Closinglock: Protecting Real Estate Transactions with Secure Payments
Users access real estate transaction wiring instructions through Closinglock's portal, rather than receiving them via email.
Closinglock, with $12M funding, aims to stop 1 in 10 real estate scams | ENBLE
🏠 Buying a home is a big step, as is handing over a large chunk of cash in order to do it. 💸💼 Depending on the title company, real estate transactions like this are done on paper with a check or through electronic wire transfer. While that is more convenient, one wrong number — or one spoof email — can send those tens or hundreds of thousands of dollars in the wrong direction.
🔒 Moving those funds in the right direction securely is what Closinglock wants to do. Founded in 2017 by Andy White and his wife, Abigail White, this Austin-based company aims to prevent real estate fraud and provide a secure platform for payment transfers. Abigail, who was in real estate, discovered that title companies often share payment transfer instructions via email. 📧
🏠 The inspiration for Closinglock came when a homebuyer almost lost all of their money in an email spoofing scam. Andy White, looking through his own real estate transaction records, realized how easily he could have fallen victim to the same scam. He recalls sending $25,000 to a random account number and routing number received via email, saying, “that was a lightbulb moment for me how easily I could have lost my life savings.”
💣 Unfortunately, real estate transactions have become a prime target for fraudsters. Outdated payment systems and communication methods have made it easier for fraud to occur. In fact, according to FBI data, one in ten real estate transactions in the United States is targeted for fraud. 🤯 More than 2,200 people claimed to be victims of real estate wire fraud in 2022, resulting in losses totaling over $446 million. And this figure has nearly doubled since 2020. 😱
⚙️ To combat this problem, Andy White, with his background in computer engineering, built the Closinglock platform. This platform acts as a fraud prevention and payments portal, providing a secure space for users to access wiring instructions and manage transactions. Instead of email, users log into the portal to receive wiring instructions, eliminating the risk of spoofed emails containing sensitive information.
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✨ Closinglock started as a bootstrapped venture, but the demand for their services grew rapidly. Today, the company has a team of 35 employees and has protected over $250 billion worth of transactions. The company’s revenue has doubled or tripled each year, demonstrating the effectiveness and value of their solution.
💰 In early 2023, Closinglock secured $4 million in seed funding and has recently raised an additional $12 million in Series A capital. This funding, led by Headline and supported by LiveOak Ventures and a group of strategic angel investors, brings the total raised to $16 million. The company plans to utilize this capital for product and technology development, as well as expanding their team.
🔮 Looking to the future, Andy White sees ample opportunities for growth. With roughly $2 trillion in residential real estate transactions still relying on outdated payment methods, Closinglock aims to revolutionize the industry. By focusing on the fintech side of real estate transactions, they hope to streamline the process and eliminate the risks associated with traditional payment methods.
👉 Q&A Content
Q: How does Closinglock ensure the security of payment transfers? A: Closinglock provides a secure payments portal where users can log in to view wiring instructions. This eliminates the risk of email spoofing and ensures that funds are directed to the right recipient securely.
Q: Can Closinglock prevent all types of real estate fraud? A: While Closinglock significantly reduces the risk of wire fraud in real estate transactions, it is important for users to remain vigilant and exercise caution throughout the process. It’s always a good idea to verify the legitimacy of the payment instructions and communicate directly with trusted parties involved in the transaction.
Q: What other services does Closinglock offer aside from secure payments? A: Closinglock’s platform also facilitates document exchange, identity verification, and payment management. By consolidating these services into one secure portal, Closinglock makes the real estate transaction process more efficient and less susceptible to fraud.
Q: How does Closinglock plan to evolve in the future? A: Closinglock aims to leverage technology and fintech innovations to further enhance the real estate transaction process. By streamlining the movement of money in real estate transactions, they hope to eliminate the complexities and risks associated with traditional payment methods.
🔗 References:
- The last decade in real estate, and a peek into the next one
- One in 10 real estate transactions are targeted for fraud
- FBI data on real estate wire fraud
- No pen required: The digital future of real estate closings
📢 Now, it’s your turn! Share your thoughts on Closinglock and the importance of secure payments in real estate transactions. Let’s protect our hard-earned money while buying our dream homes! 💪✨
Don’t forget to share this article with your friends and family who are planning to enter the real estate market. Together, we can spread awareness and prevent real estate fraud. 🏠🔒
Image Source: Pixabay.
