Cyber criminals aim to take advantage of those who aren’t familiar with the nuances of the closing process.

Younger home buyers who don’t have prior experience in the real estate market may be more naive to the red flags of wire fraud. That’s why scammers likely are targeting first-time buyers, which means you need to beef up on cybersecurity best practices and share ways to thwart common hacking threats with these clients. The threats are real: About half of title and settlement agents report receiving at least one phishing email a month with fraudulent wire instructions, according to a recent survey from the American Land Title Association.

A new generation of home buyers and sellers must learn to be alert to the dangers, says ALTA CEO Diane Tomb, who spoke with REALTOR® Magazine about the increasing threats.

What makes first-time buyers most vulnerable to wire fraud?

Tomb: First-time home buyers, who are not as familiar with the nuances of the closing process, are often the most vulnerable to scams because they don’t know what to look out for. Even though many are digitally savvy, cybercriminals have become more sophisticated over the last decade and are willing to wait for weeks or even months to strike. These fraudsters will often use fake emails, phone numbers or websites to impersonate a trusted real estate professional.

How do you explain how a wire fraud scheme works to clients?

Tomb: Wire transfer fraud, where home buyers are tricked into wiring a down payment or closing costs to an escrow account controlled by criminals, is by far the most common real estate scam impacting first-time buyers. Most often, cyber criminals begin with a common social engineering technique called “phishing.” By tricking a future buyer into inputting their private information or clicking a link, hackers then steal their login and password information. Once hackers gain access to an email account, they will monitor messages to see if the person is in the process of buying a home. Then, they use the stolen information to email fraudulent wire transfer instructions disguised to appear as if they came from a trusted real estate professional.

What can real estate pros do to protect first-time buyers?

Tomb: We know through experience that increased consumer awareness and educational efforts by real estate professionals lead to fewer victims. Real estate attorneys and title companies should continue to educate their customers on these scams, including putting consumer warnings on websites and communications, securing email communications, and sending notices to consumers and real estate agents informing them of the scams.

©National Association of REALTORS®
Reprinted with permission

As a conduit to consumers, you can help technology developers understand how their products are—or are not—meeting homeowners’ needs.

Imagine you’re a Florida property owner with an electric car and an EV charging station at home. You may be at the forefront of the electrification trend in real estate. But if you were in the path of Hurricane Ian in September and lost power, this burgeoning technology did nothing to improve your circumstances during the storm. 

“Our grid is a piece of junk; it can’t withstand heat or a hurricane,” Shana Schlossberg, CEO of venture tech firm Upward Labs, said at the recent 2022 Innovation, Opportunity & Investment (iOi) Summit(link is external), which the National Association of REALTORS® hosted in Los Angeles. It doesn’t make sense to focus innovation toward greater electrification—including EVs—without also focusing on building a sustainable grid, she said. 

But who’s telling this to the innovator? 

As a real estate professional with an intimate understanding of the interaction between homes and technology, you can. When new innovations come to the market, often what’s missing is the insight into how the user adapts to it. “Real estate professionals have this unique opportunity to be a conduit between the technology and the consumer, understanding what to do with that and how to make it actionable,” said Janine Sieja, senior vice president of product at Realtors Property Resource®(link is external). “You’re valuable in the technology food chain.” 

Charting an Ever-Shifting Future  

The iOi Summit is itself a venue for such cross-collaboration, drawing more than 400 real estate pros, innovators and investors annually to explore solutions for evolving real estate technology. This year’s iOi included a talk by leading futurist Thomas Frey, a discussion on how sustainability is driving innovation, a look at tech-focused legislation and a pitch battle featuring 12 tech startups vying for REALTOR® support to expand their market reach.

Attendees this year got a window into the rapidly increasing value of sustainability to future real estate technology solutions. “Sustainability is about preparedness for the future,” Schlossberg said. “If your building isn’t sustainable, you’re in trouble in the next few years because energy costs are going up. Suddenly, there’s a market for sustainable homes because of things like grants and rebates. Sustainability is going to be one of the best ways to make money going forward.” 

Perfecting technology requires an open mind, said keynote speaker Thomas Frey, a futurist and founder and executive director of the DaVinci Institute. Because our understanding of the future is constantly changing, so must our ideas of how technology can move us forward, he added. “How does the future get created? In our minds and the minds of everyone around us. … People make decisions today based on their understanding of what the future holds. If you change your vision of the future, you change the way you make decisions today.” 

Frey predicted that further advancements in autonomous vehicles, in particular, likely will impact homebuying behavior over the next decade. 

