Earnest Money Deposits and Wire Fraud: How to Send Funds Safely

Wire fraud targeting real estate transactions has become one of the fastest-growing financial crimes in the United States. According to the FBI's Internet Crime Complaint Center, victims of real estate wire fraud lost over $446 million in a single recent year. Criminals hack email accounts, impersonate title companies, and send buyers fake wire instructions that divert their earnest money deposit into a fraudulent account.

Understanding how earnest money deposits work and knowing the exact steps to verify wire instructions can protect you from losing thousands of dollars. This guide covers both.

What Is an Earnest Money Deposit?

An earnest money deposit (EMD) is a good-faith payment a buyer makes after a purchase contract is signed. It shows the seller that the buyer is serious about completing the purchase. The deposit is held in escrow by a neutral third party, typically the title company, and is applied toward the buyer's closing costs or down payment at closing.

In Florida, the earnest money is usually due within 3 to 5 business days after the contract is executed. The amount ranges from 1% to 3% of the purchase price, though this is fully negotiable. The funds are deposited into the title company's escrow account and held until closing or until the contract terminates.

How Does Wire Fraud Target Real Estate Transactions?

Wire fraud in real estate follows a predictable pattern:

1. Email compromise: Criminals gain access to the email account of a real estate agent, title company employee, or lender. This often happens through phishing emails or data breaches.
2. Monitoring:The attacker monitors email traffic and waits for a transaction where money is about to move. They learn the parties' names, the property address, and the closing timeline.
3. Fake wire instructions:At the critical moment (usually when the buyer is about to wire the earnest money or closing funds), the attacker sends an email that looks like it comes from the title company. It contains wiring instructions that route the money to the attacker's bank account.
4. Funds disappear: Once the buyer sends the wire, the money is moved through multiple accounts within hours and is nearly impossible to recover.

What Are the Red Flags of a Fraudulent Wire Request?

Watch for these warning signs:

• Last-minute changes to wire instructions. A legitimate title company almost never changes bank accounts mid-transaction. If you receive updated wiring details, treat it as a red flag.
• Urgency. Fraudulent emails often pressure you to wire immediately, claiming the deal will fall through if you do not act within hours.
• Slightly altered email addresses.The sender address may differ by one character (e.g., "@coastalcollective-title.com" instead of "@coastalcollectivetitle.com").
• Instructions directing funds to a personal account. Legitimate title company escrow accounts are business accounts in the company's name, not personal checking accounts.
• Grammar or formatting differences. While sophisticated attacks look polished, many still contain subtle formatting differences from previous legitimate emails.

How Should You Verify Wire Instructions?

Follow these steps every single time you wire money for a real estate transaction:

1. Call the title company directly.Use a phone number from the title company's official website or from your original contract documents. Do not call a number included in the email with the wire instructions.
2. Confirm every detail verbally. Read back the bank name, routing number, account number, and beneficiary name to the title company representative on the phone.
3. Never email wire confirmation. Do not send confirmation of your wire transfer via email. If the attacker has access to your email, they can intercept it.
4. Wire early in the day. If you wire in the morning and discover a problem, your bank has more time to initiate a recall before end-of-day processing.
5. Confirm receipt. After wiring, call the title company (again using a verified phone number) to confirm they received the funds into their escrow account.

What Does Coastal Collective Title Do to Protect You?

At Coastal Collective Title, we take wire fraud prevention seriously. Our security protocols include:

• Wire instructions are provided in person or via our secure client portal, not through standard email.
• Every wire instruction includes a verbal verification step. Our team will never pressure you to skip this step.
• We use multi-factor authentication on all email and financial systems.
• Our escrow accounts are audited regularly and maintained at FDIC-insured institutions.

What Happens If You Become a Victim?

If you suspect you have wired money to a fraudulent account, act immediately:

1. Call your bank and request an emergency wire recall. Every minute counts.
2. File a complaint with the FBI's IC3 at ic3.gov.
3. Contact your local law enforcement and file a police report.
4. Notify your real estate agent, title company, and lender so they can take protective measures.

Banks can sometimes recover wired funds if the recall is initiated within a few hours. After 24 to 48 hours, recovery becomes extremely difficult because the funds are typically moved through multiple accounts and often sent overseas.

Can You Use a Cashier's Check Instead of a Wire?

Some title companies accept cashier's checks for earnest money deposits, which eliminates wire fraud risk entirely. However, for closing funds (the balance due at closing), most transactions require a wire transfer because of the larger dollar amounts and the need for verified, same-day funds. Check with your title company about which payment methods they accept for each stage of the transaction.

Lori LaCoppola

Owner & Managing Partner

Lori founded Coastal Collective Title to deliver a premium, relationship-first closing experience across Florida. With deep title industry expertise, she oversees every transaction with precision and personal attention.

813-544-8626lori@coastalcollectivetitle.com