The security and privacy of consumer data in real estate transactions has become a red-hot issue now that more information is being exchanged and stored in computers and incidents of technology attacks are on the rise.

Companies need to manage their privacy and security policies more closely to improve consumer trust and protect themselves from lawsuits, according to experts who spoke yesterday during an International Association of Privacy Professionals audio conference on privacy and real estate marketing.

The increased vulnerability of computers to viruses and other attacks, increased use of computers in conducting real estate transactions and new consumer privacy legislation all contribute to real estate companies’ need to heighten their awareness of security issues and tighten their preventative security methods, the experts said.

Take an Inman Pulse survey on technology security.

“Clearly, in the real estate business, the Web is here,” said Richard Mendenhall, principal of consulting firm WMWorks in Columbia, Mo., and former president of the National Association of Realtors.

Mendenhall pointed to Web-use statistics in real estate transactions to illustrate why security and privacy issues are an imperative part of company business plans. Sixty percent of home buyers now view properties on the Internet and 79 percent of consumers who use the Web to shop for homes also find their Realtor online, according to NAR research. That higher level of usage speaks to the greater need for security systems and privacy protections.

Incidents of computer break-ins have escalated over the last few years, noted Mark Lesswing, VP of NAR’s Center for Real Estate Technology. He said nine new viruses have surfaced in the past week and 92 percent of respondents to a Computer Security Institute Survey reported attacks on computer systems.

Viruses can perform such nasty tricks as e-mailing consumer account information to an outside entity, he said. A company’s level of preventive security and its seriousness about protecting consumer data can greatly impact consumers’ decisions to do business with that company.

“Having security in place really does bring up the level of service,” Lesswing said.

He described security implementation as “painful,” but worth the time and money. Preventive security measures are much less costly than having to remedy a situation that arises from a security breach.

Companies should always use a firewall in their computer systems, regularly update anti-virus software and software patches and avoid installing malware, also called spyware, he suggested. Spyware programs, often installed as “extras” through other file sharing programs, can change the appearance of Web sites, alter settings, cause poor system performance and collect information from a computer, among other things.

“We want to reduce risk on the Internet. We want to demonstrate to consumers that we take care of their data,” he said.

Lesswing also suggested real estate companies regularly back up databases and test the backups. Companies also should have their security systems evaluated by a security expert and they should implement a disaster recovery plan.

NAR’s Realtor Secure program offers members a way to certify that they meet industry best practices by first performing a self-evaluation, then inviting a third-party security expert to assess a company’s security practices. The Realtor group launched the program last fall.

Darity Wesley, CEO and legal counsel of San Diego-based Privacy Solutions, explained how a company’s privacy plan of action encompasses security measures.

“It’s really not just about technology, it’s about people,” Wesley said.

Privacy policies minimize a company’s risk of liability and build trust with clients, she added. It’s important for companies to pay attention to consumer concerns about how they obtain consumer data and what they do with it.

Wesley suggest real estate companies create a “terms of use” policy to display on their Web sites.

“Post an online privacy policy and an offline privacy policy,” she said.

The Federal Trade Commission has made it clear that a company’s online privacy policy is assumed to govern its offline data collection practices as well, she added.

Send tips or feedback to; (510) 658-9252, ext.133.


Send a Letter to the Editor for publication.
Send a comment or news tip to our newsroom.
Please include the headline of the story.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription