Protecting Your Clients from Wire Fraud in Fix-and-Flip Transactions: A Guide for Real Estate Professionals

The problem

Why this matters

As a real estate professional, you sit at the center of every financial transaction your clients make. When wire fraud occurs, you're often not the victim — but you're frequently the professional who could have prevented it. Here's how.

Your Exposure as a Real Estate Professional

Real estate agents, brokers, and attorneys have faced civil liability for wire fraud losses when courts determined that reasonable preventive measures weren't taken. While individual outcomes vary by jurisdiction and circumstances, the trend toward professional accountability is clear.

Beyond legal liability, there's the reputational damage. A client who loses their down payment to wire fraud in a transaction you facilitated may not pursue legal action — but they will tell everyone they know. In an industry built on referrals, that's a cost that never appears in a single incident report.

What Every Real Estate Professional Should Be Doing

Have the fraud conversation at first client contact: Don't wait until the day before closing. Tell every client about wire fraud at the first meeting — what it is, how it works, and what they should never do.
Never send wiring instructions over email: Use Garded to deliver all payment details through an encrypted link. This single practice eliminates the most common fraud vector.
Verify all title company instructions before sharing them: Before forwarding wiring instructions to your client, call the title company and confirm the details match what they sent. Never forward unverified instructions.
Create a written verification protocol and share it: Give every client a one-page wire transfer verification checklist at first contact. Make it part of your standard onboarding packet.
Establish a 'no email wire instructions' policy publicly: Put it in your email signature: 'I will never send wiring instructions via email. If you receive wiring instructions in an email claiming to be from me, call me immediately.'

What professionals need to know about fix-and-flip transactions

Why this transaction is targeted: Fix-and-flip deals move quickly, involve hard money lenders, and transition immediately into contractor payment phases — each stage is a wire fraud opportunity

Fix-and-flip investors average multiple transactions per year — establishing a secure payment protocol at the start of each project prevents compounding risk across a portfolio

Protect Your Clients and Your Business. Use Garded.

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Common questions

Am I legally liable if my client is a fraud victim?

Liability depends on the facts and jurisdiction. The trend in real estate law is toward professional accountability when basic preventive measures weren't taken. Consult a real estate attorney for your specific situation.

What should I do if I suspect a fraud attempt mid-transaction?

Stop all payment activity immediately. Contact the title company and both agents by phone using verified numbers. File a complaint with the FBI's IC3 at ic3.gov and notify your broker.

Can I include wire fraud language in my listing or buyer's agreements?

Yes — and you should. Adding a clause that describes your wire security protocol puts your standard practice on the record and sets clear expectations for all parties.