Protecting Your Clients and Your Business From Fraud

Real estate fraud is becoming more common, more sophisticated, and harder to spot, and AI is making it worse. Whether the scheme involves wire fraud, seller impersonation, title fraud, rental scams, identity theft, or deepfakes, most fraud follows the same pattern: someone pretends to be someone they are not.

This resource explains why real estate professionals are frequent targets and gives practical steps to help you prevent, detect, and report fraud.

Why Real Estate Professionals Matter

Real estate transactions have what fraudsters look for: large sums of money, tight deadlines, multiple participants, and constant electronic communication. Publicly available property records also make transactions easy to identify and target.

Real estate professionals are often the central point of contact among buyers, sellers, lenders, title companies, attorneys, and other parties. When something seems suspicious or fraud occurs, clients often turn to you first.

While legal obligations vary by state and role, consistent verification, secure communications, client education, and prompt reporting can help reduce the risk.

Fraud Topics

Wire Fraud

Identity Theft

Anti-Money Laundering and Counter Terrorist Financing

Mortgage Fraud

Coming soon:

Title Fraud

Cryptocurrency Scam

Investment Fraud

AI & Deepfake Impersonation

Rental & Listing Scams

Cybercrime

Where You Are Vulnerable to Fraud

Fraud can happen at any stage of a transaction: before listing, during the transaction, at closing, and even after closing. Criminals take advantage of electronic communications and the trust between transaction participants to steal money, get sensitive information, or break into accounts. Here are four things every real estate professional should know:

1. Real Estate Fraud Is Increasing

According to the FBI, real estate fraud is becoming more sophisticated, technology-driven, and targeted. Criminals use stolen credentials, compromised email accounts, spoofed phone numbers, forged documents, and AI-generated content to impersonate trusted parties in a transaction. A recent FBI reportpdf found that individuals lost $275 million to real estate-related fraud in 2025.

2. Fraud Increasingly Relies on Impersonation

Fraudsters pose as someone you trust, such as a buyer, seller, property owner, lender, title professional, attorney, or broker. Their goal is usually to steal money, get sensitive information, access accounts, or redirect funds. Often they do this by pressuring someone to act before there is time to verify.

3. Business Email Compromise (BEC) Remains a Major Threat

In one of the most common schemes, criminals gain access to, or closely imitate, a legitimate email account. They use it to monitor communications, request information, or send fraudulent wire instructions. Real estate is an attractive target because large sums change hands electronically, often under tight and predictable deadlines.

4. AI Makes Impersonation More Convincing

Fraudsters can clone a real estate professional's voice from publicly available audio, spoof a trusted phone number, or create realistic fake documents. As these tools improve, it is harder to know whether the person on the other end of an email, text, phone call, social media message, or video call is who they claim to be. A familiar voice, caller ID, email address, or text message is not proof of identity.

How to Use This Resource

This resource is organized around three steps. Start with the one that fits your situation, or go through all three.

1. Prevent

The Best Fraud Loss Is the One That Never Occurs

Many fraud schemes depend on impersonation, urgency, and pressure.

Fraudsters often create a sense of emergency, claim a deadline is approaching, insist that action is required immediately, or offer incentives that seem unusually favorable. Their goal is to prevent someone from slowing down long enough to disrupt the fraud by applying critical thinking and common sense to the situation.

Verify Before You Trust

Many real estate fraud schemes succeed because participants rely on a single communication channel.

Before acting on:

New wiring or money-transfer instructions,
Payment requests,
Identity documents,
Ownership claims,
Closing instructions,
Cryptocurrency wallet information, or
Unusual transaction instructions,

verify the request using a trusted phone number or contact method obtained independently from the email, text message, or document in question.

The FBI specifically recommends using secondary communication channels to verify wire or money-transfer instructions and changes to account information.

Many BEC and real estate wire fraud schemes rely on spoofed or compromised communications.

Transactions That May Merit Additional Verification

Additional verification procedures may be appropriate when:

Vacant or unoccupied property is being sold.
The owner lives outside the state.
The property is offered below market value, or the seller appears unusually eager to accept an offer.
A new seller lead refuses to meet, participate in a live video call, or complete reasonable identity-verification procedures.
A participant insists that the transaction be completed remotely or communicates only through email or text.
A seller creates unusual pressure to list, sell, or close quickly.
Cryptocurrency or an unusually large cash transaction is involved.
Wire or money-transfer instructions change unexpectedly.
Communications seem unusual or inconsistent with prior interactions.

