Many real estate industry pros are increasingly relying on the latest technology to gain a competitive advantage. Today’s busy buyers and sellers want omnichannel communications, instant access, and the ability to handle their business remotely if needed.

These evolving expectations are accompanied by a precipitous rise in different kinds of real estate fraud and cybercrime aimed at real estate transactions.

Protecting your data and your business’s reputation is paramount. From sensitive financial details to proprietary records, failure to properly secure this information can expose all parties involved to devastating consequences.

Prioritize cybersecurity and ensure your clients enjoy a seamless experience with these insights from our team.

Understanding the Threat Landscape

Property transactions offer an irresistible buffet for scam artists, involving large sums of money, valuable personal information, naive clients, and frequently lax data privacy.

According to the FBI, more than 9,500 people were victims of real estate fraud in 2023 alone, with over $145 million in losses. It’s vital to take steps to ensure your clients are educated about common signs of scams and create a plan of action. 

The REALTOR® Code of Ethics and Standards explicitly acknowledges the obligation to preserve the confidentiality of personal information provided by clients. The NAR also created a data protection checklist and “recommends that you work with an attorney licensed in your state to help you develop cybersecurity-related programs, policies, and materials.”

Secure Communications

Possibly the most important way to protect yourself and your clients is to utilize encrypted communications methods or a dedicated transaction management system and practice proper email and password hygiene. 

Password managers securely store and generate strong, unique passwords for each of your online accounts, and most of them have enterprise versions or safe-sharing options. Many tech businesses are now moving past passwords to multi-factor authentication (MFA) or other passkey technology.

Real estate professionals should always proceed with caution when it comes to emails. Unknown attachments and links can contain malware, setting you up as a target for business email compromise (BEC), a strategy where hackers can get access to your most sensitive info through impersonation. 

BEC is one of the most common and costliest forms of cyberattack. Also known as “spear phishing,” it involves manipulating victims and using social engineering techniques to craft counterfeit messaging that fools the unwary. 

Today’s real estate scammers are more sophisticated than ever — here are some essential tips to share with your clients:

• Check email addresses carefully for look-alike domains used by scammers.
• Do not open email attachments or click links from unknown senders.
• Beware of urgency or emotional calls to action. 
• Always confirm through a second channel, such as a phone number already saved, in person, or on another secure communication platform.
• Never do business over public or unsecured wifi without a Virtual Private Network (VPN).
• Keep antivirus software and firewalls active and up-to-date.
• If something seems off or suspicious, don’t proceed.

In a low-inventory and competitive market, buyers and sellers can experience heightened emotions and make decisions that go against their best interests. Clear communication and thoughtful education demonstrate your trustworthiness and expertise as a savvy industry professional. 

Implementing a Cybersecurity Plan

As PropTech continues to evolve and new cyber threats continue to emerge, attorneys, brokers, title companies, and other stakeholders in the real estate landscape should embrace a proactive approach to cybersecurity.

Encryption is essential for protecting sensitive information from unauthorized access. Keeping software and systems up to date is a crucial cybersecurity practice. Cybercriminals often exploit vulnerabilities in outdated software to gain access. 

Of course, it’s always smart to work with a skilled IT expert and legal counsel to create a cyber and data security strategy tailored to your business needs, including guidelines for secure email practices, password management, and data handling procedures. Start by assessing your current security posture and identifying potential vulnerabilities.

Protecting client data and ensuring business continuity in case of an incident is essential. Implement a robust data backup strategy, including regular off-site backups, encrypt sensitive data both in transit and at rest, and develop and maintain a comprehensive data retention and destruction policy.

Develop a detailed incident response plan that outlines steps to take in case of a cyber attack, regularly test and update this plan, and establish an entity responsible for managing and coordinating the response to online attacks.

Consider incorporating technology solutions that can bolster your cybersecurity efforts, such as endpoint detection and response (EDR) solutions, secure cloud storage, and artificial intelligence tools for advanced threat detection and prevention.

Ultimately, effective cybersecurity in the real estate industry requires a holistic and flexible approach. Cultivate a culture of awareness and accountability, where all parties understand their role in safeguarding sensitive information. At Landtrust, we’re dedicated to helping real estate professionals protect their clients against fraud, scams, and theft — reach out to us today!