Tag: real estate

Top 5 Ways to Protect Yourself from Cybercrime When Buying a Home

Learning how to protet yourself from cybecrime when buying a home is an afterthougth for most buyers and agents alike. But, real estate buyers, sellers an the professionals working in the business, agents included, are currently a favorite target for cybercriminals. And the target is getting bigger very quickly.

What can happen in real estate, you may ask?

  • Theft of wire transfer funds
  • Identity theft and impersonation
  • Compromised bank accounts
  • Threat of litigation over stolen data
  • Unauthorized account creation
  • Credit theft and damage
  • Much, much more…

And these are but a few of the risks to all parties involved.

I built the first part of my career around cybersecurity and, in the last year alone, I’ve been asked to consult on more than one situation where real estate brokerages have been the victim of long-term data and financial theft. And it doesn’t just affect the brokerage and agents, but their clients too.

In reality, if most people knew exactly how much invisible risk and ever-present vulnerability they could be subjecting themselves to when buying and selling real estate, they might just decided to stay put.

But cybercrime and cyber insecurity is everywhere and we can’t allow it to prevent us from living our lives.

To make buying and selling a home safer, follow these few simple, practical steps to make your transaction safer.

Ask your real estate agent what safeguards they use to protect your personal data

If they have trouble answering or they can’t answer, beware. Identity theft and financial impact to home buyers and sellers often comes from criminals stealing personally identifiable information (or “PII”) that was inadvertently left lying around in hard copy form. It ends up in the trash, mailed out inappropriately, lying around the office on desks, accessible on unlocked computers, or outright stolen easily by organized cyber criminals.

Verify any emails that come from your agent and never send sensitive info via email

In its 2016 Internet Security Threat Report, Symantec says fake emails, a.k.a. “Phishing” or “Spear-phishing” as it’s called, is the number one cyber threat to consumer industries such as real estate. What can happen? Well all your settlement money can be stolen by having you inadvertently redirect new wire instructions to a new settlement company because you thought your agent asked you to do so in an email. It’s happening every month now. Always confirm by phone any email asking for ANY kind of PII or banking info.

Don’t email sensitive info via email or submit info using insecure websites

Over 90% of Realtor websites are not SSL-enabled. What’s SSL? It stands for “Secure Socket Layer” and it basically means that when you hit send to register, sign in or submit a form on a website that the information being transmitted is encrypted so it’s hard (in fact, nearly impossible) to break and use. If you’re on a real estate website and you don’t see this in top left of your browser’s URL bar, leave quickly (and don’t ever submit any forms!):

SSL

Beware of sending or opening PDFs

An increasingly popular way cybercriminals get you to unknowingly give them your PII? They have you install malware without your knowledge. What’s the #1 way they do that? Infected PDF files. Cybercriminals often use phishing to get members of a real estate office to click and install malware by sending emails that look real, but aren’t. When they do, they unwittingly install corrupt files designed to infect others, steal data and send it back to the cybercriminal’s servers. That means the whole office gets infected, then you get infected when you get a PDF from their office. Then PDFs you send are infected and, well, you get the idea.

Don’t ever send sensitive info in email without encryption

For most email users, it never crosses their minds to check whether what they’re sending is secure. The fact is, email interception and theft is very, very easy, but it’s hard for cybercriminals to get any value out of it if the information is encrypted. If your Realtor is using a secure and reliable service such as Docusign, you can feel a bit safer, but NEVER, ever send sensitive personal info like socials or bank account info via email that is not encrypted. Tell your real estate agent it’s a must that both of you communicate via free and easy encrypted email services like Virtru that plug right into your Gmail. Get lazy and you could pay, big-time.

A few more good things to do? See the list below…

If you don’t, you could be very sorry you didn’t.

5 Big Problems with the Residential Real Estate Business in 2017

After spending the last 2+ decades of my life as an intelligence analyst, data scientist, software engineer and cybersecurity specialist for the U.S. Intelligence Community, Department of Defense and the private sector, I made the move to real estate.

Sort of.

About two years ago, my wife (and business partner) and I moved on from our 3rd technology firm. We fully intended to take some time off after a string of startups and a major acquisition of one of our firms. A string of bad real estate experiences buying and selling residential homes and investment properties would change all that.

Frustrated with the issues, we started itemizing all the things we saw as problematic in our home buying and selling experiences. Very quickly, a list began to take shape of problems we’d seen and overcome before in our intelligence community work and in our eCommerce efforts.

In 2014, we crafted the idea of HomePocket (www.homepocket.com) to start helping over time with some of the problems we found in our own real estate experiences. So, that same year, we started a real estate brokerage in Florida to gather data, learn and experience actually being real estate professionals.

To say the least, we’ve put together lots of interesting data and observations about what’s right and what’s going wrong with real estate today. Here are a few of the major issues.

1 – A generation of Realtors isn’t changing hands

According to the National Association of Realtors, their average member is a white female in her mid-50s. From my own experience, this number is actually a bit low – and, oddly, it’s trending higher. Most successful, professional (i.e. full-time) real estate agents are Baby Boomers and upper-end Generation X.