Prevention Best Practices

Trust Your Instincts

If something sounds too good to be true or does not feel quite right, slow down and verify before proceeding.

Use Independent Verification

Never rely solely on an email or text message when verifying:

Identity
Ownership
Wire or money-transfer instructions
Banking information
Payment requests

Practice Good Cyber Hygiene

Many fraud schemes begin when a criminal gains access to an email account or other communication platform.

Simple protective measures include:

Turn on multifactor authentication (MFA)
Enable automatic software updates
Think before clicking links or attachments
Use strong, unique passwords
Consider using a password manager
Monitor accounts for suspicious activity

The FBI notes that many successful cyberattacks begin with phishing emails and recommends MFA, software updates, careful review of links, and verification of communications before acting.

Prepare Your Brokerage and
Evaluate Closing Partners

Brokers should establish written procedures for preventing and responding to fraud, train agents and staff on those procedures, and explain fraud risks and money-transfer procedures to clients early in the transaction.

Clients should know that a familiar voice, caller ID, email address, or text message is not proof of identity. Before acting on any communication involving money, account information, identity, or changes to transaction instructions, they should stop and independently verify the request through a trusted contact method.

Before recommending or working with a title company, escrow company, settlement provider, or closing attorney, consider asking:

What technology and procedures do you use to prevent fraud?
How do you verify identities, authority to act, bank-account information, and payment instructions?
How do you communicate wire or money-transfer instructions and changes to clients?
What secure payment options do you offer, and what safeguards apply to each option?
How do you educate clients about fraud?

If suspected fraud occurs, whom should the client or broker contact immediately, and what assistance will you provide?

Closing providers should be able to explain clearly how they protect clients and transactions. If a provider cannot explain its safeguards, consider whether another provider offers stronger procedures consistent with applicable law, client choice, and any settlement-service requirements.

Different closing providers may offer additional payment options beyond a traditional wire or money-transfer. Ask how each available method protects payment instructions, verifies the sending and receiving accounts, confirms receipt, and responds to suspected fraud, including whether certain options provide enhanced fraud-prevention features. Do not assume that a payment method is secure merely because it is electronic.

Brokers should establish and rehearse a fraud-response procedure so agents and staff know whom to contact, what information to preserve, and how to respond if a client reports suspected fraud.

2. Detect

Fraud can occur at any stage of a real estate transaction and often isn't immediately obvious. In many cases, real estate professionals may not know they're dealing with wire fraud, seller impersonation, identity theft, or another scheme—they simply know that something doesn't seem right.

This resource is designed to help you

Identify potential warning signs
Understand the risks they may indicate, and
Take appropriate action to protect your clients and your business.

Step 1: Where Are You in the Transaction?

Step 2: What Are You Seeing That Doesn’t Seem Right?

Within each stage, you'll find common red flags, such as:

A seller who refuses to verify their identity
Documents that don't seem to match
Sudden changes to wire or money-transfer instructions
Suspicious emails or requests for information
Email domains that look slightly off or differ slightly from legitimate addresses
A potential buyer or seller refuses to connect by phone, in person, or via Zoom, but asks if you can use a specific app or messaging platform exclusively to communicate

Step 3: Get Guidance

Each red flag includes:

What you're seeing
What may be happening
Fraud types commonly associated with that red flag
Immediate actions to take
Who to contact
Related NAR resources

You don't need to know what type of fraud you're facing to get started. Simply choose the transaction stage and the red flag that best matches your situation. Below, we provide guidance to help you understand the risks and identify the appropriate next steps.

Before Listing

Red Flag: The Seller Refuses to Meet, Video Chat Or Verify Their Identity

Red Flag: Property Ownership Information Doesn't Make Sense

During Transaction

Red Flag: Client Receives Suspicious Emails Requesting Information

Red Flag: Buyer's Pre-Approval or Pre-Qualification Letter Seems Suspicious

Red Flag: Instructions for Wiring Or Transferring Funds Suddenly Change

Red Flag: Communications Seem Unusual Or Out of Character

Closing

Red Flag: Someone Is Insisting on an Immediate Transfer of Funds

Red Flag: Funds Were Sent But Never Arrived

After Closing

Red Flag: A Property Owner Discovers Unauthorized Title Activity

Red Flag: A Client Is Approached With an Investment Opportunity Related to the Transaction.

