Real Estate Wire Fraud: How to Protect Your Down Payment

Your down payment may be the largest amount of money you ever move at once. That makes home buyers a target. Wire fraud in real estate is a well-known scheme, and it can happen to careful, smart people. The good news is that a few simple habits stop it almost every time.

How the scam works

1. A criminal gains access to an email account belonging to someone in your transaction, or creates a look-alike address.
2. They watch the conversation and learn your closing date and amount.
3. Days before closing, you get an email with “updated” wiring instructions that look official.
4. You wire the money to the criminal’s account, and it moves on within hours.

Red flags to watch for

Red flag	Why it matters
Wiring instructions arrive by email or text	Many settlement companies deliver them through a secure portal or in person
A last-minute change of bank or account	Legitimate companies rarely change accounts mid-transaction
Urgent pressure to wire today	Scammers want you to act before you think
A slightly different email address	Look for one changed letter or a different domain
A request to keep it confidential	Real professionals welcome verification

A simple verification routine

1. Save your settlement company’s phone number at the start of the transaction, from its official website or your contract.
2. Before wiring, call that number and confirm the account and routing numbers out loud.
3. Send a small test amount only if the settlement company suggests it, and confirm receipt by phone.
4. Call again after sending the full wire to confirm it arrived.
5. Never verify using a phone number, link or contact in the email with the instructions.

An example of a close call

A buyer I know of received an email that looked exactly like her settlement company’s, with the right logo and her file number, saying the company had “switched banks for an audit.” She called the number saved in her phone from the start of the transaction. The settlement company had sent no such email. That one phone call protected $90,000.

If you think you’ve been scammed

1. Call your bank immediately and ask it to recall the wire and contact the receiving bank.
2. File a complaint with the FBI’s Internet Crime Complaint Center at ic3.gov.
3. Notify your settlement company, lender and agent.
4. Contact local police and keep every email and record.

Speed matters. The sooner the banks are notified, the better the chance of stopping or recovering the funds.

Protect your accounts during the transaction

• Turn on two-factor authentication for your email and bank accounts.
• Use a strong, unique password for email, since it’s the most common entry point.
• Avoid sharing closing details on social media until after you have the keys.
• Keep a written list of everyone in your transaction with their verified phone numbers.
• Read every email address carefully before replying to anything about money.

What most people miss

• Sellers are targets too, with fake payoff instructions or proceeds redirection.
• Strong, unique passwords and two-factor authentication on your email help protect the whole transaction.
• Public Wi-Fi isn’t the place to review closing documents or banking details.

Most importantly, slow down. Scammers rely on urgency. A wire that goes out an hour later after a verification call is always better than one that goes out instantly to the wrong account. Treat any change to payment details as suspicious until you have confirmed it by phone with someone you know and trust in the transaction.

Frequently asked questions

Is a cashier’s check safer than a wire?

Some settlement companies accept certified funds for smaller amounts, but many require wires for larger sums. Ask your settlement agent what they accept.

What happens on closing day?

See Closing Day in Virginia.

What should I know about earnest money?

The same verification rules apply. Read Earnest Money Deposits in Virginia.