishing: This is a targeted form of phishing where attackers tailor their messages to specific individuals or organizations, often using information gathered from social media or other sources to make the emails more convincing.
  • Vishing: In vishing (voice phishing) attacks, fraudsters use phone calls to impersonate legitimate entities and request personal information over the phone.
  • Smishing: This involves phishing through text messages (SMS). Attackers send text messages with links or instructions to respond, often claiming urgent action is required.

Phishing attacks exploit human psychology, often using fear, urgency, or the promise of rewards to manipulate victims into taking action without thinking critically.

As a result, it’s crucial to be vigilant and exercise caution when receiving unsolicited emails, text messages, or other forms of communication, especially when they request sensitive information or immediate action.

How do crooks get your information?

The phishing emails used in these scams often include accurate information, including buyer’s name, loan agent’s name, down payment amount, and property address. How is this information obtained?

Here are some common ways in which scammers can acquire such details:

Data breaches

Criminals may have gained access to databases or records containing personal and transaction-related information through data breaches.

These breaches could occur at financial institutions, real estate agencies, title companies, or other entities involved in real estate transactions.

Email compromises

In some cases, criminals may have already compromised the email accounts of one or more parties involved in a real estate transaction.

This allows them to monitor communications, gather information, and send phishing emails that appear to come from a trusted source. The compromised email accounts can be used to gather specific details about the transaction.

Social engineering

Criminals can engage in social engineering, which involves researching and profiling their targets on social media platforms and other online sources.

By piecing together information from various public sources, they can create convincing and personalized phishing emails. For example, they may find information about the property address, the involved parties, and the transaction details.

Inside information

Individuals with inside knowledge about real estate transactions — such as employees or former employees of real estate agencies, title companies, or financial institutions — may be involved in the fraud or may inadvertently leak information to criminals.


Criminals may use hacking techniques to gain access to the computer systems or networks of organizations involved in real estate transactions. Once inside, they can extract relevant information to use in their phishing attempts.

It’s important to note that while some of the information in these phishing emails may be accurate, it’s often manipulated or supplemented with fraudulent details to deceive the target.

To protect against these types of scams, it’s crucial to implement strong cybersecurity measures, educate all parties involved in real estate transactions about the risks of wire fraud, and be vigilant in verifying all financial information independently before taking any action.

How can you protect yourself?

Consumers can take several steps to protect themselves from falling victim to real estate wire fraud. Here are some important precautions to consider:

Verify all communication: Be cautious when receiving emails, text messages, or other digital communications related to your real estate transaction. Independently verify the authenticity of the sender and the information provided.

Confirm changes: If you receive any requests for changes to wiring instructions, down payment amounts, or other financial details, verify these changes directly with the parties involved using trusted contact information (such as phone numbers from their official website). Do not rely solely on email instructions.

Secure email: Use secure and encrypted email communication when discussing sensitive financial information. Confirm with your real estate agent, title company, or other involved parties that they use secure communication methods.

Educate yourself: Familiarize yourself with the common tactics used in real estate wire fraud and be aware of the risks. Awareness is the first step in prevention.

Strong passwords: Protect your email and other online accounts with strong, unique passwords. Enable two-factor authentication (2FA) wherever possible to add an extra layer of security.

Use caution with email links and attachments: Do not click on links or download attachments from suspicious or unexpected emails. Verify the legitimacy of the sender before taking any action.

Check email addresses: Pay attention to the email addresses of senders. Criminals may use email addresses that are similar to legitimate ones but have slight variations. Double-check email addresses for authenticity.

Beware of urgency: Criminals often create a sense of urgency to pressure you into taking quick action. Take your time to verify any changes or requests, and do not rush into making financial decisions.

Report suspected fraud: If you suspect you’ve received a phishing email or have fallen victim to real estate wire fraud, report it to the appropriate authorities, such as your local law enforcement, the FBI, and your financial institution (see below).

Use trusted sources: When researching or verifying information related to your real estate transaction, rely on trusted sources and official websites or phone numbers. Avoid using contact information provided in emails without verification.

Consult professionals: Seek advice from legal or financial professionals who are experienced in real estate transactions. They can help ensure that you’re following best practices and avoiding potential pitfalls.

What is spoofing?

“Spoofing” is a deception technique where a person or system impersonates another entity in order to gain unauthorized access, carry out fraudulent activities, or manipulate the trust and expectations of the target.

Depending on the goal of the attacker, spoofing can take many forms, including:

  • Email spoofing: Email spoofing involves sending emails with a forged sender address to make it look like the message is coming from a legitimate or trusted source. This can be used for phishing attacks, spreading malware, or other malicious purposes.
  • Caller ID spoofing: In caller ID spoofing, attackers manipulate the information that appears on the recipient’s caller ID display to make it seem as if the call is coming from a different phone number or entity. This is often used for fraudulent telemarketing, impersonating government agencies, or conducting scams.
  • Website spoofing: Attackers can create fake websites that mimic legitimate websites to trick users into providing sensitive information, such as login credentials or financial data. This is often used in combination with phishing attacks.

Spoofing attacks have serious security implications because they undermine the trust that users place in digital services. Users should exercise caution and verify the authenticity of sources, especially when dealing with sensitive information or making important decisions based on digital communications.

How to report real estate wire fraud?

If you suspect that you’re the victim of real estate wire fraud, it’s crucial to report the incident to the appropriate authorities and organizations as soon as possible.

Here’s a list of entities you should consider reporting the fraud to:

Local law enforcement: Contact your local police department to file a report about the fraud. Provide them with all relevant information and evidence you have about the incident.

Federal Bureau of Investigation (FBI): The FBI operates the Internet Crime Complaint Center (IC3), which accepts and investigates internet-related crimes, including real estate wire fraud. You can submit a complaint to IC3 through their website at:

State regulatory agencies: Depending on your location, there may be state agencies responsible for investigating and regulating real estate transactions. Check with your state’s attorney general’s office or real estate commission for guidance on reporting real estate fraud.

Federal Trade Commission (FTC): The FTC accepts reports of various types of fraud, including wire fraud. You can file a complaint with the FTC through their website at:

Your financial institution: Contact your bank or financial institution to report the fraudulent wire transfer and request assistance in potentially recovering the funds. They may be able to initiate an investigation.

Title company or escrow service: Inform the title company or escrow service that you suspect fraud and inquire about their procedures for addressing wire fraud incidents.

Your real estate agent or broker: If you’re working with a real estate agent or broker, inform them of the situation. They may be able to provide guidance and support in addressing the issue.

Legal counsel: Consult with an attorney who specializes in real estate law to understand your legal options and to help you navigate the situation.

Better Business Bureau (BBB): You can report the incident to the BBB, which maintains a database of consumer complaints and can assist in dispute resolution.

Internet service provider (ISP): If the fraud involves email or online communication, you can contact your email service provider or ISP to report the incident and request assistance in tracking the source of the fraudulent messages.

When reporting real estate wire fraud, it’s essential to provide as much information as possible, including the details of the fraudulent communication, the financial transactions involved, and any evidence you may have. Prompt reporting is crucial to increase the chances of recovering funds and to help prevent further fraudulent activities.


By being vigilant, verifying information independently, and following good cybersecurity practices, consumers can reduce the risk of falling victim to real estate wire fraud. It’s important to stay informed and take necessary precautions throughout the real estate transaction process.




portrait kristen wilson
About Kristen Wilson

Kristen Wilson is a licensed loan officer and owner at Network Mortgage in Chico, California. She has been helping clients with mortgage financing for over 25 years.

CA DRE: 01146146 / NMLS: 238825