Avoiding Wire Fraud in Real Estate: How to Keep Your Escrow Funds Safe

Buying or selling a home is an exciting process, but it also comes with risks—especially when it comes to transferring money. Real estate transactions involve large sums, making them a common target for scammers. Wire fraud and escrow scams are on the rise, with criminals using fake emails, phone calls, and even hacked accounts to trick people into sending money to the wrong place. Once the money is gone, it’s nearly impossible to get it back. Protecting your escrow funds and staying alert during the process can help you avoid becoming a victim.

How Real Estate Wire Fraud Happens

Wire fraud in real estate usually starts with email hacking. Scammers break into the email accounts of real estate agents, title companies, or lenders to monitor conversations. Once they find an upcoming transaction, they send fake instructions to the buyer or seller, telling them where to wire their money. These emails look real because they often use the same logos, formatting, and language as legitimate companies.

Sometimes, scammers don’t hack accounts but create fake ones that look almost identical to real ones. A simple change, like one extra letter in an email address, can go unnoticed. Other times, they call pretending to be an escrow officer or agent, pressuring you to send money immediately.

If you don’t double-check before sending a wire transfer, you could be sending your money straight to a criminal’s account. Once the money is transferred, the scammer quickly moves it to another account, making it nearly impossible to recover. This is why it's so important to be cautious and verify every financial transaction.

How to Protect Your Escrow Funds

The best way to avoid fraud is to confirm every financial request with a trusted source before sending any money. Never rely only on an email or text message to make a wire transfer. Always call a known, verified number to double-check wiring instructions. If anything feels off—like a sudden change in instructions or a sense of urgency—it could be a scam. A legitimate title company or escrow officer will never pressure you to send money immediately.

Before wiring funds, visit the office of your title company or escrow agent in person, if possible. Ask for the wiring instructions directly and write them down. When you’re ready to send the money, call the company using a phone number you know is real—not one from an email—to verify the details again. It may seem like an extra step, but it can save you from losing thousands of dollars.

Using secure communication is another important step. Avoid sending sensitive financial details through regular email. If your title company has a secure portal, use it to receive and confirm wiring instructions. Also, be cautious about what you post online. Fraudsters often gather information from social media, real estate listings, and public records to make their scams more believable. The less personal information available about your transaction, the harder it is for scammers to target you.

What to Do if You Suspect Fraud

If you think you’ve been targeted by a scam or have already sent money to the wrong account, act fast. Immediately contact your bank and ask them to attempt to recall the wire transfer. The sooner you report the fraud, the better the chances of stopping the funds before they’re moved. Next, notify your real estate agent, title company, and lender. They can help confirm whether the instructions were legitimate and provide guidance on your next steps.

Reporting the fraud to authorities is also important. The FBI’s Internet Crime Complaint Center (IC3) tracks wire fraud cases and may be able to assist in recovering funds. You should also report the incident to the Federal Trade Commission (FTC) and local law enforcement. While there’s no guarantee of getting your money back, quick action increases your chances.

Protecting yourself from wire fraud and escrow scams requires vigilance. Scammers are always coming up with new ways to trick homebuyers and sellers, but being aware of the risks and following security best practices can help keep your money safe. Always verify wiring instructions, use secure communication, and stay alert for red flags. If something doesn’t seem right, take the time to double-check. It’s better to be overly cautious than to lose your hard-earned money to a scam.

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