3. Report

Report and Respond

If Money Has Already Been Sent

Take the following steps as quickly and, where possible, simultaneously:

Contact the sending financial institution immediately. Ask it to initiate its fraud response procedures and request a recall or reversal of the transfer.
Ask the sending financial institution what information or documentation it needs and whether it can contact the receiving financial institution.
Notify your broker and the title company, escrow company, settlement provider, closing attorney, lender, and other affected transaction participants, as appropriate.
File a detailed complaint with the FBI’s Internet Crime Complaint Center at IC3.gov. Include complete transaction and banking information.
Contact your local FBI field office and other appropriate law enforcement authorities.
File a local police report to help establish a record of the incident.
Preserve emails, texts, voicemail, caller information, payment instructions, account information, transaction records, and a written timeline of what occurred.
Follow the affected financial institutions’ and closing provider’s instructions.
Consider consulting legal counsel, qualified cybersecurity professionals, or a reputable fraud-recovery professional when appropriate.

Speed matters, but recovery is not guaranteed. Brokers should establish and rehearse these procedures before an incident occurs so that agents and staff know whom to contact and what information to preserve.

Document Your Actions

REALTORS® should also:

Follow brokerage procedures.
Maintain records of actions taken.
Preserve communications and supporting documentation.
Cooperate with investigators, title companies, lenders, attorneys, and law enforcement.
Consult brokerage counsel or legal counsel where appropriate.

Remember: Fraud Is Everyone's Responsibility

You do not need to know exactly what type of fraud is occurring before taking action.

If something does not seem right:

Slow down.
Verify.
Document.
Report.

Most fraud losses occur when a transaction participant acts before verifying information. Most fraud prevention begins when someone pauses long enough to ask one more question.

Latest Real Estate Fraud News

Important Notice

This resource provides general fraud-prevention and response information. It does not provide legal, cybersecurity, banking, insurance, or fraud-recovery advice; establish a standard of care; guarantee that fraud will be prevented or detected; or guarantee that transferred funds will be recovered. Laws, professional obligations, available payment methods, and response procedures vary. Real estate professionals should follow applicable law and brokerage procedures and consult their broker, closing provider, financial institution, legal counsel, cybersecurity professionals, law enforcement, or other qualified professionals as appropriate.

Protecting Your Clients and Your Business From Fraud

Prevent. Detect. Report.

Why Real Estate Professionals Matter

Fraud Topics

Where You Are Vulnerable to Fraud

1. Real Estate Fraud Is Increasing

2. Fraud Increasingly Relies on Impersonation

3. Business Email Compromise (BEC) Remains a Major Threat

4. AI Makes Impersonation More Convincing

1Prevent

2Detect

3Report

1. Prevent

The Best Fraud Loss Is the One That Never Occurs

Verify Before You Trust

Transactions That May Merit Additional Verification

Prevention Best Practices

Trust Your Instincts

Use Independent Verification

Practice Good Cyber Hygiene

Prepare Your Brokerage and Evaluate Closing Partners

2. Detect

Step 1: Where Are You in the Transaction?

Before listing

During transaction

Closing

After Closing

Step 2: What Are You Seeing That Doesn’t Seem Right?

Step 3: Get Guidance

IMPORTANT: If You Believe Financial Fraud Has Already Occurred

Before Listing

Red Flag: The Seller Refuses to Meet, Video Chat Or Verify Their Identity

Red Flag: Property Ownership Information Doesn't Make Sense

During Transaction

Red Flag: Client Receives Suspicious Emails Requesting Information

Red Flag: Buyer's Pre-Approval or Pre-Qualification Letter Seems Suspicious

Red Flag: Instructions for Wiring Or Transferring Funds Suddenly Change

Red Flag: Communications Seem Unusual Or Out of Character

Closing

Red Flag: Someone Is Insisting on an Immediate Transfer of Funds

Red Flag: Funds Were Sent But Never Arrived

After Closing

Red Flag: A Property Owner Discovers Unauthorized Title Activity

Red Flag: A Client Is Approached With an Investment Opportunity Related to the Transaction.

3. Report

If You Suspect Fraud

If Money Has Already Been Sent

Document Your Actions

Remember: Fraud Is Everyone's Responsibility

Latest Real Estate Fraud News

Important Notice

1
Prevent

2
Detect

3
Report

Prepare Your Brokerage and
Evaluate Closing Partners