Identity Theft and Real Estate Transactions

Lauren Sakiyama
Dolores Bernal
December 6, 2023
Identity Theft and Real Estate Transactions

Image by Trista

In the past year, I sold my home and bought a new one, which was an eye-opening experience. 

It wasn’t my first time going through the buying and selling process, but the last time I went through it was over a decade ago. This was my first time handling everything online

Doing business online is convenient, but I write about identity protection, and I couldn’t help but see risks right and left. I quickly realized that buying and selling a home or any property makes you a prime target for identity thieves. 

Identity theft and real estate transactions go together like butter on bread. Think about it. You have a transaction that requires you to reveal a lot of personal information, including your Social Security number, bank account information, and credit score. The transaction is also a big one, involving large sums. 

You might as well put a sign on your forehead that says, “Take my identity!” 

Of course, there are things you can do to help protect yourself, and I’ll go through all of them. First, let’s look at how identity theft happens in real estate transactions.

Act Now: One of the best things you can do to protect yourself is get identity theft protection from Aura. They’ll watch for suspicious activity and provide insurance in case the worst happens.

How Identity Theft Happens During Real Estate Transactions

Criminals can commit many types of fraud during a real estate transaction. Some of the most common include: 

1. Real Estate Fraud

This is when a scammer calls a real estate agent impersonating a property owner. Usually, the property is an empty lot, and the thief says they’re very motivated to sell. They’re even willing to list the property under its value to attract a cash buyer.

The real estate agent loves that scenario – quick sales are good for business, so they immediately list the property. The thief fakes everything from there on out, opting for a remote notary during closing (who they also impersonate) and asking for funds to be wired to an account that they quickly transfer off-shore. 

2. Wire Transfer Scams 

Bank Wire Transfer Online

Image by Mohamed Hassan

Real estate transactions almost always rely on wiring funds from buyer to seller. Wire transfers allow you to move large amounts of money quickly, but they carry inherent risks. Once your wire transfer goes through, there’s no getting the money back, even if you realize you sent it to the wrong account. 

In a wire transfer scam, the thief gets the property buyer to wire money to the thief’s account rather than the escrow company. They do this by impersonating the real estate agent or faking the escrow company’s email. 

Sometimes, they’ve completely stolen the agent’s identity – meaning the buyer unknowingly works with a fraudster throughout the transaction. In most cases, though, they’ll try and time things, waiting until just the right moment to send a single fraudulent email. 

The email looks like it came from the escrow company or real estate agent and contains new wiring instructions for the buyer. If the buyer follows those instructions, they send their down payment directly to the thief’s account.

3. Malware and Data Breaches

Real estate agents, mortgage brokers, and escrow companies hold sensitive information during real estate transactions. That makes them major targets for data breaches and malware attacks.

Cybercriminals go after these businesses with a range of goals. 

They could use malware to track real estate transactions. Some malware literally lets criminals watch every keystroke. That way, thieves know when it’s best to step in and send a fraudulent email that leads to a “successful” case of wire fraud. 

Other criminals might hack into the real estate brokerage or escrow company’s data to gather personal client information. They then sell this information on the dark web, where others use it to steal identities. 

Malware attacks and data breaches are happening more and more frequently across industries, but for real estate and mortgage broker offices, they’re of particular concern. Though Fannie Mae and Freddie Mac have internet security requirements that brokers must meet, detrimental breaches still occur. 

In July 2023, Citywide Home Loans, a Utah-based mortgage lender, had to settle a $1.2 million lawsuit due to a 2020 data breach that leaked sensitive information. And they’re far from the only example. There are reports of real estate data breaches worldwide, from Toronto to Australia

Even more concerning are data breaches of government entities that monitor real estate agents. In 2022, the Washington State Department of Licensing issued a warning to all real estate licensees that they were aware of “suspicious activity involving professional and occupational license data.” 

Suppose a criminal gets their hand on licensing information. In that case, they can easily impersonate a legitimate real estate agent, scamming buyers and sellers out of their money and even stealing their identities! 

