Real Estate Scam

Scam Definitions & Prevention Guide

We continue our monthly scam prevention series with our Fifth topic - Real Estate Scams.

To keep you safe from falling prey to popular real estate scams, this guide will assist you in recognizing popular scams by sharing telltale signs. We also outline steps that you can take if you ever fall victim to a scam.

According to the Consumer Financial Protection Bureau, during the closing process scammers send spoofed emails to homebuyers, posing as the real estate agent, settlement agent, legal representative, or another trusted individual with false instructions for wiring closing funds.

How bad actors carry out real estate scam 

Scammers engaging in closing transaction scams may employ the following strategies: 

• Compromise the email address of the title/escrow company that sends the wire instructions
• Provide phony contact information on correspondence
• Fraudulently establish accounts in the name of a title/escrow agent or law firm
• Use phishing to install malware onto a victim’s device 
• Intercept email correspondence from the actual title/escrow company

Caution

Email, phone applications, and SIM cards can be compromised by scammers. Always verify wire instructions verbally when they are received by electronic means.

Scammers use phony contact information on fraudulent emails containing the phony wire instructions. 

How To Protect Yourself

●Verify the closing instructions in person, if possible, or by calling the title/escrow company at a number known to you.

●Verbally verify payment instructions and any change to an account number with the person making the request.

Questions to ask yourself

●Have I wired to this specific account before? Did the title/escrow company acknowledge receipt of the wire?

●How did I receive the wire instructions (text, email, verbally, or in person)?

●Did I use a phone number from the title/escrow company’s website?

●Did I see the property in person with a registered real estate agent/broker?

Remember: If you are ever suspicious of any situation like those discussed here, please call us. We are eager to help you,  especially when it comes to your security. Immediately contact our firm or call Schwab Alliance at 800-515-2157

Learn more about scams from these trusted external resources:

• SchwabSafe/Protect yourself from financial fraud
• www.fbi.gov/scams-and-safety
• consumer.ftc.gov/features/scam-alerts