Fraud appears in many different forms across various industries, and unfortunately, real estate is no exception.

A study released by the American Land Title Association and ndp | analytics in 2024 reported that seller impersonation fraud continued to be a growing concern in the real estate industry. In 2023, 28% of title insurance companies experienced at least one seller impersonation fraud attempt. In April 2024 alone, two in 10 title companies experienced attempts. 

Title companies across the country are taking a proactive approach in fraud prevention, according to the report, with 91% of the 783 title companies surveyed saying they currently provide or plan to provide education and resources to train employees on fraud. 

Allison Roth, director of escrow operations at Property Title, said fraud continues to evolve every day, with more hackers recognizing the opportunity for money in the title and escrow space. To combat the risks, her team at Property Title uses the software platform Closinglock to secure closings and streamline the transaction process. 

While there are other similar platforms such as dotloop, Qualia and RamQuest One, they all share the same goal: preventing fraud.

“Tech is in our world whether we want it or not,” Roth said. “With all of the fraud and the claims that are coming up related to fraud and everything, we are just constantly making sure that we are doing everything in our power to use tech to protect ourselves and our customers.”

Roth explained that ClosingLock is used to securely send wire instructions and request e-signatures from buyers, sellers and lenders. The platform also receives completed documents, ensuring that all communications come exclusively from the ClosingLock system — eliminating the risk of fraudulent emails from outside sources. 

What can agents do?

Roth says the No. 1 thing real estate agents can do to prevent fraud in the closing process is to communicate not only with their clients from the start, but with the title company they’re working with. 

Agents are recommended to connect with the title company and learn how wire instructions are sent and who will be sending them. Communicating this information to their clients so they know exactly what to expect is crucial. 

Agents can direct their clients to call the title company themselves to become familiar with the processes and people. Roth said, “Don’t always fall for the emails you’re getting,” because often hackers will send emails that look like they are from a trusted source just to convince the receiver to click on it. 

“We’re all excited for the next deal. That’s our industry, right? And that’s how we’re getting our money,” Roth said. “But we need to make sure we’re protecting all the parties.”

Roth acknowledged that agents contribute a huge piece to the homebuying process, initiating the deal from the beginning and guiding buyers through each step along the way, from home inspections to closing. From the moment a contract is signed, Roth highly suggests agents communicate fraud risks to raise awareness, not fear.

According to the 2024 State of Wire Fraud report released by CertifID, 51% of consumers were not adequately aware of the risks of real estate fraud before closing.

“The agents who are involved in the whole process, I think, are the ones that are doing the best service for their customers and helping their consumers along the way,” Roth said. “I find that those are the best-educated consumers if the real estate agent is involved with the title-company piece and everything.”

These protocols protect not only the clients but also the agents. Hackers are watching the title and escrow world, monitoring when new properties come up and seeing what agents are associated with the property. As hackers have acclimated to the industry, they have learned the language and know timelines of what information is shared and when.

“We work with some amazing agents. In the world of tech, sometimes you got to go backwards a little bit and not be afraid to pick up that phone. We have a lot of agents say, ‘Hey, my customer is going to be buying, how do you guys do this? I just want to make sure.’ Agents are working with so many different companies. I think the ones who aren’t afraid to reach out from the beginning, introduce themselves [help to prevent fraud].”

A helpful resource for agents to learn about prevention strategies and actively stay up to date on current scams is to sign up for newsletters from trusted industry organizations, including the American Land Title Association and Illinois Land Title Association, Roth noted.