Homebuying is stressful enough as it is without scammers out there trying to get their hands on your money, but unfortunately that's exactly what they're doing. According to the Real Deal, $969 million was "diverted or attempted to be diverted" from homebuying transactions in 2017, a frightening uptick from the $19 million reported in 2016. Here's how to avoid becoming a victim.
This is how it works: scammers are hacking into the email inboxes of the people who handle big real estate transactions (agents, lawyers, etc.) and sending buyers fake emails from their accounts asking the buyer to wire them funds. They make off with the buyer's down payment, leaving them high and dry, and since the transactions are authorized by the buyer, there's very little police can do to recover the money.
Vice president of the Threat Research Center at WhiteHat Security, Ryan O'Leary, told CNBC, "Scammers and hackers want to target you when you're either scared out of your mind or extremely happy, real estate is the perfect one-two combo, and there's a lot of money at stake."
Buyers can take a few steps to make sure their money ends up where it is supposed to:
If you receive an email with instructions to wire money, always verify by phone. Don't call the number listed in the email if it is different from one you've been using—call the number you know to be legit. Any last minute changes or updates are red flags, so verify in person if you can.
They also recommend securing your own email if possible, using a file-transfer service or the secure portal set up by your real estate agent. Practice routine cyber security updates and follow up on anything that seems suspicious.
If you do find yourself in the middle of scam, call your bank to freeze the payment and call the police and FBI immediately. Overall, pay close attention and trust your gut with anything that doesn't feel right.
More homebuying advice:
- Why Buying a Home is the Best Thing I've Ever Done
- Want to Buy a Home One Day? We Have Real Answers for All Your Biggest Homebuying Questions
- Here's What Your Real Estate Broker Won't Tell You
- The Biggest Misconception First-Time Buyers Have About Making an Offer on a Home
- The House Hunting Trick That Might Just Turn Everything Around (Literally)