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Real Estate Brokerage

Reducing brokerage liability (how not to lose a quick million)

You don’t know what you don’t know, brokers. Truly, there are always more ways to safeguard your company and your information.

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Brokers who don’t actively manage their company’s information security practices could be on the hook for a lot of money – in the case of one West Coast brokerage, $1.5 million – and, like many of their peers, find their reputation ruined. The media likes to dramatize the story whenever a brokerage has a security breach. One recent TV story, while trashing a broker’s reputation, seems to have been going for a literary prize:

“The paper trail stretched for blocks, billowing in the cold breeze on Columbus Avenue. It was not litter but bits and pieces of people’s lives.”

Now that’s drama! But it’s drama that your brokerage can avoid – here’s how:

Train your agents on how to manage the physical security of client information in their mobile and home office environments – and also train them on many of the other best practices that follow in this article to reduce brokerage liability:

Manage the physical security of sensitive information

Keep sensitive information physically secure – that goes for paper, hard drives and flash drives, computers and mobile devices. Keep it all in a locked cabinet – ideally in a locked room – when unattended, and be especially careful with it when you are mobile. Use a cross-cut shredder to dispose of items you no longer need.

Most publicized security breaches in our industry happen because of a physical security breach rather than a computer security issue.

Use secure software to manage sensitive information

Use professional-grade document and transaction management tools – not Dropbox! Make sure good information security practices are a part of your contracts for websites and software; this is a requirement in some states.

Create and protect strong passwords

Use passwords with letters, numbers, and punctuation – at least eight characters long – and use unique passwords for different applications. Ideally, change your passwords every 120-180 days. Also, never write passwords down (unless you lock up the paper very securely), change your passwords now and again, and don’t share your passwords. 

If you use a password management program or “remember password” features, be aware they aren’t ideal: if someone gets physical access to your device and/or learns your one master password, they’ll have access to all of your passwords. To protect your accounts, don’t forget to log out when you’re done using a computer, website, or other resource.

Configure computers for security and keep them updated

If you use a PC, test your settings and security patches using Windows Update, the Microsoft Baseline tool and Secunia PSI. If you have a Mac, there are no equivalents beyond the App Store updater – but Apple does have some configuration guides. Don’t slack off on installing security patches!

Configure mobile devices for security and keep them updated

At the very least, require a difficult to guess password to use the device, use the encryption features, and set Bluetooth to “hidden mode” or disabled when not in use. Be very careful to limit installation of third party “apps” to those created by reputable companies.

Install antivirus software

No antivirus software can protect you from all viruses, but it’s a good idea to install it as a reasonable precaution. On the PC, leading vendors are Microsoft, AVG, Avast!, ESET, McAfee, and Norton. On the Mac: Avast! or ESET. On Android: AVG, Trend Micro, and Kaspersky. On Symbian or Windows Mobile devices: Kaspersky. Sadly, there isn’t a reputable antivirus solution available for Apple iOS mobile devices yet.

Use encryption

Encryption makes information that anyone can read into something that is unreadable unless one has the right “key.” This way, the information doesn’t fall into the wrong hands. Encrypted information may be stored on a hard drive or flash drives, attached to an email, or sent over the internet. Every type of computer, email program, file transfer program, and wireless router has its own method for implementing encryption – see this article about encryption for real estate professionals and/or “Google” for more information on your specific situation.

Establish policies and procedures

Policies define what behavior regarding the protection of sensitive information is expected and what behavior is not allowed. They eliminate the “ignorance” excuse — “I didn’t know that I had to shred files before getting rid of them!” — and negligence is well defined. Many draft policies are available online. Policy management must include at least employee and contractor education, monitoring, enforcement and regular re-evaluation and revision.

Set up a secure office network

The office should have a firewall, configured to only allow essential incoming and outgoing network traffic and to protect internal computers from those of visiting agents – and all of those from portable computers brought in by clients. Ideally the firewall should also allow for secure remote network access for key staff, have an intrusion prevention system, and also provide web filtering to help prevent visits to malicious websites. If wireless networking is provided, the access point should have a strong administrator password and use WPA2 encryption.

Create a Written Information Security Program (WISP)

Create a document formalizing how you are minimizing the risks:

  • Identify who at your company is responsible for information security
  • Identify reasonably foreseeable risks. Are you only collecting and keeping information you need? How will you prevent terminated employees from accessing sensitive information? Are you contracting for information security with technology vendors?
  • Develop policies for the location and both physical and electronic security of records
  • How are you monitoring compliance with the best practices you’ve outlined?