As our world globalizes (and hyper-localizes) via things like social media, mobile technology, and instant access to data just to name a few, time and technology advances march the newer generations faster and faster out in front of the older ones.

For real estate, that means the older generations who preside over the vast majority of the career field and consumer-facing services are increasingly out of date and out of touch with the needs of their fastest-growing customer base – and their own market.

This is not only an issue for the consumer, but for leading companies and real estate franchises trying to evolve and keep pace. They struggle not only to keep up with their buyers but to maintain “backwards compatibility” with their own employee base.

How big of a problem is all this on a business scale? Just think about the entire publishing and newspaper industry. Or Polaroid, Xerox or Blockbuster.

And I won’t even bring up the “M” word here. With $41 Trillion set to change hands to the Millennials by 2052, there’s a looming communication gap between real estate buyers and their agents the size of the Grand Canyon.

 

2 – Adoption and application of technology is very inconsistent

As a consumer. everywhere you turn in real estate there’s a website, an app, a drone video or a 360º virtual walk-thru. Technology is having a big impact on the real estate market, but not necessarily in the ways, you may think.

As consumers, we’ve all become accustomed to using Amazon to get stuff at our doorstep overnight or apps like Letgo to sell the Bowflex you never use in less than an hour to someone down the road from you. We now prefer communicating via Snapchat or GroupMe to phone calls and even text. I can buy a car (and have many times) completely online.

This all works because technology development, design, and usage are very focused and consistent. It’s also based on standards in and between businesses, as well as between businesses and consumers. Most importantly, good products are easy to use by all maker-buyer-seller sides. Thus, the best offerings rise to the top based on the value they add while poorer products fall away.

In real estate, the technology landscape is a confusing, inconsistent mess for Realtors and buyers. And what technology is there can’t even effectively be used.

Why?

From my own personal experience in real estate over the last two years, the majority of professional realtors are not technically savvy. And that’s putting it nicely.

In fact, with most being in the older Generation X range and Baby Boomer generation, reluctance to keep pace with new tools and apps and services has not only impacted their own advancement, but the ability of the market to develop and offer new tools for them to use (or not, in this case).

On the consumer side, well, the market is mostly noise. Lots and lots of noise.

The landscape is filled with user unfriendly websites, limited apps that are not well-maintained, massive data inconsistencies and not a single “killer app” that all consumers can make a part of their lives. Even the big sites like Zillow and its Trulia brand are not monolithic in the market with big numbers of lovers and haters – especially on the Realtor side.

3 – You can’t really buy a house online yet?!?!

The last three car purchases I’ve made have transacted without me ever meeting the salesperson until I picked up the car. I have not contacted a travel or an insurance agent since the late 90s. I file my taxes electronically. I renew my tags online. The last house I financed? I never met or actually spoke to anyone. You can even complete most all the bits of an adoption online.

Everyone always says, “But real estate is different. Buying a home is different.” I say, for a consumer that’s increasingly behaving the way I do nowadays, is it? Not anymore.

Yet buying and selling real estate remains an overly (or improperly) regulated, decentralized and inconsistent activity governed at all levels from local, to state, to federal and the private sector. Until all this changes, real estate will remain a slow-developing “civilization” that really should be further along.

It’s kinda like, say, Brazil.

 

4 – Low barrier of entry for the career field

There are many, many real estate pros I respect. Hell, my wife and son are licensed agents. But they’re a perfect example of exactly how low the barrier to entry actually is for this career field.

When we started our brokerage to really learn the ropes of real estate so we could develop www.homepocket.com, they both went from unlicensed and inexperienced to full-blown agents in less than 3 weeks. For many states, it takes even less time.

How is this a bad thing, you may ask?

For starters, the ranks of real estate sales is growing. In some states, it’s even doubling over the last decade. But the majority of these new agents never work in real estate full-time as what’s called a “professional” real estate agent. They’re referred to by the pros as “weekend warriors.”

That means your odds of getting a part-time, inexperienced and low-tech Realtor are pretty good.

Imagine the majority of financial planners, EMTs, lawyers or those hazardous materials truck drivers next to you on the highway saying “Trust me. I just started doing this 3 weeks ago.” Yet, from a risk perspective, buying and selling real estate is one of the top activities you can engage in most likely to land you in serious trouble and/or out a whole lot of money.

 

5 – The real estate data epidemic

There are so many issues with real estate data it’s hard to know where to start. The heart of the issue lies with what’s called the Multiple Listing Service, or “MLS.” The MLS is a decentralized, locally-run set of over 1400 data registries created back in the 1800s where real estate professionals enter the listings for homes they’re selling.

If you don’t see potential issues from just this info alone, keep reading.

Each MLS charges the Realtors anywhere from a few hundred to a few thousand dollars a year to take their listings and then make them available to services, sites, and apps that want to display them. They also charge each service, site or app to use or display the listings.

