Cyber Security In Real Estate

Dated: 01/20/2018

Views: 876

2017 was an eye opening experience for me in regards to the rapidly increasing threat of cyber hacking.  We’ve all experienced the chaos from the breaches in security from major companies like Equifax, Target and many others.  For most people this causes a little concern, some brief paranoia and then life goes on.  In most cases, these breaches didn’t harm too many people, relatively speaking, at least not significantly.  My sister in law actually had her identity stolen in one of these incidents.  Some loser ran up one of her credit cards and tried to open another account.  The debt was forgiven and everything was straightened out.   This process was a major inconvenience for a very brief period of time.  Unfortunately, I can’t say the same for the other two experiences I was a part of, both real estate related. 

I recently had a house on the market in my home town.  We took the pictures, did some advertising and had quick success, everything was great.   After about a week on the market, we received a full price offer and it was cash!  The buyer did her inspection, which went very well, and contracts were sent out.  Everyone was feeling great, until about two weeks later.  I called the buyer’s agent to ask why the contracts hadn’t been signed yet.  What I heard next was something I thought only happens in movies.  I never thought I would be involved in anything like this, ever!  The agent informed me that her buyer received an email from her lawyer to wire the $325,000 to his account so he can prepare for our upcoming closing.  As you might suspect, the buyer wired the money.  Of course, the lawyer had never sent such an email.  Either one of two things happened… either the cyber thief hacked the lawyers email account or created an email that looked very familiar, making a small change that would go unnoticed.   Needless to say, my seller was devastated, but our hearts went out to this poor woman who had just lost most of her savings.  To make it worse, she was a single mom looking to purchase her first home for her and her children.  Just typing this blog entry is making me get a little teary eyed again.  I'm not sure if here money was ever recovered.  We had to eventually resell to another family.

The image below shows an example of how a hacker can make a fake email:

Can you spot the difference? The agent's name was switched from [email protected] to [email protected]

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My second experience was from a friend’s transaction in NJ.  After selling her mother’s co-op in NJ, the buyer’s attorney wired the proceeds of the sale to the seller, so he thought.   A few days after closing, my friend asked her mother’s attorney when she can meet with him to pick up her check from the sale.  He said, “There is no check, your mother asked the other attorney to wire it directly into her account”.  Yup, panic set in pretty quickly after that.  My friend told the lawyer that her mother is an old lady and would never do that, or even know how to do that.  At that point, they knew they were victims.  Luckily, my friend’s mother ended up getting her money from the attorney.  I don’t know if the attorney took the loss or if he was able to pay it through insurance somehow.  Either way, an attorney should know better.  That just goes to show you how good these scammers are!

PLEASE, PLEASE, PLEASE…. DO NOT wire anyone any money.  I’ve been in this business for a long time and it is not very often that money is wired between parties.  In the event that wiring money is to be done, make sure to first call your attorney and confirm how much money is being sent  and to where. 

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Thomas Ricapito

I got into real estate sales by accident in 2006. At the time, I recently earned a Bachelor's Degree in Economics from Lehman College in The Bronx. I had a very entrepreneurial mind and was ready to....

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