The home selling and buying process involves large sums of money. A professional escrow company holds the funds and documents. This is why you need a neutral third party when buying a home. Once both parties meet the terms of the contract, the sale gets finalized. The agent and escrow company have many tools to help buyers stop wire fraud.
As home buyers, your clients are responsible for many things. They must make sure that both the down payment and full payment get paid to the escrow account by a specified date. While this may seem like an easy thing to do, there are risks they need to be aware of.
Wires Have Delays, Too
According to The Balance, wires are an electronic way of sending money. Many people expect the bank to transfer the funds that instant. But this isn’t always the case. A wire might first need to go to a corresponding financial institution. It also may need approval before receipt. Also, some banks only schedule wires at specific times of the day. That means your clients could miss the cutoff time for the funds to hit the account. This could place their property transaction in jeopardy.
Ask your client to contact the bank and ask how long it will take to transfer the funds. Receiving payment on time is critical to the transaction. Your client will then know whether they need to factor in an extra day or weekend before the cutoff time.
Widespread Wire Fraud in Real-Estate Transactions
Unfortunately, in an era where cybercrime is on the rise. There is an increase in cybercriminals targeting home buyers. As CNBC reports, they usually start by hacking into real estate agents emails. Next, they look for upcoming real estate transactions. After the hack, they send a fraudulent email message to the potential buyer. The instructions to the buyer include where to send their wire payments. Of course, these payments are to an offshore account.
Did you know that banks don’t provide any guarantee against wire fraud? Also, U.S. Law enforcement doesn’t have any jurisdiction over the matter. Hence, making it impossible for buyers to get their money back. Due to the high sophistication of the scams, there are devastating consequences. People lose hundreds of thousands, sometimes millions of dollars. Leaving them unable to buy their new home. Often wiping out their entire life savings.
There are several precautions your clients can take to protect themselves. They need to ensure they send the funds to the right account. For example, when they receive wire instructions, they should never do the following:
Respond to them by email
Respond to them by a phone number in the email
It is important to verify the source by double checking the account number. Also, they can visit the escrow company’s website. This will likely state all wiring instructions and help stop wire fraud.
Remember, with so much of your client’s money on the line the few extra minutes are worth it. This ensures the payment is, in fact, going to the escrow company. And not a group of cybercriminals in a different country. Would you like to learn more about helping your clients stop wire fraud? Navigating them through the selling and buying process is very important. Get the escrow edge by contacting Escrow Hub today. As part of the Peak Corporate Network, we look forward to leveraging our resources. In turn, this gives you the expertise you need. Hence, allowing the transaction to go through with as few problems as possible.