The Current State of Real Estate Fraud (And How to Protect Yourself)

In a perfect world, buying or selling a home in Massachusetts would be stressful only because someone forgot the pizza on moving day. Unfortunately, today’s real estate landscape carries a different kind of stress: fraud schemes that are becoming more sophisticated, more frequent, and more targeted.

The good news? These schemes are beatable. In fact, most attempts fail — not because the criminals are lazy, but because informed buyers, sellers, lenders, and agents know what to look for and how to respond.

As a closing firm with over 20 years of industry experience, we understand the patterns in how fraudsters operate. Understanding those patterns is the first step toward shutting them down. Whether you’re a buyer preparing for your first closing, a seasoned real estate agent, or a loan officer shepherding deals across the finish line, here’s what you need to know.

1. Wire Fraud: Still the #1 Threat — And Getting Smarter:

Wire fraud remains the most common and most devastating scheme in residential real estate. Criminals impersonate a closing attorney, lender, or real estate agent and send fake wire instructions to divert funds — sometimes hundreds of thousands of dollars — into their own account.

Here’s how it typically unfolds:

• Fraudsters gain access to the email of someone involved in the transaction (often a buyer, agent, lender, or closing attorney).

• They monitor the thread quietly, watching for the moment when wire instructions will be sent.

• Days before closing, they strike by sending updated wiring instructions or creating a fake sense of urgency.

• If the consumer sends funds to the wrong account, the money can be gone within minutes.

Massachusetts is not immune — in fact, New England has seen a noticeable uptick. Fortunately, most fraud attempts are intercepted when buyers and professionals confirm instructions by phone and understand the red flags.

2. Seller Impersonation Fraud: A Fast-Growing New England Problem:

This scheme is affecting Massachusetts and other New England states at an alarming pace, especially where ownership records are easy to access online.

Fraudsters target:

• Vacant land

• Inherited property

• Investment homes

• Properties where the owner lives out of state

The playbook looks like this:

1. Criminal identifies a property with an owner unlikely to be present.

2. They pretend to be the owner and hire a real estate agent to list it.

3. They push for a below-market, all-cash, quick-close transaction.

4. They avoid video calls and supply fake ID documents.

5. If no one challenges them, they could walk away with the sale proceeds while the real owner has no idea what’s happening.

Massachusetts attorneys and real estate agents have become much more vigilant about spotting warning signs. Still, this remains one of the most rapidly growing scams in the region.

3. Payoff & Loan-Fraud Schemes: The Quiet Risk to Sellers:

While buyers often grab the headlines, sellers are being targeted as well — particularly through mortgage payoff fraud.

How it works:

• A criminal impersonates the seller’s lender or servicer.

• They send a fake payoff statement or “updated wire instructions” to the closing attorney.

• If the attorney or agent doesn’t verify directly with the real lender, the payoff funds can be misdirected.

Although fraud involving sellers is not as common, but every bit as financially destructive. Many lenders have strengthened their verification procedures, though no system is foolproof. That’s why reputable closing firms verify payoff details with trusted phone numbers, not email contacts.

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Why These Scams Are Increasing:

Several factors are fueling the rise in fraud across Massachusetts and the broader region:

• Remote closings and digital transactions create more opportunities for impersonation.

• Publicly accessible records make it easier for criminals to gather property information.

• Busy spring and fall markets create pressure and speed — two ingredients fraudsters love.

• Multiple parties on email chains give criminals more potential entry points.

The modern fraudster isn’t the lone hacker in a basement — these are organized groups who understand real estate timing, psychology, and professional workflows.

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Smart Safeguards for Buyers, Sellers, Agents, and LOs:

Fortunately, preventing real estate fraud doesn’t require complicated technology — just good habits, a careful eye, and a reliable team. Here are the safeguards every party to a transaction should practice:

1. Confirm wire instructions by phone every time

Use the number on the attorney’s website — not a number in an email or text. Wire instructions almost never change mid-transaction.

2. Be suspicious of urgency

Language like “right away,” “immediately,” or “this must be done now” is a classic red flag.

3. Never rely solely on emailed documents

Payoff statements, wiring instructions, and changes in contact information should always be verified verbally.

4. Use secure portals when available

Uploading financial documents via email increases risk for everyone on the chain.

5. Trust your gut

If something feels off — a tone shift, an unusual request, a last-minute change — pick up the phone. Quick skepticism beats quick regret.

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FINAL THOUGHTS:

Real estate transactions have always involved moving pieces, tight timelines, and high stakes. What’s new is the sophistication of the criminals who want to exploit the process. But with the right awareness — and the right professionals in your corner — these scams can be stopped in their tracks.

At Vanderveen Law, we take the security of our clients, lenders, and real estate partners personally. If you have questions about any communication you receive during a transaction, call us. A 30-second conversation can protect a lifetime’s worth of savings.

📞 Have questions? Reach out anytime: www.timvanderveenlaw.com

***This article is intended for general informational purposes and should not be construed as legal, tax or other professional advice. Prior to acting on any information in this article, you should seek legal, tax or other relevant professional counsel.***