4 Critical Questions to Ask Real Estate Professionals in the Age of Wire Fraud

Key Takeaways

• Buyers and sellers are vulnerable to wire fraud, and it's important to be your own advocate for safety.
• Consumers should check on wire fraud prevention measures with real estate brokers, title agents, and closing attorneys involved in any home buying or selling transaction.
• Working with real estate professionals using CertifID guarantees a high standard of wire fraud prevention.

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While wire fraud isn’t a new phenomenon, the technology that fraudsters use continues to evolve, allowing them to manipulate, deceive, attack, and steal vast sums from their victims. With so many recent and historic examples, most consumers are aware of the threat of fraud. Yet fraudsters continue to claim new victims at alarming rates. In 2023, the FBI registered 880,418 cybercrime complaints with potential losses exceeding $12.5 billion.

Wire fraud is escalating especially rapidly in the real estate industry. One in four real estate transactions is targeted for fraud. Losing an entire down payment or mortgage payoff to cyber criminals is a nightmare situation that no home buyer or seller wants to experience. When starting the home buying or selling process, you’ll want to make sure you’re working with real estate professionals who have taken appropriate steps to safeguard your transactions. While CertifID partners have met or exceeded high industry standards for cybersecurity and duty of care, others are operating with outdated methods for communicating sensitive information and moving money.

Use the guidance below to assess and advocate for your security during the home buying and selling process. Whether you’re working with a real estate agent, closing attorney, or title agent, real estate pros should be prepared to answer the following questions about how they’re safeguarding your wealth.

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1. “What technology and approaches are you using to prevent real estate fraud?”

Real estate brokers, closing attorneys, and title companies each have role-specific software and strategies they use, but all of them should have systems in place to protect you from real estate fraud throughout the entire transaction. Ask them what technology they use and steps they take to make sure funds are reaching the right bank accounts without interference from fraudsters.

Firms that take your security seriously will have systems in place to validate and communicate sensitive data among the buyer, seller, and their representatives, including banking details and identifying information, like social security numbers. The optimal software will include features like ID verification to prevent imposters from using fake IDs to impersonate you or the other participants. You can use CertifID as an example of a solution for comprehensive encryption, identity verification, and banking confirmation.

Your professional real estate partners should also be able to speak to their procedures for protecting you and your personal data from threats like phishing, ransomware, and social engineering. If they’re like CertifID's partners, they will have invested in layered cyber security and in training their staff to maintain a high standard of care.

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2. “What information can you give me about avoiding real estate wire fraud?”

Ask your closing attorney, real estate agent, and title company for materials about avoiding real estate wire fraud. Many of us have seen disclaimers about fraud in communications from banks, utility companies, and insurance providers, but these don’t provide sufficient detail to help users understand and avoid theft in the current threat landscape. 

Emerging fraud techniques include exploitation of AI, cryptocurrency, instant payment technology, and persistent social engineering that may be difficult to catch, even for industry veterans. Real estate wire fraud has evolved to include elaborate seller impersonation and vacant land schemes. The best real estate professionals will notify you of any emerging threats and provide detailed information to help you understand and avoid them. 

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3. “How would you support me if a data breach or fraud occurs?” 

Fraud can happen to anybody. Fraudsters target the most savvy industry experts and have even been known to hack systems with the strongest defenses. In these cases, responsible real estate professionals fall back on their Incident Response Plans to recover victims’ funds, bring cybercriminals to justice, and fulfill their duty to close on properties without further delay. Ask your agent or attorney how they’re prepared to act quickly should a data breach occur and how they plan to prevent any further damage.

Many consumers have already experienced some form of personal data compromise in their lives, and have seen the range of ways companies can react. For example, you may have received a notification about a data breach from an online retailer where you’re an account holder. Some companies demonstrate genuine efforts to make amends, while other businesses may delay action or avoid responsibility. You’ll want to know that any real estate professional you work with will act swiftly and take the appropriate measures to fix the situation.  

In most cases, liability policies don’t require banks to reimburse victims of wire fraud, so it’s up to real estate professionals to advocate for buyers and sellers impacted by fraud. Ideally, your real estate brokerage or title agency never experiences a cyber attack, but you’ll want to understand the support you’ll receive if they do. 

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4. “Who else are we working with during this transaction and how are they taking steps to prevent fraud?”

Fraudsters target home buyers and sellers in part because there are so many parties in a real estate transaction, and each one introduces new vulnerabilities. If you’re working with a real estate agent, ask them about the closing attorneys or title agencies they refer to their clients, and ask them how confident they are in each firm’s approach to wire fraud prevention.

In states that require attorney representation for all parties in the transaction, you can ask your attorney about the reputation of legal counsel for the buyer/seller. Most real estate attorneys default to a particular title insurance company, but it is ultimately the buyer’s choice. You can advocate for a title company dedicated to wire fraud prevention.

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Be your best advocate

These questions will help you assess whether your closing attorney, real estate broker, or title agent are prioritizing your security at a time when the risks of wire fraud are greater than ever. As a home buyer or seller in today's complicated market, you're often your best champion for security. Be sure to take care of the most important transaction in your life by asking your real estate partners to confirm their security protocols.

And remember, true allies in the fight against wire fraud will meet high industry standards for cyber security and customer care. Find them on our website, and proceed with your real estate transaction with peace of mind.