Scary Real Estate Scam

There is a new, frightening scam rocking the real estate world right now that you need to know about. Some victims have lost hundreds of thousands of dollars from it. It involves sophisticated cyber criminals using email phishing technology to steal from unsuspecting victims at the time of closing. The great news is that the way to stop this from ever happening to you is so simple. When you hear the solution, you will be dumbfounded by how easy it is. Watch this quick video to learn what this scam is all about and how to avoid it from ever hurting you.

Scary Real Estate Scam: The Scenario

Just imagine you spent the last 10 years of your life saving everything to become a homeowner. You're working two jobs, sacrificed not going on vacation, and not drinking that Starbucks coffee. You've done everything to pinch pennies, so you have enough money to finally become a homeowner. At last you get enough money and go through that process of finding the perfect home.
Months later, you're making offers and going through that whole experience. Eventually you get a deal under contract and it’s the perfect home. Then you go through the process of getting a mortgage, and how awful that can be. They're asking you for all these documents, and they make little sense. If you've ever secured a loan, you know what I mean.

Finally, it's the day before closing. You’re excited but also nervous. You get the email with the wiring instructions, because they no longer allow you to go get a cashier's check from the bank. They require you to wire the money to the closing company, or the title company, or closing attorney, whichever one you're using for your state. So, you follow the instructions and go to the bank. You wire the money, and voila, you think all is good.

The Day of Closing

The next morning, you get up, you're refreshed and excited because you're finally going to get the keys. The phone rings, or you get an email, and they say that the wire hasn't showed up yet. You think, "Well, that's strange. Maybe there's just a slight delay." Nervously, you contact the bank, and the bank says, "No. No, we wired it yesterday. It's no longer in your account. It's out of our system. It's in their system." And you're like, "Huh." So, you call the title company back, and they say, "Well, send me the instructions and where you sent it." You send it over to them immediately.

Then the shock and horror. You discover that you did wire the money correctly, but you wired it to a professional cyber criminal's account. You are the victim of an email phishing scam. What that cyber criminal did was send you an email that looked like it came from your title company or your closing attorney, but it didn't. You sent the money to a different place, and that money never is coming back. It's untraceable. The FBI can't help you. A lawsuit can't help you. It's gone. Not only is it gone, but you're not buying that house.

This is Really Happening

Do I have your attention now? Good. It's happening. A couple in Washington DC just lost a million dollars that way. A family in Florida just lost $77,000 with this, and a gentleman in Oregon lost $123,000. Thankfully, Fidelity National Title hired this man as their national spokesperson to warn people. This scary real estate scam is becoming more rampant, because as these cyber criminals continue to be successful, they're doing more and more of it.

Meanwhile, I've never experienced this problem and I've done literally thousands of wires. I'm both a hard money lender and a real estate investor and I do tons of deals. I literally have special accounts where I pay less per wire because of all the volume and I've never made a mistake. How is that possible?

Don’t Let it Happen to You

Well, that's the good news. The great news is the way you avoid that absolute catastrophe of wiring your money to a criminal's account instead of the title company's account. You simply call the title company and you verify, over the phone, each digit of the wiring instructions. That's it. That's all you need to do.

You might be saying, "That's so simple. Why doesn't everybody do it?" Great question. I looked at a recent study on communications among millennials, and their least used form of communication is that telephone call. They will text,  email,  social media chats, and every other form of communication before they'll get on a phone. So, it might be outside your comfort zone, but if you're about to wire $10,000, or $50,000, or $100,000, or $300,000, pick up the phone and verify the wiring instructions.

Make Sure You Do It Right

When people are buying a house, this is what I recommend they do. If they're going to be wiring at the bank, go to the bank, coordinate and make sure that title agent's going to be available, call them up, put them on three-way or put them on speaker phone while you're there with the banker, and make sure that the wiring instructions are absolutely perfect. It's worth the extra three minutes to do it right, because if you do it wrong, you're potentially not getting it back.

I hope I've not only scared you but also inspired you with this public service announcement on this scary real estate scam that is continuing to proliferate. However, all you need to do to stop it is to make sure you verify your wiring instructions with the title company over the phone. Make sure you're talking to the right title company too.

I like to share wisdom with you so that you can be on the know of what's going on in the real estate world. While we're on this topic of negativity, I wrote a book called Real Estate Investing Gone Bad. It's a series of stories of what you can learn, and what not to do in real estate. I have a great video that talks more about this as well.


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  1. Nelson Abrahante says

    Thank you very much on your words of wisdom and most importantly, common sense on the “Scary Real Estate Scam”.
    And, as you say “communication” is the key!!!
    Once again, thank you in advance👌👍☺

  2. Bart S Corrie Sr says

    Phill, great stuff and content as always. I always look forward to listening to what you have to say.

  3. Delores Dacres says

    Thank for informing us of this scam. I never would have thought of checking out transfer information before sending the money to the title company.

  4. William Powers says

    This happen to one of our clients. $235,821 gone. Fortunately the title company accepted reasonability for the loss and covered it after 2 months of review.