Dreamers vs. Skeptics 

Government policy will play a critical role, said Sam Love, director of business and politics newsletter Invariant. However, a disconnect between the technology industry and Capitol Hill is stalling legislation that could encourage more robust innovation, he said. “In the private sector, there’s balanced optimism about what tech could be doing to solve people’s problems,” Love said. “There’s bottomless skepticism in Congress; their interest is in protecting constituents.” 

REALTORS® must continue using their voice on the local, state and national levels to support legislation that benefits the expansion of technology to improve the real estate process, Love added. Lack of Broadband, for example, continues to have an impact on home sales in many places, particularly in rural communities. “In order for real estate professionals to sell homes, those homes need high-speed internet,” Love said. “REALTORS® have a lot of stake in other issues like data privacy, augmented reality and remote online notarization. It’s very important that REALTORS® remain engaged and that real estate has a voice in Washington.”

©National Association of REALTORS®
Reprinted with permission

NAR’s 2022 Technology Survey reveals the innovations members are using now and watching for the future.

REALTORS® believe cybersecurity, 5G and drones are the areas of technology that will have the most impact on the real estate business in the next two years, according to the National Association of REALTORS®’ 2022 Technology Survey. Nearly half of REALTORS® also believe the metaverse will have ramifications for real estate. Thirty-five percent say blockchain technology will “definitely” or “probably” have an impact.

The three tools REALTORS® say they currently use most in their business are e-signatures (79%), lockboxes (67%) and MLS apps and technology (67%), the survey shows. REALTORS® also say social media delivers the highest number of quality leads—even more than their CRM systems, digital ad campaigns or the MLS.

“It’s clear that technology plays a key role in our members’ lives and businesses,” says NAR CEO Bob Goldberg, noting the association’s efforts to keep REALTORS® on the cutting edge of real estate innovation. This year, NAR’s Innovation, Opportunity & Investment (iOi) Summit, for example, addressed how real estate pros can help tech developers improve their products. NAR also supports up-and-coming innovations in the real estate space through its REACH tech accelerator program. “NAR has its eyes on the future,” Goldberg says. “By partnering with innovation leaders and empowering REALTORS® with the latest technology, we’re driving the future of real estate and helping our members build staying power.”

How Much Do REALTORS® Spend on Tech?

With technology an essential part of real estate pros’ toolbox, many are spending more money to purchase and use solutions. About one in three REALTORS® say they spend between $50 to $250 per month in costs related to technology, while 19% say they spend more than $500 per month, according to the survey. The majority of those expenditures are for lead generation tools. The following chart shows how much REALTORS® are spending monthly on lead generation:

Survey respondents say that of the tech tools their brokerage provides, e-signatures, lockbox and showing technology, and transaction management systems are the most valuable. Some brokerages may charge a fee for this technology; 47% of respondents say their broker charges a “reasonable” fee while 38% say their broker does not charge a fee, according to the survey. “NAR continues to research, vet and champion the most promising new tech to ensure members remain at the forefront of new innovations and ideas,” Goldberg says. “At the heart of everything we do is an insatiable drive to empower our members by providing them with innovations that will impact their businesses for the better.”

©National Association of REALTORS®
Reprinted with permission

Much conversation revolves around outdoor air quality, but many factors—environmental and health-specific—bring indoor air quality to the forefront of the conversation as well. Maximize a home’s air quality with monitoring.

Increasingly, air quality—indoor and outdoor—is a prominent topic of discussion. To combat wildfires, smog and viruses, experts are talking about what measures to take to ensure that air quality is viable and healthy for us to breathe. This includes indoor air quality, a consideration that some have overlooked in past years.

Still, indoor air quality is an important component of a healthy household, which is why it should matter to you and to your clients. Unlike outdoor air quality, though, we don’t have meteorologists and weather apps monitoring it for us, telling us if it’s safe to go outside. That’s one of the reasons it’s important to have some basic knowledge of indoor air quality to help educate yourself and clients.

“During a given day, indoor air quality can fluctuate pretty significantly based on human activity,” says Oyvind Birkenes, CEO of Airthings, a company that sells indoor air quality monitors(link is external).

Factors such as the amount of people in the home and what’s being cooked can affect indoor air quality. Likewise, outdoor factors like disaster events and weather events and proximity to the natural environment or a city center can also affect indoor air quality. That’s why it’s important to have constant monitoring over time, says Roei Friedberg, CEO of Aura Air(link is external), an air purification company.

“Through real-time measurement, we can understand different trends and patterns and therefore provide users with actionable insights,” Friedberg explains.

