How Business Email Compromise Attacks Real Estate Transactions

Hand using laptop in dark setting

Understanding Business Email Compromise (BEC)

Business Email Compromise (BEC) is a sophisticated form of cybercrime in which attackers impersonate legitimate business email accounts to deceive individuals and manipulate them into transferring funds or divulging sensitive information. In the real estate sector, where transactions involve large sums of money and complex coordination among multiple parties, BEC attacks represent a particularly serious threat. Fraudsters often exploit the fast-paced, detail-oriented nature of property transactions to infiltrate communication chains and redirect financial transactions for personal gain.

BEC attacks typically follow a structured process:

Reconnaissance: Cybercriminals gather information about the target organization and its personnel via public sources, social media, and data breaches.
Phishing: Attackers craft convincing phishing emails to trick victims into divulging login credentials.
Account Compromise or Spoofing: Once access is obtained, attackers either use the real account if it is not protected by MFA or create lookalike email addresses or even lookalike (typosquated) domains.
Social Engineering: The attacker uses insider language and timing to manipulate recipients into taking urgent actions, like wiring funds.
Execution: Funds are transferred to accounts controlled by the attacker, often through mules and a chain of international bank accounts to obfuscate the trail.

Statistics on BEC Prevalence in Real Estate Transactions

According to the FBI's 2023 Internet Crime Report, BEC scams resulted in losses exceeding $2.9 billion across all sectors, with the real estate and rental sectors being among the most affected. In real estate, the average business email compromise incident results in losses of $150,000 to $200,000. The American Land Title Association (ALTA) also reports that nearly 30% of title companies experienced an attempted BEC attack in the last year.

Common Tactics Used in BEC Attacks

Phishing emails targeting real estate professionals often mimic transaction-related messages, such as document requests, wire instructions, or contract amendments. These emails are crafted to seem urgent and appear to come from trusted parties like clients, title companies, or mortgage lenders.

Spoofing involves creating email addresses that closely resemble legitimate ones—for example, replacing an "m" with an "rn" or using a different domain (.biz or .net instead of .com). Impersonation may also include hijacking legitimate accounts, which makes it difficult for even vigilant users to detect fraud. Attackers often monitor communications to insert themselves at crucial moments, such as just before a wire transfer. It’s not uncommon for attackers to create mail rules upon entry to provide filtering or backdoor capabilities.

BEC attackers frequently use social engineering to build trust and urgency. They may:

Pose as a buyer, seller, realtor, or broker requesting a change in payment instructions
Leverage fear, time pressure, or confidentiality to override normal verification processes

These tactics are particularly effective in real estate, where transactions frequently involve tight deadlines and high stakes.

Real-Life Examples of BEC Attacks in Real Estate

The FBI’s IC3 report data shows BEC scams have been reported in all 50 states and 186 countries. Here are a few real-life examples of BEC attacks affecting the real estate industry:

The Washington Couple Incident: A couple in Washington State lost $272,000 intended for a home purchase after receiving a spoofed email from their title company with fraudulent wire instructions.
The Manhattan Real Estate Firm: In another case, a real estate brokerage in Manhattan lost over $1 million when a hacker gained access to an agent’s email and redirected closing funds.

Victims often experience substantial financial losses with limited opportunities for recovery. Businesses encounter monetary loss, reputational harm, potential litigation and regulatory scrutiny. In some instances, victims have been unable to finalize home purchases, lost earnest money or suffered emotional distress due to a breach of trust.

Lessons Learned from Past BEC Cases

Real estate is vulnerable to attacks throughout the transaction process, especially when email is involved. Past BEC attacks have, however, provided us valuable takeaways:

All parties involved should always verify wire instructions verbally using known contact numbers
Title agents and real estate professionals should always implement strict protocols for handling financial transactions
It is up to the real estate industry and title companies to increase awareness and training on spotting phishing and spoofing within their teams and for consumers

Preventing Business Email Compromise in Real Estate Transactions

It is important to implement strategies to help protect consumers and the industry from BEC scams.

Here are some email security best practices for title agents and real estate agents:

Use Multi-Factor Authentication (MFA) for all email accounts
Monitor access to your email account
Implement DMARC, DKIM, and SPF to prevent spoofing
Use encrypted email services for sensitive communications
Avoid sending wire instructions via email - use encrypted communications or secure portals

In addition to these best practices, employee training is essential to help thwart scam attempts. Some recommended training tactics include:

Identifying phishing emails and suspicious behavior
Recognizing spoofed domains
Following protocols for verbal verification
Understanding the role of social engineering

Regular simulated phishing tests can help reinforce these lessons. Measure user resilience by tracking the emails reported to your IT security team.

Technology continues to evolve and email security solutions represent a mature market. They offer capabilities that basic email platforms (such as spam filters and antimalware) do not provide.

Here are a few email security features you may want to explore to help prevent:

AI-powered threat detection systems
Email filtering and sandboxing to scan attachments and links
Secure communication platforms with audit trails
Automated alerts for unusual behavior, such as logins from foreign IPs

The Role of Title Agents in Protecting Against BEC Attacks

Title agents often serve as the last line of defense before a transaction concludes. They can help mitigate risks by:

Establishing clear procedures for verifying wire instructions
Using secure portals for document and fund transfers
Regularly auditing their cybersecurity policies
Purchasing cyber insurance to cover potential losses

Consider notifying real estate agents and consumers about the risks of BEC as early in the process as possible.

Provide clients with educational materials about how wire fraud occurs
Include warnings in email signatures and on websites
Host joint training sessions with realtors, agents and lenders
Develop a crisis response plan in case of suspected fraud

BEC attacks continue to plague the real estate sector, leveraging sophisticated social engineering and technological manipulation to exploit the vulnerabilities in communication and transaction workflows. With increasing frequency and higher financial stakes, it’s imperative for professionals across the real estate industry—including title agents, brokers, and buyers—to recognize the signs of BEC, implement preventative measures, and foster a culture of cybersecurity awareness. Protecting against BEC is not just a technical challenge but a collective responsibility that hinges on vigilance, education, and collaboration.