Real estate fraud risks are increasing, prompting victims to raise awareness about the issue.
According to CertifID’s 2024 State of Wire Fraud report, 1 in 20 Americans involved in home transactions within the last three years fell prey to real estate fraud. The median consumer loss exceeds $70,000, often stemming from stolen down payments and net proceeds.
Fraudsters are employing sophisticated tactics, such as exploiting public records, breaching broker and title agency systems, and impersonating transaction participants. A Virginia couple, Darryl Aldrich and his wife, shared their harrowing experience of losing over $28,000 in a wire fraud scam just days before closing on their home purchase.
Despite receiving what seemed to be legitimate wiring instructions from the title company, the couple unknowingly transferred the funds to a criminal’s account. The fraudster had convincingly posed as a contact from the title company, leading to a devastating financial loss.
While the Aldrichs were fortunate that their bank flagged the suspicious activity and recovered the funds, many victims are not as lucky. In 2022, the FBI reported a record $446.1 million in losses due to business email compromise, a category that encompasses real estate fraud.
CertifID’s CEO, Tyler Adams, emphasized the escalating nature of this crime as fraudsters become more sophisticated. He urged heightened vigilance for individuals entering real estate transactions, especially first-time homebuyers, stressing the need to scrutinize every communication from real estate agents and title companies.
Adams highlighted the broader impact of these scams, noting that title companies are also falling victim to phishing schemes, sending funds to fraudulent sellers or submitting payments to scammers posing as mortgage recipients.
Despite the prevalence of real estate fraud, CertifID’s survey revealed that over half of consumers were unaware of these scams before closing, with 60% receiving minimal education on fraud risks from their agents, title agencies, or attorneys.
Darryl Aldrich called for increased awareness and preventive measures, suggesting in-person wire verifications or the option of certified checks to enhance security in real estate transactions.