This kind of measurement, done over time and consistently and the insights it provides, helps people make informed decisions.

“Monitoring air quality over time allows you to establish a baseline average that will illustrate whether you have a long-term problem or a short-term variation from the norm,” Birkenes says.

Air quality sensors are meant to measure a variety of factors to give you insight into the air quality of your home. These metrics give you a holistic view of the quality of air you breathe and can make educated decisions based on the information. To test this, we placed air quality sensors from Airthings, Amazon and Aqara around our home and tracked the various metrics over several months. Here’s what we found:

Air Quality Index

The air quality index is a basic measurement of overall air quality in a specific location or space. It ranges from 0 to 500; the higher the number, the worse the air quality. We found that each company’s device registered our home’s overall air quality index as good, but there were some external factors like construction on our home, the onset of seasonal allergens and other seasonal changes that made it worth digging into the more targeted measurements.

Humidity

One of the first issues we noticed in our house while testing these sensors in the winter was that the air in our house was dry, at around 20% humidity. The Mayo Clinic says that a comfortable humidity level for indoors should be between 30% and 50%. Lower levels can cause issues like dry skin and irritated noses. High levels can make people feel congested. Long-term high humidity levels can cause serious issues such as mold.

We installed a humidifier and found that our home has since consistently been at 45% humidity across the seasons. We also found that all three sensors did a good job of tracking and updating humidity changes and were on par with one another.

Volatile Organic Compounds

Volatile organic compounds are a large and diverse group of compounds that volatilize into the air at room temperature. In homes, VOCs are harmful air pollutants, coming from all kinds of household staples such as air fresheners, cleaners, carpeting and new furniture.

They are among the “most common sources of unhealthy indoor air quality” factors, says Bharti Patel, CTO for air filter and purification company Alen.

“With proper ventilation, one can usually mitigate VOCs from household chemicals and cleaning supplies,” Patel advises. “Open windows to bring in outdoor air to increase airflow and ventilation when painting or after a new carpet is installed. When cooking, always use the vent hood and ensure the vent hood filter is clean.”

Particulate Matter

PM 2.5 refers to fine particles with a diameter of 2.5 or smaller, which includes bacteria, fungi and emissions from coal, gas and oil combustion. PM 10, the largest particles typically monitored by air quality monitoring systems, have a diameter of 10 microns or smaller and include pollutants like pollen and pet dander. 

Radon

Radon is the second leading cause of lung cancer, which has prompted many states to require passive radon mitigation systems installed at the time of construction on new homes. Buyers are encouraged to conduct a radon test when they purchase a home.

The EPA(link is external) considers a level of over 4 pCi/L (picocuries per liter) to be elevated and require mitigation. The agency, however, also says that at this time, a safe level of radon exposure has not yet been determined, so any home with levels between 2 and 4 pCi/L should also be addressed.

At the moment, Airthings is the only consumer grade air quality monitoring system that detects radon and graphs it over time. The company recommends waiting 30 days to establish a baseline before taking any action based on the results. We built our home 3.5 years ago, so it has a passive mitigation system, and our radon levels are minimal. Still, I have had plenty of clients over the years find elevated levels which have been resolved with a mitigation system. Here in Minnesota, mitigation runs at about $1,200.

Carbon Dioxide

Carbon dioxide isn’t necessarily a bad thing. In fact, it’s a necessary part of the air we breathe. It’s when CO2 levels rise and overtake the amount of oxygen in a space that it becomes a problem. Too much CO2 can cause you to feel sleepy, tired or less focused. When it’s too high, it can be a serious health concern. Of the three systems we tested, we found that Airthings’ View Plus(link is external) model displays CO2 levels in parts per million and will notify the user if levels are elevated.

Monitoring Leads to Solutions

From allergens to pollutants, there are many invisible factors that can affect the quality of the air in your home, making a monitor a practical investment.

Installing and using an air quality monitor means you have the information you need to fix air quality issues that exist in your home. Being able to address air quality issues means your home is more comfortable and safer. Based on the data collected by your monitor, you’ll be able to determine what kind of solution is required.

©National Association of REALTORS®
Reprinted with permission

Despite an extremely volatile crypto market, one real estate pro says a decentralized financial system could help create more immediacy in housing transactions.

When she unexpectedly ran out of cash during a trip to Cuba, Kristin Smith knew her options for accessing more funds were limited. Without the ability to use a credit card or pull money from her U.S. bank account, Smith, an agent with Dave Perry-Miller Real Estate in Dallas, was told to call a contact in the U.S. who could transfer money to her via Western Union. Smith called her mother, who was immediately concerned. “I’m asking for money in Cuba,” Smith told attendees Saturday during a session at NAR NXT, The REALTOR® Experience(link is external) in Orlando, Fla. “[My mom is] asking, ‘Are you being held captive? Are you safe? Is this a ransom?’”