Protecting Yourself From Identity Theft 

Now that you understand some of the many ways identity theft can occur during a real estate transaction, it’s time to focus on what you can do about it. If you plan to buy or sell a home in the near future, there are several things you should consider doing:

Act Now: Protect yourself from identity theft by using Aura. They will monitor your accounts, help resolve identity theft that comes up, and provide your family with identity theft insurance.

1. Research Your Real Estate Agent and Mortgage Broker. 

Real estate agents tend to be active community members, so if you’re moving locally, you can use someone you already know and trust. If you’re moving further away, you might not know any realtors personally. 

If that’s the case, you need to do some research. Start by asking friends and family. They may know somebody in the area you’re relocating to who can help. Realtors from your current neighborhood may also be able to refer to you in-network colleagues for your new location. 

Whether you find your real estate agent by referral or not, it’s important to ensure everything’s legitimate. Contact local state or county licensing offices and ensure the realtor’s license is current. 

The same rules apply if you’re buying a home and using a mortgage broker to obtain a loan. Research them before you work with them, even if a friend or family member recommends them. 

Reading online reviews can be helpful in this area. Still, you should also check with your state regulator or the Nationwide Mortgage Licensing System & Registry to ensure their license is current. 

You can search for them on the Better Business Bureau site. If the BBB has received any complaints, you’ll want to ensure they were resolved. 

2. Ask if Email Communications Are Secure. 

Don’t be afraid to ask your mortgage broker and realtor about the security of their email communications. Do they use some form of encryption or have any policies about attachments in place? 

If you don’t feel comfortable with their answers, see if you can drop documents off in person instead. It might take longer or seem painful, but it’s worth the peace of mind. 

3. Ask How Your Personal Information Will Be Handled. 

During the transaction process, it’s important to understand where and how your personal information will be stored. You’ll also want to ask what happens after closing

Do they shred unnecessary documents? Delete them after a certain number of days? Or do they store them in a (hopefully) secure place? 

If you’re meeting with your broker or agent at their office, this is a time to be a little judgmental. Is their office clean and professional, or does it seem disorganized? Piles of paper, rickety file cabinets, and loose folders aren’t exactly a good sign. 

4. Be Careful of Wire Transfers. 

Wire scams are very prevalent when buying or selling a home, so you need to be extra vigilant during this part of the closing process. 

First, ensure your escrow company doesn’t send wire instructions via email. Email is too easy to fake. 

The escrow company set us up with a password-protected online portal when we bought our home. Wire instructions appeared there rather than directly in our email. 

Second, verify the wire instructions. You should personally call the escrow company and verify the wire instructions. When buying our home, I did this twice – once on my own and once at my bank. This leads me to my third recommendation.

Initiate your wire transfer at a local bank branch. Depending on which bank you use and where you live, this might not work for you, but having a banker double-check everything can be very helpful. 

Typically, bankers must call and verify the wire instructions before sending, which gives you one more layer of security. Plus, bankers are usually experienced at sending wire transfers (and dealing with scams), which makes them better at spotting signs of potential fraud.  

For example, the bank I used was very concerned that a local escrow office had asked me to wire funds to a bank in a different state. It turned out that the escrow company was national, and everything checked out, but I’m glad the banker took a few extra steps to verify things before sending my down payment. 

5. Secure Your Personal Devices. 

Hopefully, your real estate agent and mortgage broker have great security measures in place, but a hacker could steal the information from your devices even if that’s the case. 

While buying and selling our homes, I must have ended up with hundreds of personal documents downloaded to my phone and computer. If either one were physically stolen or compromised with malware, I would have been in serious trouble. 

That’s why taking extra caution with your devices while buying or selling real estate is important. Ensure they’re always on you or in a safe place. 

Now is the time to be extra vigilant. Don’t leave your phone or computer unattended, and make sure they’re locked with a password or, better yet, biometrics

You should also consider investing in anti-malware software. Anti-malware will parse the harmful programs hackers use and destroy them on your phone and computer. 

