How do I warn buyers about wire fraud before closing?

Give every buyer a wire fraud warning out loud, early and again before closing week. It's the most expensive mistake a buyer can make, and it happens every month. A wire isn't reversible. Once it's gone, it's usually gone, and the buyer can lose the house and the money. The warning takes thirty seconds: nobody will ever email you new wire instructions, and you always call title at a number you looked up yourself.

The short answer

Tell buyers at contract and again a few days before closing: wire instructions never change by email, verify by phone at a known number, confirm the account out loud with a person, and when in doubt, stop and call.

What to tell every buyer, out loud

1. Nobody will ever email you new wire instructions. Ever.
2. If you get an email changing wire instructions, it's a scam. Don't reply. Call.
3. Call title at a number you looked up yourself. Never a number that came in the email.
4. Confirm the account and routing numbers out loud, digit by digit, with a person at the title company.
5. When in doubt, stop. Call your agent or the title company before you move a dollar.

Step by step: when to say it

1. At contract. Include it in your under-contract text or email, and say it on the phone.
2. When earnest money goes in. Same rules. Many earnest money wires and transfers are targeted too.
3. A few days before closing. Say it again, right before they'll get real instructions.
4. The day they wire. "Did you call title at the number on their website to verify?"

What agents never do

• Never forward wire instructions from your own email.
• Never confirm an account number by text or email.
• Never say "that looks right to me." Send them to title to verify it.
• Never send wire instructions yourself unless your brokerage's process requires it, and then only through its secure method.

If something goes wrong

If a buyer thinks they wired to the wrong place: call their bank immediately and ask for a recall, call the title company, and report it to the FBI's Internet Crime Complaint Center (ic3.gov). Speed matters. Tell your managing broker right away.

A worked example (illustration only)

Two days before closing, a buyer gets an email that looks like it's from the title company: "Our bank changed. Please use these new instructions." The buyer remembers the warning, doesn't reply, and calls the title company using the number on its website. Title confirms nothing changed. The buyer forwards the email to title and their agent. Nobody loses a dollar.

Illustration only.

How to explain it to your client

Watch-outs

• Scammers watch email threads. They often know the closing date, the amounts and the names. A convincing email isn't proof.
• Texts and phone calls can be faked too. The rule is a number you looked up yourself.
• Protect your own email. Use strong passwords and two-factor authentication. A hacked agent inbox is how many of these start.
• Follow your brokerage's wire fraud policy and use any disclosure it requires.

This is training for real estate agents. It isn't legal advice. Follow your brokerage's wire fraud policy.

Frog tip: If your client plans to use a home equity line to buy first, have them open it before the home is listed. Many lenders won't open one on a listed home. Learn more →

Questions

When should I give the warning?

At contract, before earnest money, a few days before closing and the day they wire.

Should I put it in writing?

Yes, and say it out loud. Many brokerages require a written disclosure.

What if the buyer already wired?

Call their bank for a recall immediately, then title, then file at ic3.gov. Tell your broker.

Can sellers be targeted too?

Yes, especially with payoff and proceeds instructions. Warn sellers as well.

Is a phone call always safe?

Only if you dialed a number you looked up yourself.

Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.