Here’s one more thing to worry about if you’re trying to buy a home in the hot Seattle real estate market: You could get duped into wiring your down payment to a fraudulent account. Real estate professionals across the country and in the Puget Sound region report an alarming spike in wire fraud.
There are a lot of ways this can happen. Mike Grady, president and chief operating officer of Coldwell Banker Bain in Bellevue, said a common way it can start is if a homebuyer falls victim to a phishing scheme and gives up username and password information for their email account to a scammer.
Then, the scammer lurks in the background monitoring email traffic back and forth about the home purchase. When it’s getting close to closing, the scammer sends the buyer an email that looks like it’s from the escrow company with wiring instructions to a fraudulent bank account.
“Far too many buyers don’t bother to pick up the telephone and call the escrow agent on the land line that was first provided when they opened escrow and they just send the money to the perpetrator,” Grady said.
The FBI said there’s been a steep increase in this kind of wire fraud over the past year. In fiscal year 2017, attempted theft and actual theft of money from real estate purchases through wire fraud totaled an estimated $969 million, up from $19 million the year before, the FBI said.
Grady said it’s happened twice in the past six months to clients of his company. That’s a tiny fraction of the 6,000 or so transactions his company handled during that time, but it’s a big deal to the people involved.
“We had one six months ago that was like $56,000,” he said. “That was all the money the buyer had. They couldn’t close.”
He said that person may wind up getting the money back through the bank’s insurance eventually. But imagine getting that close to buying your house and having it fall through because your down payment got stolen.
Title and escrow companies, as well as real estate agents, are providing warnings to home buyers to be on the lookout for this kind of wire fraud.
Bill Bergschneider, CEO of Rainier Title, said his company managed to intervene quickly when a homebuyer got duped into sending $250,000 to a fraudulent account.
“The FBI got involved immediately and the funds were frozen,” Bergschneider said. “It took an extra day or so but the funds did get over to us. They never lost their money. It literally was within an hour of disappearing.”
There are two main things you can do to prevent this. Don’t fall for phishing attempts that seek to have you change your email password and never tell your passwrod to anyone. The FBI advises that you change your password often and don’t reuse an old one.
The FBI also recommends that you email and call the title or escrow company on a verified telephone number before wiring money. If you suspect that you’ve been scammed into sending money to a fraudulent account, the law enforcement agency said you should immediately report it to the bank and title company to initiate a recall.
Some real estate agents are advising that people pay with a cashier’s check and avoid wiring money altogether.