When you’re in the process of buying a home, you may be instructed to wire the final closing funds to the title company. This could be your down payment and closing fees or, if you’re buying a home with cash, the entire purchase price. Make sure you know and trust your title company.

The real estate closing scam is an interesting example of where lower-tech option, in this case, a paper check, would be more secure than a bank wire. Because it’s the wiring process that makes this scam possible.

Hackers will contact the buyer very shortly before the deadline to wire the money and tell you to send the money to a different bank account. Of course, the communication will be disguised as the legitimate title company you’ve been in communication with, so most victims never suspect a thing until their money is gone. These criminals rely on trust. They know you trust your real estate agent, your lawyer or the bank and they exploit that trust to steal from you. With everything done online these days, it’s becoming easier for hackers to leave you broke and hopeless.

How to protect yourself?

1.   Before you wire your money, call the title company and have them tell you the routing/account numbers to make sure they match.

2.   Complete the whole process in person. It may take more effort, but it’ll be worth it.

3.   If you’re purchasing a home outside your current area, you can ask the title company to overnight the wire instructions to take extra precautions.

4.   Use an encrypted email server and find an escrow agent and real estate agent who does.

The agents and title companies that are taking this scam the most seriously are the ones you want to be working with. They’re also more likely to help you out if the worst happens and you fall victim to the scam (although you shouldn’t if you’re working with them).

Wire fraud is scary, but with the right steps it’s easy to avoid. Even though technology has made everything a lot easier, sometimes it’s best to go the old-fashioned way and call or bring checks to the bank in person. Closing on a home is one of those instances.