Signing a real estate contract is an exciting milestone, but the window between contract execution and closing carries significant legal and financial responsibilities. Navigating a property transaction successfully requires strict adherence to legal timelines and proactive cyber security measures.
In real estate agreements, contractual performance dates establish binding commitments. When an agreement incorporates a "Time is of the Essence" (TOE) clause, punctual performance is elevated to a mandatory contractual condition. Failing to meet specified deadlines by even a short margin can constitute an immediate material breach.
Key contract milestones to manage carefully include:
Inspection and Due Diligence Period: During this period, the buyer holds a unilateral right to inspect the property and evaluate its condition. If the buyer delivers written notice of cancellation prior to the precise expiration deadline, the contract is terminated and earnest money is returned. However, if the deadline passes without an executed written amendment or formal cancellation, option rights automatically lapse, obligating the buyer to purchase the property "AS IS".
Financing Contingency Period: This clause allows a buyer to exit the agreement if mortgage underwriting approval cannot be secured. The buyer must actively pursue loan approval and serve formal written notice if financing is denied. Missing this cutoff converts the deal into a non-contingent cash obligation, exposing the buyer to default and potential loss of earnest money.
Closing Date: Under an express Time is of the Essence clause, failing to close on the scheduled date creates an immediate contractual default. If the buyer defaults, the seller may retain the earnest money deposit as liquidated damages. If the seller defaults, the buyer may seek a full refund of earnest money or request specific performance through a court order to enforce the legal transfer of the property.
Beyond legal deadlines, buyers and sellers face cyber risks near closing, primarily through Business Email Compromise (BEC) schemes. Cybercriminals target unencrypted email communications between buyers, real estate agents, title officers, and closing attorneys.
Attackers use email account takeovers, look-alike domain spoofing, and thread hijacking to monitor transaction details and closing dates passively. Right before closing, fraudsters send fake wire transfer instructions featuring accurate property details and official branding, but substituting the title company's bank routing and account details with accounts controlled by the attacker. Because electronic wire transfers process rapidly, stolen funds can be moved out of reach within minutes.
Protecting your transaction requires establishing multi-layered verification controls rather than relying solely on email communications.
Essential defensive steps include:
Out-of-Band Phone Verification: Always confirm wiring instructions over the phone before sending any funds.
Independently Source Telephone Numbers: Call the title company, closing attorney, or escrow officer using an independently verified phone number from an official website, business card, or prior in-person meeting. Never dial numbers provided within an email containing wire instructions or embedded in signature blocks.
Confirm Specific Routing Details: Speak directly with the closing officer to verify the receiving bank's name, city, ABA routing number, beneficiary account number, and exact wire amount.
Treat Mid-Transaction Changes as Fraudulent: Any email requesting a change to payment methods or wiring instructions should be treated as fraudulent until verified through independent channels.
Emergency Response Protocol: If fraudulent funds are wired, contact the sending bank's wire fraud department immediately to request an emergency wire recall. Simultaneously file a cybercrime report at ic3.gov to engage the FBI Recovery Asset Team, which can initiate an administrative freeze on fraudulent destination accounts through the Financial Fraud Kill Chain.