The real estate business has grown tremendously, and the transition to digital operations has increased vulnerability to cybersecurity risks.
Real estate transactions entail the management of large volumes of sensitive data, ranging from personal client information to financial details, making it a lucrative target for cybercriminals.
Understanding and minimizing cyber hazards is critical for real estate professionals who want to protect their clients, profits, and reputational integrity.
Why Are Real Estate Companies Targets for Cybercrime?
High-Value Transactions: Real estate transactions involve large sums of money being exchanged and stored. This attracts cybercriminals looking to intercept these transactions.
Sensitive Information: Companies in the real estate industry handle vast amounts of personal and financial information, which can be exploited for identity theft, fraud, and more.
Complex Supply Chains: Real estate involves multiple stakeholders, including buyers, sellers, brokers, lenders, and legal professionals, often leading to multiple points of vulnerability in IT systems.
Rapid Digitalization: As the real estate sector continues to digitize operations from virtual tours to online transactions, the attack surface for cyber threats widens.
Top 5 Cybersecurity Threats in Real estate:
Phishing is a social engineering attack often used to steal user data, including login credentials and credit card numbers. It occurs when an attacker, masquerading as a trusted entity, dupes a victim into opening an email, instant message, or text message.
In real estate, attackers might send emails that appear to be from a trusted realty or financial institution, asking agents or clients to provide sensitive information or to click on a link that will install malware on their devices.
For instance, an email might look like it’s from a well-known mortgage lender asking for immediate confirmation of a password or bank details to process a transaction.
What to Look Out For: Emails or messages that request confidential information, appear from trusted sources, or contain links to fake websites unexpected urgency in emails, grammatical errors, and mismatched sender addresses.
Statistics: According to Verizon’s 2021 Data Breach Investigations Report, phishing is involved in 36% of breaches, with a sharp increase observed in real estate due to the high volume of email communications.
Preventive Measures:
- Double-check email addresses and verify any changes in payment procedures through phone calls (not emails!).
- Educate employees on recognizing phishing attempts and confirm the authenticity of requests for sensitive information via direct communication.
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Wire Fraud and BEC (Business Email Compromise):
Wire fraud involves deceiving someone into wiring money under pretenses. In the digital age, it often involves hacking or spoofing emails to direct funds to fraudulent accounts.
During the closing process, buyers and sellers frequently exchange large sums, typically via wire transfer. Attackers might intercept legitimate emails or spoof a realtor’s or escrow agent’s email to misdirect these funds to their accounts.
What to Look Out For: Fraudulent wiring instructions are typically sent via compromised email accounts.
Statistics: The FBI’s 2020 Internet Crime Report noted that losses from BEC scams reached $1.8 billion in the United States.
Preventive Measures:
- Implement transaction verification procedures such as phone confirmations, and provide client awareness training.
- Be wary of last-minute changes to payment instructions or unexpected emails requesting fund transfers.
- Use encrypted email services for sending sensitive information.
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Ransomware:
Ransomware is a type of malicious software designed to block access to a computer system until a sum of money is paid. It encrypts files on the device, making them inaccessible, and demands a ransom to provide the decryption key.
Real estate companies, with their high-value transactions and sensitive data, are lucrative targets for ransomware attacks.
Such an attack can lock down critical documents like contracts and legal papers, stalling all operations until the ransom is paid or the data is recovered through other means.
What to Look Out For: Unexpected software or system lockdowns demanding a ransom to restore access.
Statistics: Ransomware attacks have seen a 62% increase worldwide since 2019, as reported by SonicWall in their 2021 Cyber Threat Report.
Preventive Measures:
- Regularly back up all data in secure and separate locations so that it can be restored in case of a ransomware attack.
- Keep all software up to date to close security loopholes that could be exploited by ransomware.
- invest in robust cybersecurity solutions and train employees to recognize suspicious links and attachments.
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Data Breaches:
A data breach occurs when sensitive, protected, or confidential data is accessed or disclosed without authorization. It can involve personal customer data, company data, or intellectual property.
Real estate firms collect vast amounts of personal data, including financial information, making them prime targets for data breaches. A breach can lead to significant legal repercussions, loss of client trust, and financial penalties.
What to Look Out For: Unusual network activity, unexpected data access, or reports from clients about unusual communications.
Statistics: Real estate ranks as the seventh-most targeted industry, according to Trustwave’s Global Security Report.
Preventive Measures:
- Utilize strong, multi-factor authentication.
- Employ robust cybersecurity measures like firewalls, antivirus software, and intrusion detection systems.
- Conduct regular security audits and vulnerability assessments.
- Ensure that all data is encrypted, particularly data stored in the cloud.
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IoT Vulnerabilities:
The Internet of Things (IoT) refers to the network of physical devices, vehicles, home appliances, and other items embedded with sensors, software, and connectivity to exchange data.
In real estate, IoT devices are commonly used to enhance property management, security, and energy efficiency. However, these devices often lack robust security measures, making them vulnerable to cyberattacks.
Hackers can exploit vulnerabilities in IoT devices to gain unauthorized access to property systems, compromise sensitive data, or launch attacks on other connected devices within the network.
What to Look Out For: Smart home devices and systems with inadequate security measures could act as entry points into network systems.
Statistics: A study by Statista predicts there will be over 75 billion IoT-connected devices by 2025, increasing the potential risk vectors.
Preventive Measures:
- Conduct thorough security assessments of all IoT devices used in property management.
- Keep IoT devices updated with the latest firmware and security patches to address known vulnerabilities.
- Implement network segmentation to isolate IoT devices from critical systems and data.
- Use strong, unique passwords for each IoT device, and enable multi-factor authentication whenever possible.
How can real estate businesses manage the risk of cyberattacks?
- Regular Training and Awareness: Keep staff updated on the latest cybersecurity practices and threats.
- Cybersecurity Framework Implementation: Adopt frameworks like NIST to guide your security policies and procedures.
- Collaboration with Cybersecurity Experts: Consider partnering with cybersecurity firms to stay ahead of potential threats.
Staying aware of potential cybersecurity risks and taking a proactive approach to security is no longer a choice for real estate companies—it’s required. Real estate professionals may protect their assets, data, and reputation from the devastating effects of cybercrime if they understand the risks and apply solid security measures.
Don’t leave your real estate business vulnerable! Schedule a free consultation with our cybersecurity experts to discuss your specific needs, whether you’re just starting or facing ongoing challenges. We can help you craft a customized security strategy and ensure peace of mind.
