Imagine this nightmare scenario: You’re days away from closing on a home, and everyone’s excited. Then an email arrives from what looks like the title company, with revised wiring instructions for the buyer’s down payment. It seems legitimate… but it’s actually a trap.
A hacker had been lurking in the email threads. The buyer wires their hard-earned money to the fraudster’s account, and by the time anyone realizes, the cash is gone.
This is how easily a real estate transaction can get hijacked by identity theft – in this case, a criminal impersonating a trusted party (empirelearning.com). Unfortunately, it’s not the only way identity thieves wreak havoc in real estate.
Let’s explore how these heists happen, and more importantly, how to stop them.
Hijacked Deals
The wire fraud scenario above is all too common: a criminal gains access to an agent’s or title officer’s email and uses that access to impersonate them, sending fake instructions. But consider another real example making the rounds: seller impersonation fraud. In this scheme, a scammer poses as the property owner to trick an agent and buyer.
They often target vacant land or second homes. The scammer contacts an agent, says, “I want to sell this property but I’m currently overseas.” They refuse in-person meetings, maybe claiming time zone issues or COVID restrictions, and insist on doing everything remotely.
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They even provide what looks like a real ID. They price the property low for a quick, all-cash sale. If no one catches on, an unsuspecting buyer could purchase the property and only later find out the seller was an imposter (lawyersmutualnc.com).
The true owner’s identity was stolen, the title transfer was fraudulent, and now there’s a big legal mess. These stories are scary, but knowing about them is the first step in prevention.
How to Prevent Identity Theft from Hijacking Your Transactions
It boils down to vigilance and verification at every step. Here are some actionable strategies:
- Verify Identities Relentlessly: For buyers, this means verify that any communication about money is coming from the right person (call your known contacts!). For sellers, especially if you’re dealing with someone you’ve never met in person, dig deeper. Red flags for a fake seller include refusing video calls, being in an unusual rush to close, and a below-market price push(lawyersmutualnc.com). Don’t hesitate to ask for additional ID verification, like a second form of ID or even past utility bills or property tax receipts that only the real owner could have (lawyersmutualnc.com). A legitimate seller will understand caution; a fraudster will often balk. Trust your gut – if something feels off about a person’s identity, press pause and verify through another channel.
- Lock Down Communications: Use secure platforms when possible for sharing sensitive info. If you’re emailing, consider adding encryption for emails with personally identifiable information. Never send new wire instructions over regular email – if you must send instructions, do it through a secure portal or verbally. And instruct your clients from the get-go: I will not be changing wiring info via email. Set that expectation early, so any rogue message stands out as suspicious. Some agents even include this warning in their email signature or an initial letter to clients. It’s a smart practice in an age when email can be hijacked.
- Involve the Team: Title companies and attorneys are also implementing verification steps (like calling the client directly if they receive an email to change payout bank details). Encourage that! As an agent, you can coordinate with the title company to ensure everyone is on the same page about verification procedures. If you’re all watching each other’s backs, it’s much harder for a fraudster to slip through.
- Learn from the Close Calls: Stay informed on the latest scam attempts in your region. If you hear about a fellow agent who encountered a phishing attempt or a fake seller, talk about it at office meetings. The more these stories are shared, the more alert everyone becomes. Real estate associations, the FBI, and state regulators often put out fraud alerts – take five minutes to read them when they come across your desk.
In short, a real estate deal can only be “hijacked” by identity thieves if we let our guard down. By building in checks and balances, you can keep control of the transaction and shut out the imposters. It might add a few extra steps, but those steps can save your clients (and you) from a disaster.
Stay One Step Ahead Of The Fraudsters By Continuous Learning
Consider taking a deep-dive real estate CE course on identity theft and wire fraud prevention. Such a course will walk you through real-life case studies (the ones that make your stomach drop) and teach you exactly how those could have been prevented. It’s like a playbook for protecting your deals.
And here’s the bonus: most of these are online real estate CE courses you can do at your own pace, and they count toward your required continuing education hours. In other words, you’re turning a horror story into a professional development opportunity!
Continuing education for real estate agents isn’t just about meeting a requirement – it’s about gaining peace of mind. So why not invest a little time in an identity theft prevention class?
It’s an affordable Real Estate CE online option to fortify your business. After all, knowledge is the best armor we have to keep our transactions safe and secure.
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For real estate professionals, understanding these concepts can be particularly valuable during discussions with clients about why REALTORS® and real estate agents are knowledgable professionals.
If you’re preparing for your Real Estate Continuing Education or looking to enhance your knowledge through a Real Estate Course, topics like preventing identity theft can help set you apart.
As part of your License Renewal Course or other Real Estate CE efforts, staying informed on foundational property concepts can make a big difference in your expertise and client relationships.