R
eal estate professionals and buyers are increasingly vulnerable to cyberattacks and fraud due to inadequate IT protections and inconsistent reporting standards. A study by Certifid found that real estate companies lost approximately $500 million to fraud attacks, with 17% falling victim to business email compromise (BEC) scams in the past year. The study polled over 1,500 buyers, sellers, and agencies.

    The lack of robust IT infrastructure at many real estate agencies hampers their ability to detect and report potential fraud operations. This creates an environment where scammers can exploit vulnerabilities, often targeting wire transfers by redirecting payments to accounts controlled by the attacker. Notably, 17% of title companies reported sending money to incorrect accounts due to fraud, with half experiencing multiple incidents.

    Contrary to expectations, it's not older generations that are falling prey to these scams but rather tech-savvy Millennials and Gen Z buyers. First-time buyers are disproportionately affected, being three times more likely to be duped by impersonation scams where the attacker poses as a real estate agent or loan officer. This may stem from first-time buyers relying heavily on their agents for guidance, making them more susceptible to these types of attacks.

    Certifid attributes much of the problem to inadequate IT and security infrastructure, as well as the lack of a standardized system for reporting and remediating fraudulent transactions. Victims often struggle to navigate the recovery process, contacting various parties for help without a clear plan or support. This leads to additional stress and impaired chances of recovering lost funds.