The MLS offices in a given city or state are independently run, so policies and fees vary widely from office to office. Many times, there’s more than one MLS covering listings a single area too.

As well, there’s no single, authoritative data standard for home listings and no single aggregation of all the data in one place. I’ll repeat the first part as it bears, well, repeating:

there’s no single, authoritative data standard.

That means listings vary from city to city, state to state. Sometimes in very big and important ways.

The result?

It’s hard to access and consume listing data in a reliable, consistent way and you must go MLS by MLS. You know those little bar codes on products that let you check out at the store? Imagine if all of those were different in each city. Think about that for a moment and where we’d all be right now as consumers.

This is all both a contributor to – and one of the reasons for – the technology problems pervasive in real estate. It hampers tool and app development, creates and increases consumer confusion, makes governance and legal controls tougher and at least a dozen other major impacts. On the whole, it acts like a drag chute on a race car for real estate as a whole.

For a wide variety of reasons, the real estate game simply isn’t changing with the times quickly enough. Perhaps it’s been the overarching “real estate is different” mindset that’s persisted for so long with governments, buyers, sellers and real estate pros. Maybe it’s been the stranglehold held by a few major associations and the many state-by-state laws that technology, litigation, and antitrust legislation is only beginning to wear down. Whatever the many causes, these are interesting times. In fact, the next few years will likely be a period of big changes in how you and I buy and sell real estate.

For now, it’s still too soon to see it really starting to take place.

Why Selling a Home in 2017 Will Be More Challenging

home selling

Whether you’re selling your own home as a “for sale by owner” or a Realtor helping your clients sell, chances are you’ll need to work smarter and harder in 2017 than you did last year to find the right buyers for your homes for sale.

Here are a few reasons why and what you may be able to do about it.

Escalating Mortgage Interest Rates

As Freddie Mac just noted, 2016 ended the year with rates at a two-year high. In fact, rates are up 85 basis points since early November. It’s a trend that is highly likely to continue through 2017, with many experts predicting the rise may reach historic highs over 5%.

Don’t think that means a lot for most homebuyers? Just to compare, a monthly payment on a $225K mortgage at 2016 levels of 3.57% is $1,019. At 5% where 2017 rates are headed? It’s a whopping $1208 per month.

Simply put, this means many homebuyers won’t have the budget to afford buying a first home or move up to a larger one. And that means fewer total buyers for the homes you have for sale – no matter what area you’re in.

mortgage shrinkage

Digging a little deeper, this trend is likely to affect home buyers (and sellers!) more in the lower end of the price range. It also means that, in very tight markets, it can take longer to get a mortgage and be much more difficult to qualify interested buyers for your homes.

That all means more competition for fewer buyers. Finding the right buyers first and fastest will be the key to successful sales.

 

Home Price Trends Spell Bad News for Buyers

Whether you think we’re headed for another real estate bubble or not, one thing is for sure: home prices have steadily been rising.

As The Wall Street Journal author Steven Russolillo points out in a recent article:

“The market is flashing warning signs. The homeownership rate still hovers near a five-decade low and it is tough for less-affluent buyers to obtain mortgages. Meanwhile, mortgage rates have risen substantially since Donald Trump’s election victory, which will affect affordability.

Even without that, historical trends suggest that housing prices aren’t likely to keep rising at their current pace. For instance, since prices bottomed in 2012, they have risen in real terms at more than 5% a year, according to data courtesy of Yale economist Robert Shiller. That is great news for current homeowners but bad for anyone looking to buy, particularly first-time buyers.”

Again, home prices coupled with rising mortgage rates means a shrinking pool of buyers – and more competition for you and your sale.

 

The Top Way You Can Overcome These Challenges

Despite rising rates and home prices, there is something you can do to improve your chances of a sale:

Consistently target the buyers most likely to be seriously looking to buy in your area.

Today, almost all home searches start online. By using the right digital marketing and advertising techniques designed to focus only on those web and mobile viewers interested in homes in your area, you can ensure you find the right buyers and find them faster than other competitors.

For FSBO sellers, exposure and affordable marketing is – simply put – critical. Most FSBO sellers convert to Realtor listings within 6 months because of low exposure (which leads to few showings and little interest). If buyers can’t find you, your home won’t sell. And, no, Craigslist does not equal good digital marketing, folks.

For Realtors, unfortunately, most digital advertising promises and “guranteed #1 search rankings” are just ways to separate your from your ad budget every month. Indiscriminate digital ads shown to whoever wants to click them and reports of millions of ad impressions only help these advertisers ask you for more money next month. Think about it…If they did their job as described, would be pay more each month to reach “even more” buyers?

Plus, the big guys add an extra layer of challenge to already-tough market conditions by selling marketing or leads to dozens (or more!) Realtors in one area. It all adds up to even more competition than interest rates and home prices can cause.

So, how do you target the most serious home buyers in your area? Get a great website designed to rank well in Google, of course.