There was once a time where contracts were handwritten, stacked on desks or in car trunks, and stored in unlocked file cabinets at the office. However, overtime, information has become more and more valuable–and, therefore, is more prone to theft and fraudulent activity.
Part of your role as a real estate professional is to ensure that the information you obtain is as carefully protected as any other valuable commodity. The privacy of your clients’ personal information and their online safety should be a priority during every step of the sale or purchase process, and beyond.
Here are some common practices that you should forgo, and the safer, more secure practices you should follow. This allows you to protect your clients and provide top-notch professional services that conform to your fiduciary responsibilities.
If you’ve been in the habit of asking your clients some quick questions via email or sending along documents for their review through unsecured, unencrypted email platforms, you’re putting them at risk. Hackers commonly use details found in emails to create phishing schemes, creating emails that appear to be from legitimate stakeholders in the transaction in order to commit fraud.
Instead, employ a secure document upload or transaction management platform.
Check with your brokerage or local association to find out if they provide a transaction management solution like Dotloop or Brokermint for the preparation and sharing of contracts, contingencies, and supporting documentation. There, you can add team members, lenders, and other colleagues to the transaction so that all of its communication is secure and protected.
Never leave sensitive information lying around unsecured or keep personal information longer than required.
Perhaps you print out emails or documents in order to review them on the go. Maybe you’re carrying around files containing confidential information about your clients and their finances. Maybe you’re a property manager or rental agent with a backlog of background checks that you’ve never disposed of. If your mismanagement of these records results in identity theft or other fraudulent activity, you could be held partially liable.
Instead, limit the use of document hard copies, and dispose of physical copies appropriately.
If you struggle to process information onscreen, see if a tablet or other electronic device will make this more manageable for you. Share documents only with colleagues involved in the transaction, and remind them of the need for document security. When disposing of physical copies, do so in a timely manner and in a way that results in the total destruction of the information they contain—throwing them in the dumpster out back is not sufficient. Consider a professional document disposal service or use a high-security cross-cut shredder.
Of course, there are some colleagues who are just more fun to work with, such as the lender who tells great jokes or the title company rep who is always fun at company social events. However, if your favorite affiliated professional isn’t on the same page with you in terms of security, you’re putting your clients and their money at risk.
Instead, screen potential professional partners to find out what they do to keep your clients safe.
Don’t just ask how much your title company charges or what perks they’ll provide for your clients. Ask for an in-depth explanation of the security procedures they have in place. Talk to your lender about the way he or she protects your client’s identity and financial information so that you can feel good about recommending them when required.
Never post photos and personal information about clients on your social media or online platforms without permission.
Half of your Facebook or Instagram feed likely involves photos of your clients or “funny” jokes about the house they just looked at. This could create a security nightmare for your business or open you up to professional disciplinary action if a listing agent takes issue with the way you have characterized his or her client’s property and undermined its sale.
Instead, obtain signed waivers for client photos and marketing materials.
Ask your real estate attorney to draw up a simple release allowing you to use client photos and testimonials as part of your marketing material, and then include it as part of your standard representation agreement. Never include photos of children or identifying information that would make it easy for your client to be tracked down in real life. Ensure that you keep the focus on happy clients and your services, and don’t trash talk listings or other agents who you encounter during the process.
Never change wiring instructions or supply private information about yourself, clients, or a transaction based on an email or phone conversation.
One of the most common and expensive ways that criminals steal money from buyers is through sending fraudulent wiring instructions or “changing” existing instructions. In many cases, they create convincing emails that look legitimate and contain contact information (also fraudulent) where you can confirm the change. When you attempt to do so, you are reassured by the thief of the legitimacy of the information.
Instead, double-check any changes with your designated closing company or law office representative.
Keep track of your title company or legal representative so that you can reach out directly to confirm changes or adjustments to any aspect of the closing process. This is yet another reason to limit communications and document transfer to transaction management platforms or document vaults with limited access.