While technology permits easy communication throughout the home buying process and thus a simpler transaction, it doesn’t come free of risks. Take for example a resident of Maryland named Bill Wiesand, who received an email from his real estate agent telling him that the title company needs him to deposit $10,000 to make the closing go as smooth as possible – or so he thought. It wasn’t actually his agent that sent him this email; it was a hacker who was impersonating the agent. This was a case of real estate fraud, something that is becoming a bigger risk for Maryland home buyers.
What is Real Estate Fraud?
The case we described above is a form of real estate fraud called “business email compromise,” which is when a scammer hacks into the email account of a person overseeing a real estate transaction (such as the realtor) and impersonates them. It is difficult for buyers and sellers to tell the difference because they are sending emails from the same account that the realtor has been communicating with them from.
How Does the Scammer Do This?
Shortly before the closing of a real estate deal, a scammer will attempt to hack the email account of the real estate agent or other party involved in the transaction. This is done by sending emails with malware attached. Once they are in, the scammer will wait for the perfect opportunity to fool the buyer or seller. Then, the scammer will often instruct the buyer or seller to wire their money for something believed to be imperative to the closing process to an account that actually belongs to the scammer. Once the buyer or seller falls for this, their money is usually gone forever, as the money is sent to an offshore account overseas. This makes it nearly impossible for the FBI to trace it.
A 3 Billion Dollar Issue
According to the FBI’s Internet Crime Complaint Center, these attacks have affected almost 22,000 people in the United States. How much lost money does that equate to?-3 billion dollars.
The Risk for Maryland Home Buyers
Last year, Maryland residents lost roughly 6.3 million dollars to real estate fraud. Overall, Maryland ranks as the 8th most-targeted state for these types of attacks, with more than 3,100 people affected. Even though other businesses are at risk for this type of attack, the real estate industry is especially at risk because of the significant one-time transactions that take place online. To counteract this unfortunate trend, Maryland real estate and title companies are educating their employees through informational seminars and training on protecting oneself from real estate fraud.
What Can Be Done
While there is no way to stop these scammers from doing these attacks altogether, you can prevent them from succeeding. If anything seems suspicious, such as a last-minute request to wire money to an account, be cautious. Verify each email with the agent or respective party by getting their verbal confirmation over the phone. Though these precautionary steps may be a slight inconvenience, it’s better to be safe than sorry.
Lakeside Title Is Here to Serve You!
Lakeside Title provides title insurance and numerous title-related services, all while making sure your transactions and funds are protected and secure. Our processes streamline residential and commercial real estate transactions for lenders, realtors, buyers, and sellers. To learn more, give us a call at 410-992-1070. We look forward to the chance to serve you!