Nationwide Cyberattack Disrupts Real Estate Industry

August 12, 2023

News

Nationwide Cyberattack Disrupts Real Estate Industry

In an unprecedented series of events, a nationwide cyberattack has crippled the Multiple Listing Services (MLS) across various regions in the United States. The attack has left tens of thousands of real estate agents scrambling and has put new home listings and sales on hold.

The Cyberattack: An Alleged Ransomware Attack

Target and Nature: The cyberattack targeted Rapattoni Corp, a California-based company that provides software and data services for more than 100 MLSs nationwide. The attack is alleged to be a ransomware attack, meaning that the attackers are holding the system and data hostage until they are paid a ransom.
Ransom Dilemma: Even if the ransom is paid, there is no guarantee that the attackers will give the keys back to the owners of the systems. This adds a layer of complexity and uncertainty to the situation, as organizations must weigh the risks and ethical considerations of paying the ransom against the potential ongoing disruption.
Timing: The attack seems to have occurred late Tuesday or Wednesday, affecting various regions differently.
Extent: The attack has left MLSs down across the nation, with no clear ETA for a fix in some areas.

Impact on Real Estate Agents, Homebuyers, Appraisers, and Sellers

Inability to List Properties: Agents have been unable to list houses for sale, advertise open houses, or update listings as "sold" or "pending."
Sellers Shut Out: Sellers, especially those who were planning on listing their homes this week, are shut out due to the attack and are unable to launch their homes on the market. The real kicker is sellers who listed their homes just before the outage - they are unable to advertise and syndicate their open houses to the hundreds of sites the MLS links to. This situation has turned into a disaster for many, creating frustration and uncertainty in a market that is already challenged with low activity, high interest rates, and insurance issues.
Appraisers Unable to Complete Reports: The cyberattack has also had a significant impact on appraisers, who rely heavily on MLS data to complete their reports for banks.
Alternative Solutions: Some agents are resorting to social media, word of mouth, and temporary Facebook groups to spread information about new listings.

Regional Impacts

Bay Area: The ransomware cyber-attack left MLS down across the country, affecting new property listings and open houses. Agents spoke about the unfortunate timing of the MLS being down right before school begins and significant dates like Labor Day.
Cincinnati: Thousands of Real Estate Agents and homebuyers have been shut out of the local housing market in Cincinnati. The Cincinnati MLS, serving about 6,000 Real Estate Agents, was still down as of early Friday morning.
Nationwide: The attack has left tens of thousands of agents in affected MLSs unable to update listings. Rapattoni serves about 5% of US MLSs, focusing on organizations under 10,000 subscribers.

Concerns About Personal Information

Access to Credit Card Data: In addition to providing an MLS platform, Rapattoni provides association membership management software, leading to concerns about access to credit card data.
Privacy Measures: Some associations have taken steps to reassure members and encourage them to monitor their financial statements.

Moving Forward

Switching Providers: Some regions, like Cincinnati, are considering stepping up the timetable for switching to new vendors, such as New York-based Perchwell.
Community Support: Despite the challenges, there is a sense of community and support among Real Estate Agents, reflecting a strong sense of solidarity within the industry.

The ransomware attack on MLSs has shaken the real estate industry, but it's also shown its ability to adapt and pull together. Real estate professionals are finding creative ways to keep business moving, and efforts are in full swing to fix the issues. This is a developing story...

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