Real Estate Wire Fraud: How to Protect Your Closing Funds

Buying or selling a home involves moving a large amount of money, which makes real estate transactions an attractive target for fraudsters.

Real estate wire fraud occurs when criminals use email or other electronic communications to divert money intended for a real estate transaction into an account they control. Criminals may compromise the email account of a buyer, seller, real estate agent, title company, escrow officer, or attorney and monitor a transaction until they have an opportunity to intervene.

The fraudulent message may contain the correct names, property address, transaction amount, and other details. It can look completely legitimate.

The most important rule is simple: Never send money based solely on an email. Always independently verify wiring instructions before transferring funds.

How Real Estate Wire Fraud Happens

A typical scam begins when a criminal gains access to an email account or otherwise obtains information about a real estate transaction. They may monitor communications for weeks or months.

When they know that a deposit or closing payment is about to be sent, they impersonate someone involved in the transaction and provide fraudulent wiring instructions.

The buyer or seller may believe the instructions came from the escrow officer, title company, real estate agent, attorney, or another trusted party.

Once the money is wired to the fraudulent account, recovering it can be difficult. That is why prevention and rapid action are so important.

The National Association of REALTORS® Consumer Guide to Real Estate Wire Fraud recommends independently verifying wiring instructions and being particularly suspicious of last-minute changes.

How to Protect Yourself From Real Estate Wire Fraud

1. Know How Your Real Estate Team Will Communicate

At the beginning of your transaction, ask your real estate agent and escrow or title company how they will communicate with you about money and wiring instructions.

Establish the phone numbers and other contact information you should use to reach them. Keep this information somewhere you can access independently of your email.

I will never email you asking you to change previously verified wiring instructions or asking you to send sensitive financial information such as bank account or investment account numbers.

2. Verify Every Wire by Phone

Before you transfer earnest money, a down payment, closing funds, or any other substantial amount:

Call a known, trusted number.

Do not use a phone number contained in an unexpected email, text message, or voicemail. Instead, use a number you obtained independently—for example, from your original transaction documents or from a previously established contact.

Speak directly with the escrow or title representative responsible for receiving your funds and confirm the wiring instructions.

If you receive a message saying that previously provided wiring instructions have changed, stop and verify the change before sending anything.

A change in payment instructions should always be treated as a potential fraud attempt until you have independently confirmed it.

3. Never Verify a Suspicious Email by Replying to It

If an email appears suspicious, don’t simply hit Reply and ask whether it is legitimate.

If an account has been compromised, your reply may go directly back to the criminal.

Instead, start a new communication using a trusted phone number or other contact information you obtained independently.

This is one reason that having verified contact information for your escrow or title officer before closing is so important.

4. Be Suspicious of Urgent or Last-Minute Requests

Be cautious about any message that:

• tells you to send money immediately;
• says that wiring instructions have changed;
• asks you to keep the change confidential;
• claims that someone is unavailable by telephone;
• provides a different bank account from previously supplied instructions; or
• pressures you to act before you have time to verify the request.

A legitimate transaction should not require you to bypass normal verification procedures because someone says the matter is urgent.

5. Don’t Judge an Email by How Professional It Looks

Fraudulent emails can contain legitimate names, logos, signatures, transaction details, and convincing language. A slightly different email address can also be difficult to notice.

Look carefully at the actual sender address and domain, but don’t rely on that alone. Even an email that appears to come from a familiar person could have been sent from a compromised account.

Independent verification is more reliable than appearance.

6. Coordinate With Your Bank or Financial Institution

If your purchase funds are coming from a bank, brokerage account, investment account, or other financial institution, ask about its wire-transfer procedures in advance.

Some institutions have security procedures or processing delays that can affect how quickly funds can be transferred.

Before initiating the transfer, make sure you understand:

• how the wire will be initiated;
• what information your financial institution requires; 
  

  Always be vigilant!

• whether the receiving account information can be independently confirmed; and
• how to contact the institution immediately if something goes wrong.  

7. Ask Whether a Cashier’s Check Is an Option

If you are uncomfortable with an electronic wire transfer, ask your title or escrow company whether a cashier’s check is an acceptable alternative for your particular transaction.

A cashier’s check may eliminate the particular risk of fraudulent electronic wiring instructions, but do not assume it is acceptable without confirming with the escrow or title company first.