When the sale closes, get those files off your phone and internet-connected computer. If you need to save them, put them on a flash drive you can keep in a secure location. 

6. Shred Documents as Soon as Possible.

If you have paper documents you filled out and scanned for real estate agents or brokers, shred them as soon as the closing is complete

I’m not referring to papers you might need in the future – closing documents may be necessary for tax purposes, but things like loan applications can be shredded immediately.

✎ Related: How to Safely Get Rid of Paper Documents ➔

7. Use Identity Protection Services. 

If there was ever a time to invest in an identity protection service, it’s now. Identity protection services will monitor the dark web, so if your information gets out, you’ll know about it right away. 

The best services also monitor your credit at all credit reporting bureaus for signs of fraud. 

On top of this, they often include additional internet security services. Things like a safe vault for secure file storage and anti-malware software come standard with some services. 

Many also include password managers, which can help you create more secure passwords for accounts that the escrow company or mortgage brokerage has you set up. 

Identity protection services typically offer identity theft insurance and restoration services. So, if your information leaks and you become a victim of identity theft, you don’t have to stress. These services will help you restore your identity in full. 

You will usually have access to threat resolution professionals who have helped many people regain their identity. They’ll guide you through the process if needed and often do much of it on your behalf. 

The insurance coverage will cover the expenses related to restoring your identity, including childcare costs, lost wages, and legal fees. It also usually provides stolen fund reimbursement.

When I was buying our home, I used Aura, which I also recommend to others. Aura includes all of the services I mentioned above and then some.

Act Now: Aura is your best bet for identity theft protection. If you act today, you can get a 14-day free trial and a 70% discount. Protect your accounts and secure your identity.

8. Trust Your Gut. 

Mortgage brokers and real estate agents have data protection standards to follow, but no industry is without its poor performers. If anyone you’re working with makes you uncomfortable or gives you bad vibes, don’t feel bad looking for someone else. 

Real estate transactions tend to be stressful and high stakes. You shouldn’t work with anyone you don’t entirely trust.  

What To Do If You Notice Signs of Identity Theft

If you recently purchased or sold your home and have already noticed signs of potential identity theft, there are a few things you can (and should) do. 

  • Report the incident. Identity theft is a federal crime. If you notice signs of it on your credit statement, file a report with your local police. You should also alert the FTC.

    Know that, in all likelihood, neither the police nor the FTC will be able to get your assets back if they were stolen. Reporting the issue creates a record of the theft, though, which you might need to solve credit disputes later.
  • File a dispute. Review your three-bureau credit report in detail. If there are signs of fraud, like accounts you don’t recognize, file a dispute with the reporting bureau. 
  • Issue a fraud alert. You can place a fraud alert on your credit. This asks lenders to call and verify your identity before issuing loans or other lines of credit.
  • Contact financial institutions.  If an identity thief makes their way into your banking account and steals funds, you should let your bank know what happened. Even if things haven’t gone that far, it’s a good idea to let your financial institutions know you believe you’re an identity theft victim. 

They will issue new cards and account numbers. You should also change your password and email account. If your bank offers it, set up multi-factor identification (MFA). It’s one more hurdle thieves will have to jump through to access your assets.  


Buying or selling a home is often exciting, but it’s also stressful. The last thing you need is to have your identity stolen on top of everything else. 

Unfortunately, though, identity theft and real estate transactions often go together

If your mortgage broker or real estate agent experiences a data breach, your personal information could easily be leaked onto the dark web

Alternatively, thieves might attempt to impersonate legitimate businesses, like your escrow company. In either case, you’ll likely lose money and your good credit score.

That’s why taking extra precautions when buying or selling a home is so important. Doing things like vetting the people you’ll work with, shredding sensitive documents, and investing in an identity protection service such as Aura can help ensure you don’t become an identity theft victim.

Related Articles About Real Estate Scams: