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Real Estate Wire Fraud Disclosure

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REAL ESTATE WIRE FRAUD DISCLOSURE

This Wire Fraud Disclosure notifies the parties to the transaction described below of significant risks associated with electronic funds transfer instructions, including fraudulent interception of email or other communications. Parties are advised to follow the verification procedures set forth herein before wiring or transferring funds.

Parties and Transaction

Buyer Name:   Seller Name:

Transaction and Closing Information

Anticipated Closing Date:   Possession Date:

Escrow Contact:   Phone:   Email:

Wiring Instructions and Verification

The parties acknowledge that wiring instructions are a common target for fraud. A wiring instruction is any communication that directs transfer of funds by wire, ACH, check deposit, or other electronic means. The parties agree to the following mandatory verification procedures before initiating any transfer of funds:

1. Do not rely solely on email or text. Before wiring funds, the sending party must verify wiring instructions by calling the escrow/title contact at the telephone number on this form or another telephone number known independently to the sending party.

2. The sending party must record the date and time of the verification call and the name of the person who confirmed the instructions.

Acknowledgments and Representations

By signing below, each party represents and warrants that they have read and understand the risks associated with electronic communications and wire fraud, and they agree to take the following actions prior to initiating any electronic transfer of funds in connection with this transaction:

- Use only telephone numbers independently verified by the sending party (calling a number contained in the same email that provided wiring instructions is not acceptable unless the number was previously verified in a separate communication).
- Confirm in writing the name of the recipient, bank, account number and routing number at the close of verification call and retain written proof of verification.
- Immediately report any suspicious communication or suspected fraud to the escrow/title company and to the other party.

Yes No

If yes, identify the sender (email address or name):

Indemnification; Limitation of Liability

Each party agrees to indemnify, defend and hold harmless the other party, their agents, and the escrow/title company from and against any and all claims, losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of or resulting from a transfer of funds initiated by that party where the party failed to comply with the verification procedures set forth in this Disclosure or where the party acted upon fraudulent wiring instructions that were not independently verified as required.

The escrow/title company and the parties do not guarantee recovery of funds once wired and will not be liable for losses resulting from fraud where a party did not follow the required verification procedures. This provision shall survive the closing or termination of the underlying transaction.

Acknowledgement

The undersigned acknowledge receipt of this Wire Fraud Disclosure, confirm they understand the content, and agree to comply with the verification procedures set forth herein prior to initiating any transfer of funds in connection with the transaction identified above.

Buyer Printed Name:

By:

Date:

Seller Printed Name:

By:

Date:

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What the Real Estate Wire Fraud Disclosure Is and Why It Exists

A Real Estate Wire Fraud Disclosure is a written notice provided to buyers, sellers, lenders, and closing agents that explains the risk of fraudulent wire instructions and the procedures to verify wiring details before transferring funds. The disclosure typically describes how legitimate wire instructions will be communicated, lists trusted contacts, and warns recipients to verify changes to account information by direct phone contact. The form is meant to reduce impersonation and social-engineering losses during escrow and closing by creating a documented verification step prior to any funds transfer.

Why this Disclosure Matters for Transactions and Risk Management

The disclosure helps reduce financial loss and liability by setting clear verification expectations for all parties and creating an auditable record of that advice. It supports compliance with best practices and can be used as evidence that parties were warned about electronic-funds fraud under relevant standards including the ESIGN Act (15 U.S.C. ch. 96) and state electronic transaction laws.

Why this Disclosure Matters for Transactions and Risk Management

Who typically completes or receives the Wire Fraud Disclosure

This disclosure is most commonly prepared by parties involved in closing and funds transfers so everyone knows how to verify wiring instructions and who to contact if instructions change.

  • Real estate agents and brokers: prepare and deliver disclosures to buyers and sellers during escrow.
  • Title and escrow companies: include disclosures with closing instructions and wire confirmations.
  • Lenders and mortgage servicers: provide disclosure when sending payoff or funding wiring details.

Use the disclosure early in the transaction and again before any wire transfer to minimize risk and create a documented verification trail.

Core elements to include in a professional Wire Fraud Disclosure

A clear, concise disclosure should combine plain-language warnings, definitive verification steps, and specific contact data to minimize confusion at closing.

Disclosure Statement

A short plain-language warning that wire fraud occurs and that wiring instructions should be independently verified before sending funds.

Verification Steps

Step-by-step instructions for confirming account details by phone using numbers from trusted sources, not from the instruction email or text.

Authorized Contacts

Named persons and roles with direct phone numbers (title officer, escrow officer, lender contact) for wire confirmation and discrepancy reporting.