While the situation was eventually rectified, Smith found herself analyzing all the barriers she faced on the trip—which aren’t all that different from barriers when moving money around on the traditional market, she said. “What crypto is going to do is remove those barriers,” Smith posited. She offered a primer on the basic terminology related to cryptocurrency and its potential applications for real estate.

Important Terms in the Cryptocurrency World

• Cryptocurrency “is a digital currency in which transactions are verified and records are maintained by a decentralized system,” Smith said. The most commonly used forms of cryptocurrency are bitcoin and ethereum.
• Blockchain is the technology that enables cryptocurrency, acting as a shared, immutable ledger where you can record anything that is verifiable, including the title of a house.
• Within cryptocurrency, fungible tokens are interchangeable and identical, while non-fungible tokens each have a unique value. All bitcoins across the world have the same value, eds, are unique in nature and value.

Potential Cryptocurrency Applications in Real Estate

While cryptocurrency transactions in the real estate profession remain relatively uncommon, 12% of millennial home buyers sold cryptocurrency to fund their down payments in 2021, according to Redfin data. That stat underscores how popular and accessible cryptocurrency is with younger generations, Smith said.

A bigger opportunity could reside in putting title records, deeds and property surveys on the blockchain. Today’s county records are not all that different from blockchain, Smith said. Each title is recorded with the county, and when the title is sold, the county verifies and records that exchange. By adding title records to the blockchain, each record (or block) would be verified on the blockchain every ten minutes, said Smith. This could greatly speed up the time it takes to accurately verify title records and finalize transactions.

Smith predicts that over the next five years, REALTORS® will begin to see “double reporting,” as titles are recorded both with the county and on the blockchain. “I think the county [records] will slowly phase out because they’ll become a part of the blockchain,” she said.

Weighing the Volatility and Utility of Cryptocurrency

Smith did note that it’s “not the most fun to speak on crypto when the market is tanking,” referencing the collapse of FTX(link is external) last week. FTX was one of the world’s largest cryptocurrency exchanges until it filed for bankruptcy. Between its downfall and the volatility of the crypto market in general—bitcoin has traded at between $16,000 and $67,000 in the last year—many wonder if it’s wise for the real estate industry to normalize and advocate for cryptocurrency.

Smith, who is the chair of a National Association of REALTORS® presidential advisory group studying the impact of digital money in real estate, agrees that more information and guidance is needed. Her PAG is recommending the formation of a full NAR committee to look into cryptocurrency. “We should probably have a ‘decentralized finance’ committee,” Smith said.

The Future of Cryptocurrency in Real Estate

Until such a committee is created, Smith recommended that real estate pros use their best judgment when considering cryptocurrency investments or exchanges. “The number one thing to ask is: What is the utility of this? Does this actually do something?” This could help REALTORS® differentiate between an NFT, which Smith said has a more limited application and therefore more limited value, and the application for title and blockchain, which could fundamentally alter the title and real estate industries. “Why does a home transaction take thirty days? It’s the title search. If the title was on blockchain, transactions could be instant. This is your money; you should have it now,” Smith said.

©National Association of REALTORS®
Reprinted with permission

Smart home tech isn’t just for the single-family home. These systems and devices can improve property management, reduce cost and emissions and enhance the tenant experience.

Smart home tech in multifamily communities is quickly becoming a must-have for today’s discerning renter, and with good reason. The right technology can play a significant role in improving residents’ experiences and enhancing the ease of operations for onsite staff. But where to start? As apartment owners and operators consider which amenities to include—either for new builds or when retrofitting existing structures—they must consider what is going to enhance a resident’s experience the most and offer the most ROI.

Many of today’s easy-to-use tools improve the efficiency of property management. These modern conveniences also lend to a positive experience for tenants, providing them with more comfort and control. Smart home technology not only provides improvements that residents crave, but many tech solutions also come with the added benefit of reducing costs for the building owner and property manager.

Smart Access

Smart access begins with smart locks, which can be used in many ways and are appealing to owners, on-site staff and residents alike. These smart features provide a wealth of benefits for all:

Smart Locks Save Property Owners Money

Owners don’t have to worry about paying a locksmith to change out locks or keys between residents. Leasing agents no longer have the frustration that comes with finding the right key or fumbling with a pesky lockbox. And, in addition to saving significant time and money on key tracking systems that cost thousands of dollars, this eliminates physical keys getting lost, being replaced and keeping track of them as residents move in and out. Another benefit is that maintenance teams can work more efficiently and respond to maintenance requests faster.

