Unless you’ve paid enough earnest money to cover your down payment and closing costs, you’ll be expected to provide additional funds at closing. Years ago you would have shown up at closing with a certified bank check, made out to the closing agency. Today that’s not so common. Instead, you’ll probably be instructed to have the funds wired directly from your bank to the closing agency’s trust account. This practice is convenient for all concerned, but it can also be risky. Many lenders now have a warning posted on their websites and below the signature on their emails, but some do not.
The warning tells buyers NOT to wire funds to an account provided to them via email. Always call first to verify the account number.
Why? Because clever crooks have found ways to hack into email accounts at Title Companies, escrow offices, attorney’s offices, and banks. They can intercept an email from the closer to you (or from you to the closer), change the account number, and send it on – with no one the wiser until you get to closing and the money isn’t there.
The result? Instead of your life savings going to your down payment, they’ve gone to an off-shore account which can never be traced. In other words, your money has vanished and you can’t get it back.
You might think that given the danger, no closer would send this information via email, but some still do. If yours does, don’t take it at face value. Call the closer and verify the account number before you call your bank with wire instructions. It will take a few extra minutes from your day, but losing a few minutes is far better than losing your down payment funds.
Sellers should also take heed.
If the closer is going to wire funds to your bank, be sure to convey that account number via phone or in person.
Do not use email. Cyber-criminals spend their free time figuring out new and easier ways to steal. Don’t let them steal your dreams of owning a new home here in Brantford or Paris.