Timing Requirements

Clear timing for when funds are due, the window for verification, and any hold periods for last-minute changes to instructions.

Acknowledgment

A signature or checkbox line where recipients acknowledge receipt and understanding of fraud risks and verification responsibilities.

Recordkeeping Note

A brief statement that the disclosure and verification steps will be retained for the transaction file and may be relied upon in dispute resolution.

Required data fields commonly included on the disclosure

Recipient Name: Full legal name
Transaction ID: Escrow or file number
Authorized Contacts: Name and phone
Wire Instructions: Bank name and last four digits
Verification Method: Phone call or in-person
Acknowledgment: Signature or checkbox

Step-by-step: completing and using the disclosure during the transaction

Follow these sequential steps to ensure the disclosure is issued, acknowledged, and preserved before any wire transfer.

  • 01
    Prepare Disclosure: Populate fields and attach to escrow instructions.
  • 02
    Deliver to Parties: Send to buyer, seller, lender, and escrow participants.
  • 03
    Verify Wire Details: Confirm by phone using independent contact numbers.
  • 04
    Document Acknowledgment: Collect and store signed acknowledgments in the file.

Where the completed disclosure should be sent and stored

Clear routing ensures all obligated parties receive the disclosure and that the verification trail is preserved for closing and potential disputes.

  • Escrow File: Attach signed copy to escrow records.
  • Lender File: Place copy with loan closing documents.
  • Broker Records: Broker retains a copy in transaction file.
  • Recipient Email: Send signed disclosure to signing parties.

Digital signing and technical delivery considerations

Use an eSignature method that provides signer authentication, an audit trail, and secure storage to preserve the disclosure's evidentiary value.

  • Authentication: Email, SMS code, or stronger
  • Audit Trail: IP, timestamp, signer email
  • File Formats: PDF recommended

Ensure any eSignature platform you use supports ESIGN/UETA compliance, secure retention, and exportable audit reports for the transaction record.

How to configure the disclosure for electronic completion

Set up fields, signer order, and required authentication so each party must verify wiring steps before transfer.

Field Configuration Required signature, initials, date fields
Signer Order Escrow -> Buyer -> Seller -> Lender
Authentication Method Email link or SMS code
Conditional Fields Show verification steps if wire requested
Audit Settings Enable IP and timestamp capture

Key timing points to observe when issuing the disclosure

Timely delivery and repeated verification close to funding reduce the chance of last-minute fraud and disputed transfers.

At Contract Execution:

Provide disclosure when agreements are signed.

Before Wiring Funds:

Reconfirm instructions within 24 hours prior to transfer.

On Instruction Change:

Require new verification for any altered details.

At Closing:

Keep a signed copy in closing package.

Retention Start Date:

Retention begins on the document creation date.

Common mistakes that increase wire fraud risk

  • Relying solely on an emailed change to bank details without calling a known phone number — attackers commonly change instruction emails.
  • Using phone numbers provided in the same email thread for verification instead of independently sourced numbers from company websites or escrow statements.
  • Failing to require signed acknowledgment of the disclosure, which makes it harder to show parties were warned in a dispute.
  • Keeping only transient copies of verification (text messages or deleted emails) instead of preserving a durable audit trail in the transaction file.

Principal risks and potential consequences of inadequate disclosure or verification

Financial Loss: Large unrecoverable wire losses
Liability Exposure: Breach of fiduciary duty claims
Regulatory Risk: Consumer protection scrutiny
Escrow Delays: Funding and closing postponement
Tax Consequences: Backup withholding triggers
Reputational Harm: Loss of client trust

Real-world examples of the disclosure in use

Practical examples show how an explicit verification step and documented disclosure reduce errors and speed resolution when issues occur.

Martin Properties (Tim Martin, Founder)

Tim Martin used a standardized disclosure and mandatory phone verification before escrow funding to reduce misdirected wires.

  • The verification step caught a wrong account number the week before closing.
  • "I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently."

Optica Ventures (Brian Fitzgibbons, COO)

Optica Ventures implemented a verification checklist attached to every closing file to ensure contact numbers were independently sourced.

  • The checklist prevented a social-engineering attempt on a high-value transfer.
  • "The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers."

Comparing common eSignature options for handling the disclosure

Vendor choice affects authentication, audit trails, and cost. The table shows representative starting prices and core capabilities relevant to secure delivery and signing of disclosures.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial, no credit card required No No Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently asked questions about the Real Estate Wire Fraud Disclosure

Answers to common questions about validity, verification, eSigning, and next steps if funds are misdirected.


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