A millennial who'd bought 3 houses got scammed out of $60,000 buying her fourth — and it's more common than you might think

• Regina Smith, 34, owned three homes and wanted to buy another to rent out.
• Smith inadvertently sent her $60,000 down payment to a scammer. Then her home purchase fell through.

Regina Smith had found a two-bedroom house in the historic district of Memphis, Tennessee. It was over 100 years old with lots of character in an artsy part of town — perfect for a short-term rental.

Her offer of $280,000 was accepted and she prepared for closing in January 2023.

When Smith had bought three houses previously, she'd used a cashier's check to deliver the down payment or brought the money to the title company's office. Because loans for investment properties often require a bigger down payment, she was dealing with a larger sum of money: $60,000. She anticipated having to wire the money before closing.

A day before the scheduled closing, Smith received an email that appeared to be from the title company and included instructions about where to wire the $60,000. She obliged, sending the funds online.

About an hour later, she received an email with wire instructions from the real title company. The first email was fake.

"The first thing I felt was complete and utter despair," Smith told Business Insider. "I just could not believe this was happening to me. I sat on the floor and I cried for maybe 45 minutes."

Smith was a victim of wire fraud, a broad term that refers to a group of criminal activities that includes email phishing and money laundering. The FBI's Internet Crime Complaint Center received over 880,000 complaints about internet scams totaling $12.5 billion in losses in 2023 — a 49% increase in the amount of money lost the previous year. Real-estate wire fraud falls under the category of business email compromise, or BEC, according to the FBI. In the FBI's Internet Crime Complaint Center's annual report, BEC was the second-costliest crime, behind investment fraud, in 2022, with a reported $2.9 billion in losses.

And more people are falling victim to real-estate crimes. In 2021, the FBI reported 11,578 people lost $350,328,166 in real-estate scams, a 64% increase from the previous year, showing how common it's become. A report from the wire-fraud-protection company CertifID found that one in 20 homebuyers and sellers were victims of real-estate fraud in the past three years — with the median loss exceeding $70,000.

Smith is not alone. A retired couple in New Jersey, who got conned by a real-estate wire-fraud scam in 2017 when they were looking to buy a smaller house, told AARP that they wired $91,500 to the wrong person after they got an email from someone impersonating their real-estate attorney. Similarly, Virginia resident Darryl Aldrich sent $28,000 to a fraudster when buying a house, even showing up to his closing with the email as proof of payment — but the title officer couldn't accept it.

"All of our hearts just sank at that point," Aldrich told Fox Business. "That money was just gone out of our account."

What happened to Smith, who was hardly a wide-eyed newcomer to the real-estate market, shows that these scams can happen to anyone.

How Smith was deceived

In Smith's case, the fraudster was able to hack into the title company's system and access the details of the sale — including the date of the closing and the costs — making it easier to impersonate the title company in their email.

"They made it look as if this information came directly from the title company that we were utilizing," she said. "I mean, it looked almost identical to previous email correspondence that we received."

Even though it wasn't Smith's first time buying a home, she admitted she got caught up in the familiar excitement.

"Hindsight is always 2020," she said. "When you're excited about this deal that's about to happen, you've been working towards it, you finally see the light at the end of the tunnel — it's almost like you have rose-colored glasses."

When she reread the scammers' email later, Smith noticed some red flags, like an extra character in the name of her realtor, who was cc'd.

But it's easy to see why she was misled: The hackers had enough information to imitate someone who'd been involved in the home-sale transaction from the beginning.

"They had the exact closing costs down to the cent," Smith said. "They had the address of the home, a closing date, time, and location. They had the assistant's name that worked for the title company — almost as if they'd previously received emails or correspondence from this individual because they were able to mirror that person's signature, their title, their entire profile."

Smith got her money back but lost the house

After realizing she made a mistake, Smith reached out to her title company, the bank, local law enforcement, and the FBI, who put her in touch with the Secret Service.

She had wired the funds on a Thursday, and by Monday, the $60,000 was back in her bank account thanks to the help of her local Secret Service branch, Smith said. (The Secret Service had not yet responded to a request for comment before publication.)

Homebuyers are able to recover funds 28% of the time, the CertifID study found.

Smith was happy to get her money back, but it cost her that house. Without the down payment, Smith was unable to close on the house, and the sellers chose a different buyer.

Fortunately, she's happy with the outcome.

"My husband and I were able to find another property, and actually, it all worked out for the good because the property that we found is 10 times better," Smith said, adding that the five months they've had the property as a short-term rental have been fruitful so far. "So although it was a very difficult road and journey, we are definitely doing well. I'd say nothing good comes easy."