Real estate survived 2020 thanks to a rapid shift to new ways of doing business and interacting with our clients. While this has accelerated the industry’s shift to using more technology tools, it has not been without some significant risks. Digital security is not a new concern, but it will soon be an even bigger issue now that remote interactions are becoming more common.
For example, a recent report from TransUnion showed that fraud alerts among rental housing applicants surged during the pandemic. Typically, these individuals would create a fake credit profile, apply for an apartment and be approved based on a false credit history. They would then move in and not pay rent until they were forced out, such as when the landlord changed the locks. Since the tenants were living in the space under a fake identity, the landlord couldn’t press charges as they were never given the real names of the culprits—or their contact information.
Add to this the already present threat of phishing scams, where someone uses an email address that is almost identical to that of an actual real estate agent and sends wiring instructions to the client. The client unknowingly wires their money to the wrong account, never to be located again.
It isn’t too hard to imagine a future where buyers create fake pre-approval letters to buy themselves some time while they try to secure financial gifts from family members and use their inflated buying power as leverage for the sellers to weed out other potential bidders.
As we move to a more digitally centered way of doing business, we are going to need to pay much closer attention to the possible vulnerabilities at every stage of the process. The first place we need to focus our efforts is on the digital paper trail that comes with every transaction. Many of the forms have sensitive information that can easily fall into the wrong hands. If stored in any of the main software platforms, it can be “read” by AI and used to feed worldwide databases. Plus, the communications about specific points of the negotiation can become unwieldy if they happen in one platform (emails or text messages) but need to be finalized in another (the text document of the contract). It’s too easy to leave out some of the smaller details, which then leads to delaying the sale while one party requires they be added—and all the paperwork be updated.
Now that we have brought more tech tools onboard, we as an industry need to spend some time making sure we are protecting our clients at every level.
While the first scenario mentioned above is somewhat removed from what most real estate agents would likely deal with, these examples demonstrate how prevalent scammers are when given the opportunity. We can’t let our industry become associated with mistrust if we leave open “digital backdoors” that let bad actors get away with misdeeds. Too many real estate agents have been caught unawares and suffered as a result.
Allen Alishahi is president of ShelterZoom, the technology company behind DocuWalk. For more information, please visit www.docuwalk.com.