Wire Fraud Can Rob Home Buyers of Their Life Savings

An October article for Bloomberg BusinessWeek describes an increasingly common cyber crime perpetrated against home buyers.

Since most title companies want the money for closings wired to their bank accounts, scammers have mastered the art of impersonating real estate agents, loan officers and escrow agents and sending highly credible emails providing the wrong wiring instructions for buyers’ down payments. These down payments can often be in the hundreds of thousands of dollars, and if the authorities aren’t notified of the deception within minutes, those wired funds are typically out of the country and not recoverable.

That’s why all buyers should be suspicious of any email containing wiring instructions and always call the title company to get the correct wiring instructions verbally. And don’t call the number for the title company that’s in the suspicious email! Look up the phone number or get it from your paperwork.

Wire fraud is so common that one of my favorite title companies, First Integrity Title, has a wire fraud warning instead of music on hold when you call them. After several times on hold with them, it can become pretty annoying, but that just shows how important they consider the warning to be, because too many home buyers have lost their life savings and the home that they were about to close on.

Integrity, for the Most Part, Still Rules in Real Estate

We all need to be careful that we are not scammed. We see scams all around us — in our emails, phone calls, text messages, and snail mail. Seniors in particular are targeted by scammers who have no shame about cheating someone out of their life savings.

Title companies warn buyers and sellers about wire fraud. Buyers have been known to get emails purportedly from their agent or title company giving them wiring instructions for their down payment or, in the case of a cash buyer, for the entire purchase price of a property they are buying, only to discover that they wired the money to a scammer on another continent from which it can never be retrieved.

Time shares (or fractional ownership) is another area rife with misrepresentation and deceptive practices that can trap an unwary buyer in the purchase of something they don’t really want and can’t really sell. (I speak from personal experience.)

And, yes, there are a few local real estate professionals who engage in illegal or improper behavior for which they get disciplined by the Colorado Real Estate Commission.

But I have to say that overall I have been very impressed by the level of integrity that I encounter among my fellow professionals.

Ask any Realtor, in particular, and he or she will probably tell you, as I can, that they can hardly recall a time when a fellow professional intentionally lied to them or misrepresented a client, listing or situation.

If, for example, I’m representing a buyer and the listing agent says there are three other offers and they’re all above full price, I’m confident in believing that to be true. I’ve completed hundreds of transactions and can’t recall one where I was told something that turned out not to be true or a fact withheld by the agent. Most sellers, I have found, are also aware of their responsibility to disclose all known defects, and, if not, their agent lets them know.

As an industry, we need to trust our fellow professionals, and I have found little or no reason not to. We are not just “honor bound” to be truthful. Being dishonest puts our very livelihood at risk, since any colleague or member of the public could report us to the Real Estate Commission, our MLS, or our Realtor Association, possibly resulting in a fine or even the loss of our license to practice real estate.