The entire mortgage closing process to close on a new home – and get the keys in hand – can be exhausting for new homebuyers. As you know, there is a lot that goes into buying a home – many careful steps must be taken and a lot of paperwork needs to be drawn up, reviewed, and signed. Everything has to be perfect on the closing day so that it is a smooth process for all parties involved.
During this time, the last thing on anyone’s mind is wire fraud – despite the fact that wire fraud happens way more than you think. As professionals in the industry, you know what to look for – and how the process works. So, getting an email asking for the funds to be wired may seem out of character and cause red flags. However, for a new homebuyer who is anxious to get the keys to a new home? Well, the click of a button may land their entire down payment – or full purchase funds – straight into a scammer’s hands. Ready for the worst part? They won’t be able to get it back.
Watching this devastating situation unfold is exactly why it is necessary to educate new home buyers about wire fraud in real estate transactions.
How Wire Fraud Happens
Email is a wonderful tool, allowing us to communicate instantly from anywhere around the globe. Scammers think it is a fine tool, too – using it to target real estate professionals just like you. They sneak in there and monitor the details of your current and future real estate transactions.
Using the info they have gathered, they draft a legitimate-appearing email and reach out to homebuyers with wire instructions. The email will contain only the info you would know as someone involved in this real estate transaction. Unsuspecting home buyers believe you are telling them where to wire the money and so they do it. After all, they want their new home.
The scammers may pose as a real estate agent, the settlement agent, legal representative, or any other trusted individual within the process. And their emails look almost identical to the real thing. It’s easy to make this mistake – especially if you haven’t been educated about wire fraud in real estate transactions.
How to Help New Homebuyers Avoid Being Scammed
If you really want to make a difference and help new homebuyers avoid falling victim to these scams, then there are steps that you can take. For instance, you can advise your buyer that you will never send out wire instructions via email. Since they may not know how the process works, take the time to explain to them what they can expect. This may spark a red flag should something different happen, such as wire instructions via email.
Sadly, even telling your buyers that you will never send out wire instructions via email may still result in them jumping the gun and falling for the request. It is a hectic time for everyone involved in a real estate transaction – but even more so for those buyers going through the process for the first time.
Consider investing in a program that will protect all buyers from any future issues — and you will find that it reduces these disastrous situations.
Protect Your New Homebuyers with ClosingLock
While education is always important, sometimes it is just easier to take steps to prevent the issue from happening in the first place. This removes the need for any extra work – and it keeps new homebuyers from suffering a heart-wrenching loss.
With ClosingLock you can protect your new homebuyer by offering a safe, encrypted way to handle communications, paperwork, and wire transfers. Multi-factor authentication and notifications of changes further keep the system safe.
To learn more about protecting your new homebuyers from experiencing any wire fraud real estate transactions, contact ClosingLock today at (512) 270-3917.