Closing Attorneys’ Shifting Role in Today's Real Estate Landscape

Key Takeaways

• The fight for deals after a slower-than-usual homebuying season is putting pressure on attorneys to differentiate themselves.
• In addition, with wire fraud rising across the industry, closing attorneys must now add fraud prevention to their list of duties.
• You can stand out from the crowd—and as a firm transaction partners and clients can trust—by providing exceptional customer service and offering a level of protection against fraud that others can't.

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As a closing attorney, you are a cornerstone of the real estate transaction process, ensuring that all legal aspects are executed smoothly and in accordance with the law. However, your role is evolving. The rise of wire fraud in the real estate industry has created new challenges that go beyond legal paperwork, putting both your clients and your reputation at risk. Wire transfers, often sent just days before closing, present a narrow but critical window for fraudsters to strike, leading to the potential loss of large sums of money for buyers and sellers alike.

In this high-stakes environment, your ability to prevent and mitigate fraud has never been more crucial. The complexity of today’s real estate landscape demands that closing attorneys step into a more proactive role as fraud preventers, safeguarding transactions from sophisticated scams that are constantly evolving. Let’s dive into the shifting industry dynamics that are making your expertise as a fraud protector more vital than ever.

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The impact of shifting interest rates

Interest rates are on the decline, and in September 2024, the Federal Reserve cut its benchmark rate by half a point—the first reduction in four years. This is excellent news for homeowners, many of whom are now considering refinancing or buying a new home. For closing attorneys, this also means an uptick in business. However, while more transactions may seem like a positive development, they also bring significant challenges.

Increased transaction volume can stretch your team thin, making it easier for mistakes to happen—and mistakes create opportunities for fraudsters. Heightened vigilance and thorough attention to detail are more important than ever in safeguarding your clients during this busy period.

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Rising competition in the real estate market

As transaction volume increases, so does competition among closing attorneys. To stand out in this crowded marketplace, it's no longer enough to rely solely on your legal expertise. Providing an exceptional client experience is a key differentiator.

One factor clients value above all else? Communication. Consistent, clear communication throughout the process is often what sets a great experience apart from a stressful one. Many buyers and sellers report that poor communication is their biggest frustration in real estate transactions.

In addition, approximately 60% of consumers receive minimal or no education about wire fraud during the closing process from their real estate professionals. This gap presents a significant opportunity for you to deliver added value. Educating your client about the dangers of wire fraud is essential, especially since it poses a risk to your transaction and you could be held liable if it happens.

As Sam Trimble, VP of Strategic Growth at FNF, noted in the To Catch a Fraudster webinar, “Create a customer experience that is so good, they literally can’t get it anywhere else.”

By ensuring clients feel protected and well-informed, you'll build stronger relationships that foster loyalty and turn clients into advocates for your firm.

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Address payoff fraud risks

The boom of refinancing will also bring heightened risks of payoff fraud. Payoffs are one of the largest disbursement risks in the title industry, and as a closing attorney, ensuring secure wire transfers is critical.

Fraudsters work by impersonating home buyers and sellers and by intercepting wire transfers. If you’re not verifying identities and validating bank details, you’re inviting fraudulent activity. Legacy verification procedures such as faxes and callbacks aren’t secure and just aren’t cutting it anymore. You need to be working with a real estate wire fraud prevention company that includes features such as identity verification and bank detail verification. 

PayoffProtect, as an example, uses a digital verification process that takes less than two minutes. You’ll get verified payoff instructions and peace of mind — and every verified payoff is backed by up to $2M in direct, first-party insurance.

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Embracing your role as a fraud fighter

The next generation of closing attorneys won’t just be legal experts—they’ll be fraud preventers. By partnering with trusted fraud prevention providers like CertifID, you can demonstrate your commitment to protecting your clients from the outset of the process.

Real estate wire fraud can devastate buyers and sellers, and all it takes is one case to ruin your reputation and your firm. But by staying vigilant, offering exceptional client experiences, and using the right tools – like CertifID – you can protect your clients from fraud and distinguish your firm in an increasingly competitive market. As the real estate industry evolves, so does your role as a closing attorney—embrace it, and become the trusted advisor your clients need.