Funding requirements and deadlines vary by transaction.

8. Confirm Receipt of Your Funds

After initiating a wire, contact your escrow or title officer using a verified phone number and confirm that the funds have been received.

Don’t rely solely on an email confirmation.

The important point is not whether the confirmation arrives within a particular number of hours. Confirm receipt as soon as reasonably possible after sending the funds.

A Hawaii-Specific Note for Buyers and Sellers

Wire fraud is not just a mainland real estate problem. Hawaii’s own real estate regulators have addressed the risk of fraudulent wiring instructions in real estate transactions.

The Hawaii Real Estate Commission has previously discussed a real estate wire-fraud case in which a buyer relied on wiring instructions that were not adequately verified. The Commission emphasized that heightened diligence by everyone involved in a transaction is necessary to reduce the continuing risk of wire fraud.

The State of Hawaii has also published consumer guidance specifically addressing escrow wire fraud, advising consumers to return to their original transaction documents and call a trusted, verified phone number before sending money.

For a Hawaii real estate transaction, the practical rule is the same:

Do not assume that wiring instructions are legitimate because they appear to come from your escrow company, title company, real estate agent, lender, or another person involved in the transaction. Verify them independently before transferring funds.

For Hawaii buyers and sellers, this is particularly important because real estate transactions frequently involve substantial sums and multiple parties communicating electronically across different locations and time zones.

What If You Think You Have Been a Victim of Wire Fraud?

Act immediately. Do not wait to see what happens.

If you have sent money to an incorrect account or suspect that your wiring instructions were fraudulent:

1. Contact Your Financial Institution Immediately

Call your bank, brokerage firm, or other financial institution and tell them that you believe you have been the victim of wire fraud.

Request that they initiate a wire recall and contact the receiving financial institution as quickly as possible.

The FBI’s Internet Crime Complaint Center (IC3) emphasizes reporting internet-enabled fraud promptly. IC3’s 2025 Internet Crime Report documents more than one million complaints and more than $20 billion in reported losses from internet crime during 2025.

Recovery of stolen funds is not guaranteed, but time matters. Do not wait until the next business day if you suspect a fraudulent wire.

2. Contact Your Real Estate Team

Notify your real estate agent and your title or escrow company immediately.

They can help alert the appropriate parties and take steps to protect the transaction from further fraudulent activity.

3. Preserve the Evidence

Do not delete the suspicious emails, texts, wiring instructions, or other communications.

Save copies of:

• emails and attachments;
• wiring instructions;
• phone numbers and email addresses used by the sender;
• bank transaction information;
• receipts and confirmation numbers; and
• any other communications related to the transfer.

These records may be important to your financial institution and law enforcement.

4. Report the Fraud to IC3

If you believe you have been the victim of internet-enabled fraud, file a report with the FBI’s Internet Crime Complaint Center (IC3) at ic3.gov.

The FBI describes IC3 as the central intake point for reporting cyber-enabled crime and encourages victims to report internet fraud even when there is no financial loss.

You should also notify your local law enforcement agency.

The Rule to Remember: Never send money based solely on an email.

Before you wire funds, independently verify the instructions by speaking directly with the escrow or title representative using a trusted phone number. If wiring instructions change unexpectedly: Stop. Verify. Then send.

A few minutes spent making a phone call could protect a very large amount of money.

Resources

For additional information about protecting yourself from real estate wire fraud:

• National Association of REALTORS® — Consumer Guide: How to Protect Against Real Estate Wire Fraud — Practical guidance for consumers on verifying wiring instructions and recognizing potential scams.
• FBI Internet Crime Complaint Center (IC3) — The FBI’s online reporting portal for internet-enabled crime.
• FBI — 2025 Internet Crime Report — The latest annual IC3 report, including statistics on reported internet crime and financial losses.
• FBI — Common Frauds and Scams — General information from the FBI about recognizing and reporting fraud.

Wire fraud is a real risk in today’s real estate transactions. Knowing how these scams work and following a consistent verification process can substantially reduce your risk.

 

With Aloha!

Carol Porter, REALTOR®

Hawaii Real Estate Salesperson RS-87584

Better Homes and Gardens Real Estate Island Lifestyle

Direct: 808-769-0727 or 650-274-5200