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n today's digital age, wire fraud has become a significant threat in real estate transactions. According to Aniella Gonzalez, general counsel for Home Services of America, wire fraud is prevalent in all business transactions that involve online communication.

    Wire fraud typically occurs when someone diverts funds meant for a seller or borrower during a property closing. Victor Petrescu, a partner at Levine Kellogg Lehman Schneider + Grossman LLP, explains that this can happen through identity theft or by impersonating the buyer or seller. The consequences of wire fraud are severe, causing delays and financial losses.

    If a purchaser pays $1 million for a home and the money is sent to a fraudulent account, it can lead to a significant delay in the transaction process. In some cases, the parties may need to litigate to determine who should bear the cost of the stolen funds. If caught quickly, the delay might be minimal, but if not, it could take months or even years.

    To prevent wire fraud, it's essential to act quickly and take initiative when discovering a fraudulent transaction. Ms. Gonzalez advises alerting local authorities and the receiving bank to place a hold on the funds and request their return. Berkshire Hathaway has implemented measures to assist buyers and sellers in identifying and recovering stolen funds.

    Since 2020, there has been a noticeable increase in wire fraud cases among real estate professionals. Mr. Petrescu attributes this rise to the shift towards remote closings, which have made it easier for scammers to intercept communications and divert funds. To combat this, people should be cautious when receiving wire instructions and verify them through multiple channels.

    Ms. Gonzalez emphasizes the importance of educating agents, buyers, and sellers about wire fraud and taking necessary precautions during real estate transactions. She advises verifying phone numbers independently and not acting on last-minute changes to wire instructions. By being vigilant and taking time to review instructions carefully, individuals can reduce their risk of falling victim to wire fraud.