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Real Estate Scam Targets Down Payments

Real Estate Scam Targets Down Payments

April 21, 2017

Real eal estate scams are on the rise again, this time striking the Denver’s hot real estate market.

Police and real estate professionals are warning consumers about this new real estate scam as criminals are targeting buyers to try to steal their down payments and closing costs.

RELATED: How to Spot a Real Estate Scam

“It just makes you cry for some of the things that have happened,” said Kaeti Bancroft, owner of Metro Brokers in Littleton.

She was helping a young couple purchase a home in August. They wanted to pay cash and ended up wiring scammers $360,000.

“They didn’t get the money, but they probably are wearing orange and in prison of some kind. I hope they are,” she said.

Bancroft said the couple had their money sitting in a bank account. After all of the paperwork was completed for the purchase, the title company sent Bancroft the closing instructions and wiring information.

“I looked at them. I read them through and everything looked normal, so I just forwarded them over to my buyer,” Bancroft said.

She said many title companies require wire transfers instead of cashier’s checks when closing on a house. According to Bancroft, it has become standard practice to email the instructions before the closing date.

However, the real estate scam artists somehow got ahold of the email and changed the account number to their bank account instead.

“They had the same letter head and the same salutations on the bottom, but they had changed the inside main part of this email to say, send it to this bank, this routing number, this account number,” she said.

There were no red flags throughout the transaction, until the title company never received the money.

“I truly did not know if we would get that money back,” Bancroft said. “I mean, it’s gone. What would happen is they would be out $360,000?”

Luckily, when the buyers alerted the bank’s fraud department, the money was still in the scammer’s account. They froze the account and the couple eventually got their money back.

“It was just scary for everybody,” Bancroft said.

RELATED: Real Estate Agent Jailed Over Fraud

Similar scams are happening throughout Colorado and across the country. Investigators believe criminals are hacking into real estate agents’ email accounts and monitoring their communications with title companies, lenders and clients.

So far, they seem to be targeting sales involving large amounts of cash. But there is a way for buyers to beat it.

“I am asking them to personally go into the bank and have that banker call and talk to the title company.” Bancroft said.

If you receive an email asking you to wire money or send other personal information, do not follow the instructions. If you are unsure, call the company or financial institution to verify it is legitimate.

Do not use the phone number listed in the email. Search the internet or the phone book to find the correct phone number.


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