Real Estate Fraud Is Rising: Red Flags Every Agent Should Recognize

Real estate agents are trained to spot problems with a property, a contract and sometimes even a difficult client. Today, agents must also learn to recognize something far less visible: cybercriminals attempting to steal the money—or even the property—in a real estate transaction.   This is one of the concerns that has lead to new reporting requirements.

The FBI’s latest Internet Crime Complaint Center report shows how serious the problem has become. During 2025, the FBI received 12,368 complaints involving real estate fraud, with reported losses exceeding $275 million. That represents a substantial increase from 2024, when 9,359 complaints resulted in approximately $173.6 million in reported losses.

Why Real Estate Transactions Attract Criminals

Real estate transactions are especially appealing to cybercriminals because they involve large sums of money, numerous participants and frequent electronic communications. A typical transaction may include buyers, sellers, real estate agents, lenders, attorneys, escrow officers, title companies and other professionals. Emails and documents move quickly between these participants, often while everyone is working toward a closing deadline.

Criminals Exploit That Combination of Money, Urgency and Communication

In a common wire-fraud scheme, a criminal gains access to an email account belonging to someone involved in the transaction. The criminal may silently monitor the correspondence for days or weeks. Shortly before money is due, the criminal sends an email that appears to come from a trusted participant and provides fraudulent wiring instructions. The message may contain the correct names, property address, closing date and company logo. The email address may differ from the legitimate address by only one letter or number. Once the victim sends the money, it may be transferred through multiple accounts and become extremely difficult to recover.

The Agent’s Role in Prevention

A real estate agent is not expected to become a cybersecurity expert. Nevertheless, agents are often the primary point of contact for buyers and sellers. Clients may reasonably look to their agent for guidance about how the transaction will proceed and how money will be transferred. Moreover, agents have a duty to exercise reasonable skill and care.  NRS 645.252(2).  As a result, the National Association of REALTORS® has emphasized that agents should educate clients early, explain the transfer-of-funds process and establish verification procedures before money is due. NAR also recommends that clients confirm wiring instructions by calling a known and trusted telephone number—not a number supplied in the email containing the instructions.

Simply placing a warning at the bottom of an email may not be enough. Agents should discuss the risk directly with the client and repeat the warning as closing approaches.

Red Flags Involving Wiring Instructions

Agents and their clients should immediately question any communication that:

• Changes previously issued wiring instructions.
• Creates unusual urgency or demands immediate payment.
• Directs funds to a different bank or account.
• Changes the required method of payment.
• Instructs the recipient not to contact another participant.
• Arrives from an unfamiliar or slightly altered email address.
• Contains wording, grammar or a tone that seems inconsistent with the sender’s normal communications.
• Requests that the parties communicate only by email or text.

A last-minute change does not necessarily mean fraud is occurring. It does mean the transaction should pause until the instructions have been independently verified. The telephone number used for verification should come from a trusted source, such as an original engagement letter, previously verified contact information or an independently located company number. Clients should never call the number contained in the suspicious message itself.

The Growing Problem of Fake Sellers

Wire fraud is not the only danger. Criminals are also impersonating property owners and attempting to sell property they do not own. Vacant land, investment property and property owned free and clear may be especially attractive targets. A criminal can obtain the owner’s name and property information from public records and then contact an agent while pretending to be the owner. The NAR has identified several warning signs associated with seller-impersonation schemes:

• The purported seller wants to list vacant property for substantially less than its fair market value.
• The seller is unusually eager to complete a quick cash sale.
• The seller refuses to meet in person or participate in a video conference.
• All communication occurs electronically.
• The seller claims to be outside the state or outside the country.
• The seller insists on a remote closing.
• The seller wants to select or provide the remote notary.
• The seller appears unfamiliar with facts about the property that a real owner should know.

An agent should not ignore these warning signs merely because the listing appears easy to sell. A transaction that seems “too good to be true” may be exactly that.

Verify the Seller, Not Just the Property

Agents dealing with vacant land, absentee owners or unfamiliar sellers should consider additional identity-verification procedures. Depending upon brokerage policies and the circumstances, those procedures may include:

• Requesting more than one form of identification.
• Comparing the identification with information in public records.
• requesting documentation showing the seller’s connection to the property.
• Conducting a live video meeting.
• Asking questions about the property that cannot easily be answered through an online search.
• Sending correspondence to the owner’s address of record.
• Independently locating and contacting the owner through previously established information.
• Alerting the title or escrow company when identity concerns arise.
• Allowing the title company—not the purported seller—to select and verify the notary.

NAR has also suggested obtaining a voided check and a written disbursement authorization before transferring sale proceeds. No single procedure will prevent every fraud. The goal is to make it much more difficult for an imposter to complete the transaction without being detected.

Slow Down When Something Changes

Fraudsters depend upon urgency. They want the victim to act before asking questions. A message may say that the closing will be delayed, the client will lose the property or additional fees will be imposed unless the money is sent immediately. Those statements are intended to discourage verification.

Agents should give clients permission to slow the transaction down. A brief delay is far better than the loss of a down payment, closing proceeds or mortgage payoff funds. Clients should be told in advance that no legitimate participant should object when you independently verify wiring instructions before sending money.

What to Do When Fraud Is Suspected

Time is critical after a fraudulent wire transfer. The victim should immediately contact the sending bank and request that the transfer be recalled or frozen. The title company, escrow holder, attorney and other appropriate participants should also be notified.

A complaint should be filed promptly with the FBI’s Internet Crime Complaint Center. The FBI’s Recovery Asset Team may be able to work with financial institutions to freeze funds, but the likelihood of recovery generally decreases as time passes. In one example reported by the FBI, rapid reporting helped authorities freeze a fraudulent transfer of more than $449,000 while the money remained in the receiving account.

Agents should also follow their brokerage’s incident-response procedures and preserve relevant emails, text messages, wiring instructions, telephone records and transaction documents.

Protecting the Client Also Protects the Agent

Agents may view fraud prevention as primarily the responsibility of banks, title companies or closing attorneys. Those professionals certainly have important responsibilities, but agents are in a unique position to identify warning signs and educate clients. A buyer may complete only a few real estate transactions during a lifetime. An experienced agent may participate in dozens each year. Clients therefore expect the agent to recognize when something about the transaction is unusual.

Agents do not need to guarantee that fraud will never occur. They should, however, establish expectations, warn clients about known risks and respond appropriately when red flags appear. The most valuable advice may also be the simplest: Don’t allow urgency, convenience or the excitement of closing to replace independent verification.

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Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.