Just imagine it:  You wire your money to the title company as instructed the day before you buy your dream home.  You show up to closing, and they ask you, "Where's your down payment?"  You think this must be some kind of silly joke, so you say, "You mean the massive wire I sent you yesterday wasn't enough?"

"Wire?  I checked a few minutes ago, and we didn't receive a wire from you, but I'll go double check."  The serious look on the escrow agent's face tells you this isn't a joke.

"Yes," you say, "I sent it to the updated account you asked me to use via email yesterday."

"... I didn't send you any updated wire instructions yesterday."

After a few eternal minutes of double checking both on your end and on the title company's end, it's clear that you did indeed send the down payment, but you did not send it to the title company.  Instead, you sent it to an overseas thief who has now disappeared with your money.  How could this happen?

This has been a growing problem in the real estate industry that was highlighted by ABC news station KOMO in Seattle.

1. The scammers first target real estate agents and attempt to gain access to their email accounts.  Agents are great targets because their email addresses are readily available online, and there's a very high likelihood that if an agent gets an email from someone that says, "I'm interested in hiring you to represent me in the purchase of a home, please click this link for listing details", they're probably going to click on it.  The problem is, clicking on the link gives the scammers control of the agent's email account.
2. They then monitor the traffic in the account by checking it regularly or setting up a rule to automatically forward a copy of every email to a different account controlled by the scammer. (When was the last time you checked your auto-forward settings?)
3. With the information that passes back and forth on their deals, the scammers can construct a pretty clear picture of the transaction:  When it is taking place, how much money the buyer is bringing to the table, and what title company is being used in the transaction.
4. Armed with these details, the scammers, posing as the title agent, send an email to the buyer the day before the transaction is supposed to close, providing them with a new account to which they should send the money.  The email looks legitimate because it contains all the details of their transaction, so many people act on them, unwittingly sending their down payment money to overseas thieves.

What can you do to prevent this?

As an agent:

• Don't click on links or open attachments from unknown sources.
• Change your email password regularly
• Check your email forwarding settings regularly

As a consumer:

• Bring your funds to closing with a Cashier's Check OR
• (Here's a little tough love for you) Before you send a wire, pick up the damn phone and call the title company to verify that you have the correct information.
• Never, EVER act on "updated wiring instructions" without confirming via a PHONE CALL.

Don't get screwed, friends!