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Data Security and Compliance in the Real Estate Landscape: A Look at Contact Management Solutions

Contacts+ Team | December 27, 2023

Real estate professionals, from property managers, realtors, and brokers to system administrators and CTOs — handle a wealth of sensitive personal information every day. 

Even if you’re responsible with your customers’ data, no one is immune to phishing scams, ransomware, and human error. These security concerns have the potential to put your customers’ data at risk and even take down the entire business if it results in a lawsuit.

A secure contact management system can help safeguard sensitive information, keeping both individuals and businesses safe from the disastrous fallout of a data breach. But there are also extensive steps you can take to audit, monitor, and improve your organization’s data safety. 

Here’s an overview of everything you need to know about data security and compliance in the real estate industry. Whether you’re new to real estate or a seasoned pro, technology isn’t going anywhere, so now’s the time to ensure your business’s data and customer data are safe and secure.

Data Security Challenges in Real Estate

Every day, real estate professionals collect and store more customer data. From basics like names and addresses to private information like social security numbers and bank account information, the sheer volume of data is staggering. Many businesses employ dedicated cybersecurity professionals or a CTO to ensure compliance.

There have been a number of high-profile data breaches in the real estate industry to date. For example, in May of this year, a Pennsylvania real estate firm was subject to a ransomware attack that compromised data from 319,500 individuals. And just this month, the national realtor’s database (MLS) was hacked, disrupting the real estate industry.

Although the digital world offers a ton of convenience and power to the modern real estate professional, data security is certainly one of its shortcomings. And if you’re not a tech expert, the notion of getting compliant might feel overwhelming. 

Where do you start? We put together a list of initial cybersecurity steps you and your team can take to set your business up for success.

Learn about compliance requirements. You can’t know where you’re going if you don’t know where to start. What are the specific compliance requirements in your geographic location? Are you bound by GDPR or the California Consumer Privacy Act (CCPA)? What data handling guidelines exist for your type of business or location?

Research the consequences of non-compliance and potential legal repercussions. In some cases, you can be fined in the millions, so it’s worth it to do some research. If you’re in a technology role and need to secure buy-in for a cybersecurity plan from an executive, it can be helpful to show the potential cost or consequences to the business.

Identify potential security vulnerabilities in your real estate data ecosystem. Conduct a data security audit of your entire technology ecosystem. This includes your network, apps, devices, operating systems, and people (third-party service providers included). If a full audit is beyond the scope of your expertise, there are security audit tools and companies or consultants who can help.

Designate security and confidentiality best practices. Implement access controls and role-based permissions. Add encryption or two-factor authentication whenever possible to protect against unauthorized access and breaches. It’s also wise to ensure data privacy during client communication or collaboration — which may look different depending on your role in real estate. For example, if you’re a real estate agent, you may have a process in place in which you always use a secure digital signing tool to capture and store sensitive customer data.

Identify opportunities to streamline and update your real estate software systems. Are you using outdated or siloed software to manage client data? The more you can securely integrate your systems, the better. Make a list of everything you’re using to handle client interactions, including CRM, transaction management, email, and resident or customer portals. Do your current systems include data synchronization and backup to prevent data loss?

If you plan on moving to a different platform or software solution, implement a data migration plan that will keep information secure throughout the transition.

Make a plan for mobile security. Mobile devices are par for the course in real estate operations today. However, greater mobility means a greater security risk — since loss and theft can happen in a split second. Do you have a bring-your-own-device policy that details security protocols? Does your CRM or other software have mobile-friendly security features? 

Determine your third-party sharing and compliance plan. Third parties, including vendors, contractors, and anyone else who isn’t employed by your organization, present a liability when it comes to data security. Whenever possible, have a data security section worked into your contracts that holds third parties accountable for any personal data they handle. Conduct due diligence before sharing data with external partners; in most cases, it’s best to only share as much as a third party needs to successfully do their job.

Monitor your organization for continuous compliance. Schedule and conduct regular security audits and assessments to identify vulnerabilities. Monitor data access and user activity to detect suspicious behavior — or employ software to do this for you. Make continuous improvements to your processes and technologies over time to enhance security measures. And don’t neglect to train your employees properly, either. Security protocols aren’t useful if no one is following them!

The Role of Contact Management Solutions

One surefire way to keep your customers’ data secure is to invest in a robust contact management solution or CRM. A contact management system for real estate helps you keep lead and customer data in one place. It stores and organizes communications from multiple channels — email, text, social media, and more. 

By having everything in one place and encrypted, you don’t have to worry about important data getting lost or stolen. But beyond its security benefits, a CRM is a powerful marketing and business management tool, as well.