The following PDF is a fine example WISP provided by the state of Massachusetts.

Have a security audit performed

The only way to know if all reasonable steps are being taken is to have a professional security audit performed. Ideally third parties you work with (web site creators and hosts, document and transaction management system providers, statistics providers, broker back office system providers, etc.) have their own audits performed regularly at their own expense, and if they don’t, this is something to consider adding to your contracts. It’s understood that many small brokerages can’t afford to have someone like me provide an audit – but hopefully some of the steps outlined in this article will help them minimize the risks on their own.

Prepare for an incident

No matter what steps you take, it’s possible that an information security incident will occur. Be prepared with the appropriate law enforcement, financial institution, and local computer forensics expert phone numbers. Consider the messaging your company will use if an incident will occur. A sample is included in this PDF document at the end of the “Plan Ahead” section. Keep all this information somewhere printed out – you may not be able to access it on your computer when you need it!

There is no such thing as eliminating all risk. Still, putting these policies and procedures in place at your company may prevent embarrassment, compromise, and financial loss. You do not want to be the broker with the TV cameras outside and a reporter waxing poetic about what you’ve let happen to your clients.

Matt Cohen has been with Clareity Consulting for over 17 years, consulting for many of the real estate industry’s top Associations, MLSs, franchises, large brokerages and technology companies. Many clients look to Matt for help with system selection and negotiation. Technology providers look to Matt for assistance with product planning, software design, quality assurance, usability, and information security assessments. Matt has spoken at many industry events, has been published as an author in Stefan Swanepoel’s “Trends” report and many other publications, and has been honored by Inman News, being listed as one of the 100 Most Influential Real Estate Leaders.

Real Estate Brokerage

How you can stick with your habits and actually achieve your goals

(BROKERAGE) Sticking to new habits can be tough, but there are ways to train your brain. We’ve got the deets on the best way to beat fatigue.

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Person typing on computer representing habits in our workday.

Just about every Sunday night I say to myself, “This week, I am going to eat better.” And, just about every Monday afternoon, I find myself cooking the same frozen pizza I always eat. Why is it so difficult for us to stick to our guns and really follow through on developing better habits? Well, if you’re anything like me, it’s mostly because doing what you’re used to is so much easier.

Trick of the trade

Each year I find myself being notorious for skipping out on my New Year’s resolutions, my fitness goals, and my attempts at reading one book per month. Right when I was beginning to feel completely fed up with myself, I found a trick that has helped me form habits and maintain behavior to accomplish my goals.

And, this trick is quite simple: accountability.

This can be found in the form of a friend or in the form of a planner or calendar.

Creating accountable ideas

I have thousands of ideas per day, many of which are fleeting. However, some ideas are about self-improvement.

For example, I often have the idea of beginning a workout routine. While I know that I should be doing daily exercise to increase my overall health, it can be a difficult task to stick with.

By developing this idea into something that I am accountable for, it makes me much more likely to stick with this habit. Let me explain…

Accountable for others

The two aforementioned methods of accountability, a friend or planner, can be used for the given workout example.

If you find a friend who can daylight as your workout buddy, you have someone that will motivate you and that you can motivate.

Now that you’ve made this friend your workout buddy, you have someone to hold you accountable if you miss a day. Gone would be the days where you could skip a workout and have no one to answer to.

Accountable for yourself

But, if you are a solo exerciser like myself, it can be difficult to find a method of accountability. What I have found works for me is taking my thought of, “I should workout,” and putting my goals down on paper.

By writing down a workout plan and the attached goals, it fosters a sense of tangibility.

I then create a calendar where I write down what exercise I want to do on what day, and, after I complete my goal, I am able to check it out.

For the accountability aspect, I like to put this calendar somewhere in everyday eyesight, so that I can’t ignore it. And, sure, I could easily throw it away and pretend it never existed in the first place, but I promise the act of writing out your goals will motivate completion.

In the end…

While sticking to habits can be a tricky business and different methods work for different people, developing an environment in which you hold accountability helps to inspire motivation.

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Real Estate Brokerage

Sales Exercise: Can you sell water as well as you can sell a house?

(BROKERAGE) Spice up your office life! Create a friendly office competition and see if the sales prowess is limited to just homes.

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Here’s a fun way to shake up the daily grind at your brokerage and give your team a chance to practice their skills: a one-day sales challenge.

Choose a random day of the week to cancel all other plans and have the competition. It will be even more fun if you don’t warn your team – just spring it on them. Before you do, make sure no one is working up to any pressing deadlines.

How to play

Divide your staff into teams and give them the challenge of selling a tangible product. One group in Chicago sold bottles of water. Have the teams decide how much inventory they would like, with the rule that they can’t buy more later. It’s up to the teams to decide how much to charge for each unit.

This will challenge the teams to estimate how much inventory they think they can move

Overconfident teams may end up with too much inventory, while others will sell out quickly and may wish they had sold at a higher price, or had bought more to start with.

If you’d like, you can let teams that sell out quickly negotiate to buy extra inventory from teams that overbought.

Send your teams out to the streets and see how much they can sell in one day. Celebrate with a happy hour at the end of the day where you compare remaining inventories and net profits, congratulate the winners, and discuss lessons learned.

The benefits

This is a great challenge for encouraging teamwork. Teams have to communicate, make decisions, and make sales cooperatively. The competition and the time limit put the pressure on, but since it’s just a game, it’s also low stakes and there is no real risk.

Teams have to rely on their own skills, rather than the pre-existing systems of your business.

A sales challenge is obviously a great way to practice sales. Many Realtors are great at marketing or negotiation, but that doesn’t necessarily mean they can nail it when it comes to sales. The challenge can also help identify star salespeople, even in departments where you might not expect.

What’s to lose?

Bonus points for blogging about the challenge. Show your customers some of the personalities behind your company and celebrate the unsung sales heroes of your team.

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Real Estate Brokerage

3 important things to consider before you pivot your business model

(BROKERAGE) Many businesses have had to pivot during the global pandemic but maybe yours isn’t one of them. Consider these questions first!

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Team discussing the pivot of a business model.

When Ross asked Rachel and Chandler (Friends TV show 1994-2004) to move a couch, many of us will never forget his voice inflection and how many times he yelled “PIVOT”! It’s actually a really funny scene and if you’ve never seen it, it might be worth 3.5 minutes of your time. Ross had the best of intentions by starting with a sketch and enlisting help from friends but even that ends up in hilarity as getting his couch into his apartment doesn’t work and he ends up being offered $4 when he tries to return it (stay for the end of the clip).

The best plans and intentions for your business are often met with what the market and customers demand, where technology grows, and where your ROI is the best. You often know that your original plans will grow and evolve, even in the uncertainty and now… a global pandemic.

Many entrepreneurs and small businesses have had to lean on technology to add virtual services (or expand their offerings) to meet our current norm where people are just not out and about like they used to be. Some have seen this work well and others have had to completely re-design their offerings to maintain safe and socially distanced considerations.

The thing is, businesses that have pivoted are being highlighted. But it is also worth looking at what has worked for some businesses that didn’t have to completely shift their strategies in 2020. It is likely that they had to adapt but maybe not a ridiculous Ross-type “pivot” that resulted in a complete failure of the mission.

Harvard Business Review (HBR) shared an incredible article, “You Don’t Have to Pivot in a Crisis” with great insights about what to consider if you think you need to make changes or if you want reassurance you are still on the right track.

HBR shares a powerful thought:

“The lesson here is that when a crisis hits, it pays to resist knee-jerk reactions on how to handle external shocks and ask what is going to work best for your company, based on the particular realities of its business. Ignoring the playbook of rapid cuts plus strategic pivoting can be the smart move… However, staying the course doesn’t mean inaction.”

Here are three thought-starters you may want to consider for your business:

  1. What product line or service is best serving your customers right now? Is that one of your strongest and/or could it use some attention?
  2. What product line or service is not quite meeting your needs or customer demands at the moment that had seemingly always worked (not forever! Just right now)? For example, in-person gatherings and promotions like events, conferences, trade shows.
  3. Is there something you’ve always wanted to explore? And could now be a great time since people want things more virtually? Examples: Selling branded swag, workbooks, content subscriptions, educational webinars.

These are three simple things but could help point you in the right direction of where to focus your time and energy – at least for now. You may not need a complete re-design or to take a new road, it might be some tweaks and adjustments to hang on to what you’ve worked so hard to build.

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