Picture this… You’re about to sell your house and retire to Florida. The documents are signed, movers are hired, and all you need to do now is confirm that the title company’s wire has hit your account. You receive a call from the closer that the funds have been wired. You check your account—no wire.
An hour goes by, then two, then twenty-four hours, then two days. When you ask the title company to confirm the wire instruction from “your” email, you discover to your horror that the wire instructions “you” sent were not from you, but from a hacker who got into your email, found out you were selling your house, and sent fake instructions to the title company.
This has happened before and will almost certainly happen again. But it doesn’t have to if you are diligent and careful.
Smart criminals posing as title agents, attorneys, buyers, and sellers have swindled parties out of millions of dollars. These thieves hack one of the parties, discover a closing, and step in at the last minute with fake wire instructions. In the rush of last-minute closing items, someone forgot to confirm the information. By the time the hack is discovered, it is usually too late. However, this should never happen, as long as a title company and other parties follow proper procedures.
Some items to remember to protect yourself:
- Do not trust emails with wire information or financial details. This is true even if it appears to be encrypted.
- Do not click on links in these emails.
- Do not share vital financial details via email.
What can you do?
All parties in a real estate transaction MUST verbally confirm wire instructions. Buyers need to verbally confirm in order for their cash to close. Real estate agents need to verbally confirm for deposits. Sellers need to verbally confirm for their sales proceeds. And title agents need to verbally confirm with sellers before wiring out proceeds. This last part is very important. A title company should NEVER wire unless wire instructions are verbally confirmed.
Here at Lighthouse Title, that is rule #1. It is on all our checklists numerous times to confirm wire instructions verbally. To make this clear to all parties, all of our emails specifically state:
Lastly, if you find out that you are a victim of the above situation, discovering the problem quickly increases your chances of recovering the money. Do not wait. Do not hope you are wrong. Call the title company and call your bank. If the situation is discovered quickly, there is a chance you may be able to stop or recall the wire.
Adam R. Seligman, concentrates his practice in the areas of residential and commercial real estate law for Ward Damon. He also serves as President of Lighthouse Title Services, Inc., owned and operated by Ward Damon, offering quality, expedient settlement services for Florida real estate transactions by experienced real estate attorneys. If you need help with real estate matters or title closings, please contact Adam at firstname.lastname@example.org or call 561-842-3000.