The Federal Trade Commission as well as the National Association of REALTORS® have released a warning to potential homebuyers regarding an increasing home closing scam that could cost you thousands. We all know a home purchase involves a large exchange of money, no matter what your purchase price, down payment, closing costs, etc. Scammers know this too and seek to take advantage of it. We’ll show you how they do it below.
What is the Home Closing Scam?
The FTC and NAR warn scammers carry out their plans by hacking into your email, as well as those of the real estate professionals you are working with in order to gain information about the you closing. This includes the purchase amount, date, bank, names, and more. The hackers then contact all parties posing as a title company or other real estate professional. Hackers compose an email saying something along the lines of
There has been a last-minute change regarding the recipient of the wire transfer for the requested transaction. Kindly change the information to…
Of course, the spelling and grammar may not be as good. The unsuspecting parties then wire the funds to an account completely unrelated to the home purchase, with little to no recourse for recovering the funds.
How to Avoid the Home Closing Scam
As with any scam, it is important for you to get in touch with the party directly. For example, if the email is allegedly from the title company, contact them yourself or have your real estate agent do so. Here are some other tips for avoiding the scam:
- Do not use the contact info contained in the sketchy email.
- You may contact the bank on the receiving end of the wire transfer to confirm its recipient.
- Have your real estate agent review the closing documents to make sure all funds are being transferred to the correct account(s).
- NEVER send secure or sensitive financial information through email. Realtors, title companies, loan officers, etc. often have their own platforms for you to send your information.
Sometimes the scammers are even able to hack the emails of your real estate professionals and send you a realistic looking request. Don’t be afraid to contact them directly to confirm the legitimacy of the request.
You can read more about this and other related scams by clicking here.
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