Make A Phone Call!

It’s More Important Than You Think.

When it’s time to buy a new Florida home, it’s exciting, scary and you might travel through a range of emotions.  There’s so much at stake and the payoff at the end, being in your new home, can be glorious!

There are a lot of elements to consider in the process: which lender, what mortgage rate, urban vs. suburban, HOA or no HOA, two story or one story, condo or single family residence, other smaller details, and the list goes on.

You’ll want to protect your investment and your largest physical asset with homeowner’s insurance, title insurance, multiple inspections, and possibly a home warranty.

But in the course of protecting your assets, had you considered the possibility of protecting your cash assets in the transaction against fraud?

According to Keith Givens, FBI Special Agent and Fraud Expert, fraud has become prevalent in the real estate industry in the past 3-4 years, especially in Florida.  Because large sums of money are transferred via wire, fraudsters have figured out how to circumvent the movement of these funds for their gain.  Since 2020, reported losses suffered by victims of business email compromise (BEC) have risen 150% and the 2023 losses were calculated by the FBI to have totaled $2.74B.

Here’s how BEC happens in a real estate transaction:

1. The email of just one of the parties is hacked.
2. The victim is the buyer or seller.
3. The hacker poses as the buyer or broker or lender sending an email to the buyer or seller changing account information.
4. No one verifies the new account information and wires funds … but unwittingly to the hacker.

There are multiple parties to a real estate transaction: the seller(s) and their agent, the buyer(s) and their agent, the closing agent (title company or attorney), the mortgage company providing the funds, and the recipient bank receiving the funds.  Because of the multitude of parties involved, it’s all the more crucial that all parties remain vigilant.

You can avoid becoming a victim of fraud in your real estate transaction by staying alert to the following:

1. Pay attention to attachments and hyperlinks coming into your email box. If you don’t know and trust who they’re coming from, stay safe and don’t click on them.
2. If you want to check out the link, google the subject or company directly in your browser.
3. Avoid sending sensitive documents via a web-based email (i.e. gmail.com).   Even the Purchase & Sale contract has a lot of pertinent details within it that the hacker uses in his scheme to appear even more legit.   Use secure portals for sending sensitive information.
4. Scrutinize any email requests for funds transfer.  Hackers can make a request look legitimate, often duplicate the first one, but will change one small element in an email address to make it look like it’s coming from one of the legitimate parties of the transaction.  
5. Be aware of red flags like a slight difference in type style, one letter different in an email address, use of military time for deadlines, or unsolicited updated pay-off letters.
6. Beware of sudden changes in business protocol.   Wire transfer instructions for a legitimate transfer don’t change at the eleventh hour!
7. MOST IMPORTANT (AND THE BIG TAKE-AWAY FROM THIS BLOG): Always employ a two-step verification system for wire transfers.  Make a phone call to the closing attorney or title company to verify the wiring instructions a second time before you wire the funds.

BEC fraud has become a high priority for the FBI. If you become a victim of fraud or suspect it could be happening, contact your financial institution immediately, share what has happened, ask them to hold the funds, and request they contact the recipient financial institution immediately.  If this happens, or even if you suspect a fraudster has jumped in the middle of your transaction, STOP all money movement, and contact your local FBI office then file a complaint with the FBI Internet Crime Complaint Center at www.IC3.gov.