As closing day nears for your buyer client, the excitement is building. Every professional that is involved in the transaction — you, the seller’s agent, the lender, and the title company — is busily concluding all of the things that comprise their prospective checklists so that the closing goes smoothly and everyone rides out into the sunset. You know what they say: nothing is complete until the money changes hands.
Every now and then, REALTORS® get word of surprising and regretful news that thieves somehow intercepted the buyer’s closing funds. But how? Once details of the fraud are uncovered, often the fodder of the thieves’ resource is something that we, as real estate professionals, rely on every day: e-mail. Cyber criminals try many ways to gain access to e-mail user names and passwords. Some of the tactics they use are clever and technical; others involve simply exploiting lax e-mail security measures. Real estate agents and title companies are targets because thieves know that, at some point, a real estate transaction involving the exchange of thousands of dollars, will be taking place. If they can gain access to an e-mail chain that involves wiring instructions, they can do something as subtle as adding an extra letter or character to a sender’s e-mail address, then send new or “updated” wiring instructions to the buyer. If the buyer does not verify these new or “updated” instructions, they can find themselves sitting at the closing table only to eventually receive the devastating news that their hard-earned funds never reached the intended destination.
What are some of the things that real estate professionals can do to help mitigate such a tragic event?
First, good communication is paramount. In preparing for closing, the buyer will likely be stressed or confused. Because of all of the information received and the instructions that accompany, it can be overwhelming. To aid, we can ensure that our buyer understands the instructions and how to convey them to their bank or deposit institution. Verifying any new or updated instructions the buyer receives before taking any action that involves transferring or wiring money for the closing is important.
Second, we can cultivate and maintain good habits when it comes to cyber security. A home is usually one of the biggest purchases a person makes during his or her lifetime. Our clients depend on us to make sure that any purposeful intrusion and misuse of the information they provide to us, or through us, is minimized and that we help in maintain a level of awareness and diligence in the service chain. This means we should use strong passwords, change them often, and keep our anti-virus software updated. We should also stay present while in our inboxes and other information portals and take care to proactively and immediately deal with communications that look strange, out of character, or suspicious.
Lastly, we can keep abreast of information of various fraudulent schemes and the different tactics that fraudsters use. We can also educate ourselves about the available technology and protocols that are effective in thwarting this type of criminal activity.
Taking these actions will help to ensure that thieves don’t sit down with us all at the closing table.
Valencia Martin, RE/MAX Select, is a member of the ORRA Professional Development Forum. She can be reached at firstname.lastname@example.org.
ORRA frequently schedules classes, workshops, and online offerings related to risk management. Check the ORRA Calendar often, as new classes are continually being added to the education lineup.