According to HousingWire, a Kentucky real estate broker recently encountered what she believes may have been an attempted money laundering scheme disguised as a legitimate home purchase. Amanda Marcum, a broker-owner with Berkshire Hathaway HomeServices, noticed several warning signs when a buyer made a cash offer on a property. The buyer put down an unusually large earnest money deposit of around five percent, which is dramatically higher than the typical one percent that Marcum secures for her sellers in her small Kentucky market.
The red flags multiplied when the buyer took several days to provide proof of funds, and when he finally did, it came as a screenshot from an unfamiliar digital account rather than a traditional bank statement. Things became even more suspicious when the buyer repeatedly delayed sending the actual earnest money deposit, offering various excuses about moving money between accounts. Eventually, Marcum advised her sellers to walk away from the deal, though she never fully understood what the buyer's endgame might have been.
Matt O'Neill, a retired Secret Service agent, confirmed to HousingWire that this type of scheme is a real concern, though he emphasized it isn't necessarily an efficient money laundering method. According to O'Neill, the likely goal would be to have sellers return funds via cashier's check, which would give criminals a more useful form of payment. He noted that while traditional money laundering through third parties or cryptocurrency typically involves fees, a real estate transaction offers criminals a way to move and transform money without those additional costs.
O'Neill warned that real estate agents should watch for several telltale signs of potential fraud. Buyers who fail to ask normal questions about property value or market conditions, those who want to move quickly on a property they just viewed, and those offering suspiciously large deposits are all reasons to exercise caution. He emphasized that agents should verify they actually know their buyers beyond a phone call or video meeting, and that unusually fast purchases at full price should raise eyebrows.
The article notes that various safeguards are being implemented across the industry to combat real estate fraud. Property owners can use county or town alert systems to monitor whether ownership information changes, and some brokerages are equipping agents with fraud detection tools. The National Association of Realtors recently launched an online resource to help members prevent and detect fraud of all kinds.
What I am seeing locally here in the Bay Area and East Bay is that our market dynamics put us in a somewhat different position than what's happening in slower markets. Our strong property values and generally more sophisticated buyer pools mean I haven't encountered schemes quite like what Marcum described, but that doesn't mean we should be complacent. The lesson here for my clients is that if something feels off about a deal, it probably is, and taking time to verify the basics about your buyer or seller is time well spent no matter how competitive the market gets.