  5. Bartholomew says

    Great video

  6. Karyn McDonald says

    Another easy fix for this is for the banks to have a 3-day hold on any real estate related wire transfer. It should not be instantaneous and irrevocable.

  7. Precisely.
    God Bless America!

  8. Interesting

  9. This scam is happening in the UK too. Quite a few people have lost huge amounts of money. Great advice as always Phil. Many thanks.

  10. Sharon King says

    Comment to Mike who doesn’t own R.E. because he doesn’t like Property Taxes….Mike, the Prop. taxes cover specific Community Amenities such as Schools, Road Maintenance, Local Police Services, etc. Apt. Building Owners pay the cost for each of the Tenants which is Tax Deductible for the Owner, but not so for the Tenant who pays Rent which theoretically covers the property tax bill proportionately via the Units Rental Income. So YOUR philosophy keeps you enslaved by Tenant responsibilities to the Buildings Owner. 😁The Owner gets his mortgage paid, which over time, becomes Equity ( cash) and gets to pay little or no income tax on his Rental Income because of his Tax Deductibles Advantage…So which one would YOU REALLY RATHER BE? The slave Tenant? Or the Cash Rich Landlord???😶???

  11. What a great guru within its own rights … generous speaker whom provide audiences with free ebook to start with and unlike many speakers just selling a product per se!

  12. Toni Kelly says

    What a terrible thing to happen !! Thank you Phil, for the warning !!!

  13. Mary Stead says

    I had not heard of this, so thank you so much. Someone should shout it from the rooftops!!!

  14. Thank you so much Phil! Just passed this information on to some friends who are on the cusp of purchasing a home.

    Wonder if Zander or Lifelock would cover this lost money?

  15. Good comments and proper procedures to verify with Title Company or Closing Attorney.

    This has been happening for a few years now but still a potential problem.

    Good job!

  16. Kayton place group says,
    Thank You Phil,that information is so extremely important. but then everything you say is important!
    Thanks again.

    PS;Mike is absolutely right also about “Owning” out right in _most Estates.I believe there is a way out of that,with a lot of
    paper work but I’m not qualify to explain it. yes would love your thoughts on that. By the way we do ‘own” RE for quite a while and if you do not pay your taxes(rent),you get evicted, (foreclose on). Very good point Mike.

  17. John Washington says

    Thanks for taking the time out to talk about how to become a real estate investor thank you so much,

  18. Hi Phil,

    As always, thank you for all that you do! Great piece of information. Thanks a bunch!

    TO THE VIEWERS THAT NO ONE CAN OWN PROPERTY IN THE united states because of the take over in 1871 of the CORPORATE UNITED STATES AS THE SOUTHERN STATES LOST THE WAR FOR STATES RIGHTS and hence also the right to own property……….if we in any state fail to pay property tax on our so called property we are evicted….so whats with the think of being a property owner….it does not exist……….i do own a simple hammer and tools…..and pay a sales tax only one time on that item but not so with any real estate purchase….which is currently a forever RENTAL PAYMENT UNTIL DEATH OF THE CURRENT LEGAL ENTITY….your thoughts????????????????????????????

  20. I’ve closed on four properties. My lawyer doesn’t take or send wires, ever, because of this. He knows clients who have lost tens of thousands on this scam. The fix is just what Phil said: call and verify the wire instructions. Wire transfers are instantaneous and generally irreversible.

  21. if they will not take a check no deal

  22. Moses Velasquez says

    Thank you very. This is right on time because I am planning on buying a house.

  23. Alice Hoagland says

    Thanks for your sage advice, Phil. As a member of the Baby Boomer generation, I have no fear of picking up the phone and making the call to the title company, attorney or other legitimate receiving party and verifying the wiring instructions digit by digit. I learn a great deal from many of your videos. Appreciate your “public service announcement.”

  24. Catherine T Murray says

    I was just on the phone with my new attorney asking him about legal questions. He was very helpful then I saw your email and I am not surprised about the scam thank you thank you thank you

  25. Jose Gonzalez says

    Phil, you are among the nicest people in the world to offer SO MUCH valuable REAL WORLD advice to your viewers. I’ve watched quite a few of your videos and I must say, you are one of a kind.. a true life saver. May God bless you always.

  26. Nhu Finney says

    Wow. Thank you so much for sharing. You make this world better.

  27. Armando Perez says

    Hi Phil
    This is so true.It did not happen to me but I new about it at the title closing last month.They did not accepted my WT instruction and that was the reason.There was necessary couple phone call and after that deal was closed.
    Thank you to let me know.

  28. Cherie Tormey says

    Thanks Phil! Cyber crime is the new criminal frontier….

  29. Homer L McKenzie says

    Phil ,

    I am a Los Angeles CA based loan broker for Personal, Hard Money and Residential Purchase loans and I just wanted to say the (Thank you) seems hardly adequate for this irreplaceable pearl of wisdom.

    I am in your debt sir.

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