Homeownership can be complicated, but we also think it’s one of the most rewarding ventures out there. In our series, Ask an Edina Realty Lawyer, we are hoping to demystify some of the trickier aspects of buying, selling, and owning a home.
In this edition, one of our lawyers recaps how buyers and sellers can protect themselves against cybercrime and other online security breaches.
Dear Edina Realty Legal,
There’s a lot of talk about cybercrime in the news. Does this affect the real estate industry?
Edina Realty Legal:
Unfortunately, it does. These cyber-criminals — people who commit theft using the internet, email, and other technology — will look anywhere for money to be stolen. And that includes real estate transactions. But if you’re careful, you can avoid falling prey to these schemes.
Across the country, the real estate industry has seen a significant increase in the efforts of cyber-criminals to steal money out of real estate transactions. These scams are ever-changing and include posting fraudulent advertisements for rental properties seeking to steal from innocent renters and scammers pretending to be owners of vacant land with the intent of absconding with the buyer’s money. Perhaps the biggest scam (and potentially, most devastating) involves wire fraud. Here are the general elements of how that works:
- A fraudster will send a malicious email that seeks to trick the recipient into providing personal information (often a username and password) or clicking on a link or an attachment that contains a virus, infecting the recipient’s computer.
- The goal of the email is to gain access to the computer systems of someone involved in a real estate transaction (like a buyer, seller, lender, real estate agent, or closer). Once access is given, criminals can log in to learn the details of that upcoming transaction.
- With those details, the criminal can create an email that appears to be from a legitimate source. Typically, this email asks the buyer or a closer to wire funds into an illegitimate bank account.
Real estate fraud accounts for hundreds of millions of dollars in losses. In fact, the FBI reports $350 million in losses from real estate fraud in 2021.
How to protect yourself against cybercrime
That may sound a bit scary, but there are precautions you can take to protect your money. These rules can be applied to every technological aspect of your daily life, not just if you are involved in a real estate transaction:
- Never send money to anyone who requests it by email without first personally contacting someone you know (like the title closer or your real estate agent) to confirm the request is legitimate.
- When confirming the request, don’t rely on the phone number that was provided in the email; criminals often put their own phone number in the email. Use a phone number that you know or look up the number on the internet.
- Use care in dealing with emails. If you receive an email from someone you don’t know with a link or attachment, don’t click on it without verifying that it’s legitimate. And never provide important private information like your username, passwords, bank accounts, pin numbers or other items that might allow criminals to take advantage of you.
- Use multi-factor authentication (MFA) for your email. MFA may prevent a hacker from getting into your systems even if the wrongdoer has gotten access to your passwords.
Cyber-security is a top priority at Edina Realty. Edina Realty has implemented many security procedures to prevent criminals from getting access to our systems and your information. We are constantly evolving to meet the threats of these cyber-criminals as they become more sophisticated.
The Edina Realty Legal Department serves as in-house counsel for Edina Realty and does not represent private clients. This insight is not intended to provide legal advice.