Wire Fraud in California Real Estate: How to Protect Your Closing Funds

One of the questions I get near closing, from both buyers and sellers, is some version of: how do I know this money is going to the right place?

It is a good question and worth asking directly. Real estate wire fraud is a real problem in California. It targets exactly the kind of transaction most people only do once or twice in a lifetime. This article explains how it works, what to do before you send any funds, and what to do if something goes wrong.

It starts when a criminal gets access to the email chain between you, your agent, your lender, and your escrow or title company. This is usually done through a phishing attack on one of those parties. The criminal gets in and waits. They monitor the correspondence until they can see that a wire transfer is approaching.

Then they send you an email. The email looks exactly like every other email you have gotten from your title company. Same logo. Similar domain name, sometimes just one character off. Sometimes even the same email thread you have been reading for weeks.

The email says wiring instructions have changed. Here is the updated account. Please send your funds there instead.

You follow the instructions. The money moves. By the time anyone realizes it went to the wrong account, it has often already been transferred again. Recovery is possible but not certain, and the window to act is short.

Buyers are the most common target because they are wiring large sums at a predictable moment in the transaction. Sellers can be targeted at the moment their proceeds are disbursed. Both situations are at risk.

Before wiring any money, call your escrow officer or title company directly. Use a phone number from the original paperwork or the company's main website. Not the number in any email. Not a number from a quick search you have not verified. The main number you have had since the transaction started.

Tell them you are about to wire funds and want to verbally confirm the account number and routing number before you send anything.

That call takes five minutes. If the information in the email matches what the person on the phone gives you, proceed. If the person on the phone does not recognize the email you are describing or the account number you are reading to them, stop. Call your agent immediately. Do not wire anything until you understand what happened.

This single step, verbal confirmation through a verified phone number, stops most wire fraud attempts. The fraud succeeds because buyers and sellers trusted an email they should have verified first.

Be suspicious of any communication that:

• Says wiring instructions have changed, especially in the final days before closing.
• Comes from a domain that is slightly different from the ones you have been receiving: an extra letter, a number substituted for a letter, a subtle variation in the company name.
• Creates urgency: wire today or the closing will be delayed, or you must act before a deadline.
• Asks for funds to go to a personal bank account or an institution you have not seen before in this transaction.
• Asks you to confirm by replying to the email rather than calling to verify.

Title companies and escrow offices do not change wiring instructions at the last minute for legitimate reasons. When you see that request, treat it as suspicious until a person at the company confirms it verbally through a verified number.

Sellers face risk at disbursement, which is when the title company wires your net proceeds to your designated account after closing. Before you get to closing, confirm your account information with your escrow officer by phone, not just by email. If you have any doubt about the account number on file, call and verify it directly.

If someone sends you an email near closing that asks you to update the account where your proceeds will be sent, call your escrow company immediately. Do not change account instructions based on email alone, even if the email appears to come from someone you have been working with throughout the transaction.

Call your bank immediately. Tell them you believe you have been a victim of wire fraud and ask them to initiate a recall of the wire. Banks can sometimes recover funds if they move quickly, but the window is often hours, not days.

File a report at IC3.gov, which is the Internet Crime Complaint Center run by the FBI. Real estate wire fraud involving an electronic transfer is a federal crime. Reporting quickly matters and creates a documented record.

Contact your agent and your escrow officer right away. They may have direct contacts at the banks involved and can help coordinate a recovery effort faster than you could on your own.

Document everything from the start: the fraudulent email, the wiring instructions you received, any communications where the switch was requested. All of it goes to law enforcement and, if needed, to legal counsel.

A careful agent walks every client through wire fraud prevention before the transaction gets anywhere near a wire. It should come up when you first discuss escrow, not at the closing table when you are holding the routing number in your hand.

If your agent has not mentioned it, ask directly: what is your process for verifying wiring instructions? What should I do before I send any funds? A good agent has a clear and specific answer.

Part of what I do under the Concierge Standard is stay close to every step of a transaction, including the moments where things can go sideways. I stay on the same communications, watching the same timeline, and will flag anything that looks off before you act on it. More on what that level of coordination looks like: what full-service listing representation actually means.

For more on how the escrow and closing process works in California, read what escrow is and how it works. If you are a buyer, the guide to buying a home in Westside Los Angeles covers what to expect at each step including closing.

Buying or selling a home is one of the largest financial transactions of most people's lives. It should feel handled, not uncertain. If you want to talk through what a safe, fully coordinated transaction looks like from first call to close, email me. No pressure, just real answers.

The buyers who do well in Playa del Rey are the ones who understood the ground before they started touring. If you want that briefing before you look at anything, let me know. First Key Pacific starts every buyer the same way.