Smart Locks Save On-Site Staff Time

At one point or another, on-site staff has had to help a resident who is locked out after hours. Smart locks eliminate this issue because residents can simply use their smartphones or enter their access code to unlock their units. For important safety tasks like annual fire inspections smart locks allow on-site to quickly access units with one-time codes. Management can also allow vendors like painters or carpet layers access to vacant units with these temporary codes, which is more secure.

Smart locks are also what make self-guided tours possible, freeing on-site staff to work smarter, not harder. Prospective renters can tour the unit whenever it’s convenient for them and property managers don’t have to plan their day around tours. Renters simply sign up, provide a copy of their IDs, then select the units they want to visit. Before the scheduled viewing, the prospect receives a unique access code to tour the property.

Smart Locks Provide Enhanced Security

Residents love how easy it is to use a smart lock and they have the added benefit of increased security. They can set their own passcodes and typically have access to their homes right from their smart phone. They no longer have to worry about whether they remembered to lock the door, because they can make sure they did—or lock their home—right from an app on their phones.

Many folks often need to share access with others when they are away such as dog walkers and house cleaners. The right smart lock can provide a special guest code for a secure way of offering resident unit access. Only persons with the right credentials get access to the unit.

Smart Locks are in-demand, which means renters will pay more for this amenity, making your property more competitive in the market. The increased retention rates and NOI drive up the value of your assets.

Smart Asset Preservation

One of the most overlooked benefits of added tech in a multifamily unit is the provided asset preservation. Much of the technology offered helps keep your buildings and units in tip-top shape whether they’re occupied or not. Today’s smart home technology allows for things like water sensors that immediately detect leaks and excessive humidity that can be damaging to a property if not fixed quickly.

Leak sensors can be placed throughout an apartment where the most common leaks occur – like under the refrigerator, sinks, and water heater – and send out an alert if excess moisture is detected. You can also view how your building’s entire HVAC system, unit-by-unit, is working in a few swipes of a screen. A humidity detection feature on smart thermostats alerts management to situations like if a vendor accidentally leaves a window open in a vacant unit.

And this doesn’t just work with new buildings. Smart sensors can keep issues at bay in the ever popular and charming vintage buildings as well. Issues are reported directly to your on-site team so that something like a burst pipe in a unit where a tenant is out of town doesn’t become a major problem.

Smart Sustainability

Sustainability is a big topic for many companies, and smart home tech can help properties reduce their carbon footprint in several ways.

The smart sensors allow properties to collect energy consumption data for the full building— both vacant and occupied units— and track that data over time to determine carbon footprint impact. That data can then be used to adjust to lower impact. Smart thermostats not only provide residents with the ability to directly control the climate in their unit from virtually everywhere, but they are also extremely energy efficient, saving a ton of money and wasted energy.

Smart plugs and smart switches allow residents to automate control of their lighting or other wired appliances. Forget to shut the lights off before you leave? No problem. You can do it from your phone. These options mean less energy is wasted and electric bills are lowered.

Choosing the Right Tech

Though it’s gaining in popularity, smart home technology for multifamily units is not a new concept. Nest debuted over a decade ago Siri has been around for almost as long. Although the market has improved, it’s also become more crowded, making decisions about which systems to invest in a little more convoluted.

Ultimately, the best approach when implementing technology is to select an enterprise-level solution, because piecemeal solutions only add to the complexity of managing a property and require juggling multiple apps. Ideally, the provider would also use a single smart technology platform that allows users to control all smart devices through a single app and dashboard. The provider should also have on-site training for staff and residents months before installation, and offer 24/7 live support.

Property owners should look for a platform that offers robust integration capabilities, including multiple property management systems that can be implemented throughout a portfolio. It’s a good idea to start with a product platform demo and do some research, including gathering feedback or testimonials from the provider’s leading clients.

When selecting a smart technology partner or product brand, important things to consider are:

• How’s the customer service?
• Do they offer on-site training and 24/7 support?
• How easy is it to implement, maintain and use daily?
• Will it integrate seamlessly with existing software, and who will handle those integrations?
• Will this generate income and/or reduce expenses? How will it affect the NOI?

Keeping in mind what matters most to your residents and to your bottom line—access, preservation and sustainability—will set you on a course for success.

©National Association of REALTORS®
Reprinted with permission