Home buyers beware! According to an article on realtor.com, people who are involved in the process of buying a home need to be on the lookout for a real estate transaction scam that can leave their bank account drained or even worse.
In these scenarios, scammers pose as agents, lenders, or escrow officers and send emails that direct the buyer to transfer (divert) funds to an account that the scammer has set up to collect funds, thus bypassing or intercepting the original intended lawful recipient. These phony emails look like the real deal (e.g., one letter off from the legitimate bank, mortgage company, or title company email address) and link the home buyer with details on where to transfer needed funds in order to make a deposit or close on their new home. Of course, the link takes them to a different bank.
The scammers may also hack into emails and monitor activity of others involved in the transaction. If they have hacked in, they can send out emails from the hacked account. This makes the home buyer target (victim) believe that the email is from someone they are working with, because it technically is.
Unfortunately, the buyer who falls victim to these scams and wire fraud is not only out thousands of dollars, they can say goodbye to the new home as well. Sellers are affected too, because they lose out on the sale and have to find a new buyer.
According to the National Association of Realtors®, real estate fraud is one of the most prevalent cyber-crimes in the U.S. Real estate transaction scams like the one described above are nothing new, however with advances in AI technology, it’s getting easier for scammers to carry out their mission to part you from your money.
How to Protect Yourself From This Real Estate Scam
- Never wire funds based on email instructions alone. Always confirm wire transfer details by calling the person you’re working with using a trusted, direct number.
- Be skeptical of sudden last-minute changes to payment instructions or email addresses.
- Use secure payment methods through trusted institutions, and avoid wire transfers if possible.
