Real Estate Hackers
are increasingly infiltrating and scamming real estate buyers, sellers, agents, lawyers, and lenders. As we all know, in this day and age most communication occurs digitally – real estate transactions are no exception. Because of this, cyber-criminals are increasingly targeting real estate customers and professionals to fraudulently route legitimate real estate financial transactions to their own bank accounts. Today, it is more important than ever to educate yourself about these real estate hackers scams, how to spot them, and what to do if you accidentally fall for one.
To start, allow me to illustrate a real estate hacking scenario that is becoming all too common:
The Real Estate Hackers Ideal Scenario
Pretend you are a buyer looking for a new home.
You have a real estate agent that is regularly previewing and sending listings to you that match your buying criteria. During this process, you get really excited about one of the listings. It is your ideal home. Quickly, you email your agent to instruct her to put together an offer for the house.
After a few rounds of offer and counter-offer, the deal seems dead in the water simply because the selling party isn’t willing accept all the terms you need to make the sale work.
Disappointed, you and your agent agree to resume the search for the next home that catches your eye.
An Urgent Deal. Immediate Action Required.
The next morning you wake-up to a new email in your inbox. The email is from your agent and it is titled “URGENT: Seller reconsidered offer!“. You open the email and it reads:
I got a call from the selling agent late last night informing me that the sellers have reconsidered our final offer. They are willing to sell for $200,000 and need $10,000 in earnest money to secure the offer. They’ve given us until 3pm today to decide. We need to act quickly before the seller reconsiders. Let me know if you want to proceed.
Even though you think the earnest money seems high, you are ecstatic! Since after all, this is the house you really wanted. You immediately reply to the agent email and say, “Yes! Let’s do it!!!”
Within a few minutes, your agent replies:
Great! The sellers have provided us with the bank wire information – please wire $10,000 per the attached instructions. We need to be quick so we don’t lose out.
As a result, you frantically coordinate the financial wire from your bank to the account listed in the email attachment. Finally after completing the wire, you email your agent to let her know you’ve completed the transaction, and to ask what the next steps will be.
You wait for a response.
Eventually, you become too frustrated with waiting for an email response and call your agent. You ask your agent if the sellers received the $10,000 wire yet. Your agent says, “I have no idea what you are talking about”.
It’s only at this point that you realize something is terribly wrong. Someone has been impersonating your agent, and you just wired money to an unknown account.
Hackers Not Just Targeting Agents
While the above scenario illustrates what the hack and scam looks like between an agent and their buyer, near identical situations are occurring between:
- Lenders and buyers
- Real estate attorneys and agents
- A selling agent and buying agent
- Builders and agents
Real estate hackers target anyone in real estate involved with financial transactions. From California to New York, hacking scams are occurring at an increasing rate.
How The Hacker’s Scam Works
Hacking incidents usually start with “spear phishing” – an email campaign that attempts to trick targets, like agents, and lenders, into giving their account passwords to the hacker. Despite the digital technique, the hacker eventually gains access to a target’s network and emails.
At that point, it is a waiting game. The hacker will monitor email correspondence until they see an opportunity like we outlined in our scenario above. Next, the hacker will initiate communication with the victim, impersonating their hacked target, and ultimately instructing the victim to wire money to the hackers bank account.
How To Identify Real Estate Hackers
Sophisticated hacking techniques might seem overwhelming, but there are number of common sense indicators that will help keep you from falling for these scams:
- Inconsistent Financial Requests: Inconsistent or abnormally high requests for money are a red flag. Remember, most earnest money deposits are typically 1-2% of the home price.
- Urgency and Persistence: Scammers will try to create a sense of urgency to send money, and will be very persistent.
- Account Swapping: If you receive financial account information for bank wiring but then quickly receive an update or revised bank account, you might be dealing with a hacker.
- Typos and Changes in Communication Style: A lot of hackers (but not all) are from outside the U.S. Keep an eye out for grammatical errors, or British spellings such as “colour” vs “color”. Also, if you are familiar with the senders writing style, you might notice a sudden difference in word usage and punctuation styles.
- Lack of Knowledge About You or Past History: The hacker will only know about what’s available in email. If responses to you seem vague or lacking insight based on non-email history, you might be dealing with a hacker.
- Avoiding Telephone or In-person Meetings: A hacker will obviously not have the ability to speak or meet with you, since the scam is to infiltrate and impersonate someone you already trust. A meeting or phone conversation would blow their cover.
If you are even remotely suspicious that you are emailing an account compromised by hackers, stop email communication, pick up your phone and call the other party. If the communication is legitimate, they can quickly confirm that for you.
What To Do If You Are a Victim of Real Estate Hackers
Act immediately. The faster you respond, the better.
- Call your bank and request to be connected to their fraud division. Explain the situation and have them try to stop the wire.
- Call the party the hacker compromised. Chances are the hacker is still in their account and looking for more victims.
- This is fraud combined with computer intrusion and it’s a crime! File a complaint with the FBI’s Internet Crime Complaint Center.
- You can also report the scam to the FTC Complaint Assistant.