Cybercrime: The Evolution of Real Estate Wire Fraud
Cybercrime within the real estate sector reached unprecedented levels last year, as reported in the 2025 edition of the FBI’s annual IC3 report. The report indicated over 12,000 complaints related to real estate, with total losses amounting to $275 million, an increase from approximately $174 million in 2024 and $145 million in 2023.
During the latest Broker Power Hour hosted by the National Association of Realtors (NAR), brokers received valuable advice on how to safeguard themselves against real estate wire fraud attempts, where malicious actors seek to redirect funds from real estate transactions into their own accounts.
Tyler Adams, Co-Founder and CEO of CertifID, who spoke at the session, stated that no one is exempt from these threats. He noted that artificial intelligence has transformed the landscape of fraud.
“It has empowered fraudsters to carry out attacks on an unprecedented scale,” he said.
Adams also stressed the importance of educating clients early in the transaction process about the risks of fraud to mitigate potential losses.
New NAR data further revealed what brokers who are members of NAR learned during the complimentary session about enhancing transaction security, recognizing fraud risks, and protecting both their brokerage and clients.
What is Real Estate Wire Fraud?
Today, most individuals are aware of the fundamental aspects of wire fraud scams. Fraudsters target real estate professionals, title and escrow companies, lawyers, lenders, and consumers—essentially anyone engaged in a transaction—by sending phishing emails. Through these deceptive tactics, criminals either steal credentials or gain access to email accounts via malware that their victims inadvertently install. These would-be thieves gather information about deals and upcoming transactions, including the contact details of all parties involved.
By tracking conversations through malware or observing property status changes to ‘pending’ on real estate websites, they can ascertain when funds are about to be transferred. At that moment, they impersonate individuals involved in the transaction, issuing fraudulent instructions to reroute the funds. If they succeed, they abscond with earnest money, closing funds, commissions, down payments, or proceeds from sellers or loans.
Scammers have a history of forging identification documents and property deeds, as well as spoofing phone numbers and email addresses. Recently, they have begun to clone voices utilizing generative AI tools. By uploading brief audio clips sourced from the internet to an AI voice generator, they can create dialogue through the text-to-speech functionality. Utilizing VoIP services, they are able to direct calls directly to voicemail, as fraudulent activities are more apparent during live conversations.
At times, fraudsters pose as “sellers,” frequently focusing on lien-free vacant properties. They may engage a real estate agent to act on their behalf or advertise properties for sale or rent at prices significantly lower than the market rate. These scammers obtain sale proceeds from unsuspecting buyers or collect deposits from potential buyers or renters. To identify this form of fraud, agents are advised to adhere to the “two-flag rule,” according to Adams.
“If you notice one of the following indicators, proceed with caution. If you observe two or more, take a moment to verify the identity,” he said.
The “two-flag rule” includes:
- Sellers are evasive and prefer remote interactions
- Sellers request a cash closing
- Sellers have a sense of urgency
“The longer they’re in the deal, the more likely they are to get caught, so they try to push everybody to get it done fast,” Adams said.
As soon as funds are withdrawn from an account, it is crucial to act swiftly, according to Adams. The FBI also recommends that you first contact your bank. Request that they attempt to recall the funds and notify the receiving institution. Adams further suggested that it may be more effective to begin with the receiving bank. Regardless of the approach, he emphasizes the importance of acting with great urgency.
“This is not a scenario where you can wait,” Adams said.
Real estate wire fraud resembles a “cat-and-mouse game,” according to NAR. However, experts suggest that it is the duty of brokers to stay informed about the tactics employed by scammers and to communicate this information with their teams and clients.
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