How to Protect Your Buyers and Sellers During the Closing Process

Keep home buyers safe throughout the closing process with these three best practices for real estate professionals.

How to Protect Your Buyers and Sellers During the Closing Process

Keep home buyers safe throughout the closing process with these three best practices for real estate professionals.

How to Protect Your Buyers and Sellers During the Closing Process
Written by:

Matt Kilmartin

Read time:

3 minutes

Category:

Real Estate

Published on:

Jan 28, 2022

Real estate transactions are complex, multi-step processes with rapidly moving parts. Property buyers and sellers alike may have difficulty navigating these steps, and it’s up to real estate professionals to walk them through it safely. In fact, 71% of consumers believe that it’s the responsibility of professionals like realtors and attorneys to educate them about risks and keep their assets safe. 

As the last step of any real estate transaction, the closing process involves the financial, legal, and administrative transfer of a home from a seller to a buyer, including the transfer of sensitive personal information between parties. Cybercriminals are eager to intercept this stage of real estate transactions to commit wire transfer fraud and/or business email compromise, the act of impersonating legitimate wire transfer requirements via email.

If escrow agents, real estate professionals, and title companies don’t take the right security measures, their clients may lose their savings and their trust in your business. Use this guidance to educate and protect property buyers and sellers during closing.  

Best practices to keep clients safe during closing

While each real estate transaction is different, always follow these best practices to keep clients’ interests safe. 

1. Ensure the involvement of trusted and experienced professionals throughout the process.

Much of the real estate industry is driven by word-of-mouth advertising and recommendations from friends and colleagues. In fact, most buyers and sellers find their real estate agents through referrals. 

That doesn’t mean you shouldn’t recommend your own carefully vetted list of professionals, or encourage the client to do their homework too. Buying and selling a home is one of the largest transactions most people will experience in their lives, so be sure to advocate for your clients to get the best service from all participants (and make your job easier, too).

Consider these steps when finding transaction partners you trust:

  • Look for third party reviews and authentic testimonials.
  • Check that all businesses have legitimate websites or profiles in well known databases.
  • Look for evidence that all professionals have the appropriate licensing.
  • Search for news of misconduct or risky business practices.
  • After recommending a professional, follow-up and gather feedback. Update your list based on real client experiences.

2. Educate buyers and sellers on security at each phase of the closing process. 

While there is a lot of information available online about the closing process, real estate professionals should still take the time to ensure that their buyers and sellers understand the road ahead. Fraudsters exploit the complexity of the closing process and the relative inexperience of many clients.

The National Association of Realtors found that roughly one third of all home buyers that year were going through the process for the first time. Both buyers and sellers will rely on your expertise to fill in the gaps in their experience.

The house-closing process — also know as a settlement — can vary in length based on many factors, but generally includes two main parts:

  • Completing the mortgage application process and funding requirements.
  • Completing the required title research and legal transfer processes.

Although real estate and legal professionals lead much of the closing process behind the scenes, buyers and sellers are still vulnerable to real estate scams. You can never be too safe when to comes to wire fraud education. Consider reiterating the dangers of wire fraud to buyers and sellers through mutliple key stages of closing, such as after confirming the completion of the title search. Knowledgeable parties are less susceptible to falling for cybercriminals’ schemes. Ensure your buyers and sellers are also aware of the most common tactics cybercriminals use to commit fraud, including mortgage payout fraud and business email compromise. 

3. Use industry-leading tools to collect important financial information securely.

While digital technology has helped streamline the home buying process, it has also increased real estate wire fraud incidents. The FBI IC3 reported BEC losses of more than $2.9B in 2023.

Security platforms like CertifID help buyers, sellers, and real estate professionals avoid the security pitfalls of typical transactions. Instead of sharing sensitive financial details via email or phone, parties can use CertifID, an end-to-end encrypted session that authenticates the identities of everyone involved. Plus, every CertifID-enabled transaction is backed by Lloyd’s of London, up to $1 million.

Build credibility with security

Protecting buyers and sellers throughout the closing process is a big responsibility, but it doesn’t have to be challenging. Remember these three key tactics:

  1. Work with trusted real estate professionals;
  2. Educate clients on stages and security throughout the closing process; and
  3. Use industry-leading security tools to keep their most sensitive personal information safe.

Building out your support services for buyers and sellers will also build your credibility and cultivate loyal customers.

Looking for more ways to protect your business? Check out our free resource, Mortgage Payoffs Under Siege, where you’ll learn more about the prevalence of wire fraud in real estate transactions and how to protect your transactions. 

Matt Kilmartin

VP of Sales

Matt has over a decade of experience bringing disruptive Software-as-a-Service (SaaS) solutions to market in the automotive, MarTech, and real estate industries. He excels in high-growth tech companies with a passion for building and leading sales teams that deliver a memorable, consultative experience to prospective clients.‍

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