Houses in San Francisco showing cyber attack disrupts real estate industry

Rapattoni Cyber Attack Disrupts The Real Estate Industry

A cyber attack on a multiple listing service (MLS) has disrupted real estate operations nationwide in the US.

A multiple listing service allows real estate professionals to access and update properties in the market, connect with buyers and sellers, and cooperate with others.

The compromised MLS Rapattoni Corporation, which servers over 100 MLS providers nationwide, said it was investigating the attack and that data security, confidentiality, and privacy were a priority.

However, the MLS provider did not address speculations that the incident was a ransomware attack, where the attacker encrypts the victim’s data and demands payment in exchange for a decryption key.

Real estate agents resort to manual systems after the Rapattoni cyber attack

Rapattoni said it was doing everything possible to resolve the cyber attack despite giving no definite timeline.

“All technical resources at our disposal are continuing to work around the clock through the weekend until this matter is resolved,” Rapattoni posted on X, formerly Twitter. “We still do not have an ETA at this time, but we will continue to update you and keep you informed of our efforts.”

Meanwhile, local MLS providers dependent on Rapattoni could not access, add, or update property listing information and resorted to manual processes.

Real estate agents could not track property online as the information on listing websites was not updated, and buyers could not discover new houses.

Subsequently, fewer buyers showed up for open houses, reducing competition for available houses and affecting their prices.

Some realtors resorted to manual systems and old-school real estate marketing tactics like cold-calling buyers or passing flyers, while others started sharing property information on social media.

However, the North Bay Business Journal reported that Sacramento’s MetroList Services had disconnected its data from Rapattoni before the cyber attack spread.

MetroList provided the Bay Area Real Estate Information Service (BAREIS) and San Francisco MLS access to its archived data, reducing the impact of the cyber attack.

BAREIS implemented a temporary system to serve its 8,200 users, although the information was not updated. Karen Holmgren, President and CEO of BAREIS, said the MLS was working with “alternative databases” to access updated information in the affected regions.

However, others like Cincy MLS were not forewarned about the cyber attack and lost access to housing information altogether.

Similarly, nationwide real estate multiple listing services such as Zillow, which depends on regional MLS providers like Rapattoni, were affected by the attack, affecting the reliability in regions affected.

Financial impact of cyber attack on real estate sector

San Francisco Association of Realtors CEO Walt Baczkowski said the cyber attack had inconvenienced and frustrated real estate professionals.

Some listing agents feared losing data and starting afresh, while the financial impact on brokers dependent on regular commissions was unbearable. With the cost of a data breach estimated at $4.35 million, cyber-attacks pose an existential threat to most businesses.

Nevertheless, the cyber attack’s impact was minimized since the Californian real estate market was at its seasonal low.

However, the incident shows that cybercriminals are targeting the real estate industry for the vast amount of personal and financial information (including of wealthy individuals) it holds and the cost of disruption or data loss.

Similarly, large online transactions make them lucrative targets for business email compromise and wire fraud.