Purchasing or selling a home is a momentous occasion, but unfortunately, it also makes you susceptible to a specific type of fraud: wire fraud.
Wire fraud, in the context of real estate, occurs when cybercriminals impersonate trusted individuals involved in the transaction, such as your real estate agent, lawyer, or title company, and trick you into sending money to fraudulent accounts. Shockingly, according to the National Association of Realtors (NAR), approximately 1 in 20 Americans who bought or sold a home within the past three years were targeted by some type of real estate fraud.
Here’s a deeper dive into the alarming statistics:
- Targeted Transactions: While 1 in 20 transactions are targeted, the success rate of these scams varies depending on individual vigilance and awareness.
- Success Rate: While the exact percentage is difficult to determine due to underreporting, estimates suggest that between 1-5% of targeted transactions may be successful, resulting in stolen funds.
- Median Loss: The median amount lost due to successful wire fraud in real estate is over $70,000, according to the CertifID 2024 State of Wire Fraud report. This significant financial loss can have devastating consequences for unsuspecting victims.
How can you protect yourself?
- Be wary of unsolicited emails or calls: Never wire money based on instructions received through email or phone calls, even if they appear to be from someone you trust.
- Verify contact information independently: Always confirm contact information and wiring instructions directly with the relevant party, not through information provided in emails or calls.
- Use secure communication methods: Never share personal information or financial details over email or unencrypted channels.
- Work with trusted professionals: Choose reputable and licensed real estate agents, lawyers, and title companies experienced in protecting against fraud.
- Be extra cautious during closing: The period leading up to closing is a prime target for scammers. Be extra vigilant and verify all information and instructions before sending any funds.
By staying informed and being vigilant, you can significantly reduce the risk of falling victim to wire fraud during your real estate transaction. Remember, if something feels suspicious, stop, communicate with a trusted professional, and verify information before taking any action.
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