DepositLink offers real estate agents and brokerages an alternative to handling down payments and other transfers via paper check or wire transfer.

While recent years have seen technology innovations transform homebuying and mortgage applications, money for residential real estate transactions continues to move primarily through bank wires and paper checks. 

“Most of the real estate transaction has been automated over the last 20 years or so,” said Jay Rooney, a long-time Greater Boston real estate agent and broker. “But the payments part was kind of a missing link.” 

Rooney, who described paper checks as the bane of his existence while in real estate, founded a financial technology company five years ago to develop a payments platform that digitally transfers funds throughout all stages of the real estate transaction.  

Known as DepositLink, the platform includes processes for real estate companies, law firms and title companies to transfer funds. While other businesses and industries have used payments platforms for years, Rooney said only a few companies have focused on bringing digital payments to the nuances of real estate transactions, which can vary from state to state. 

Fix for Fraud 

In addition to eliminating inefficiencies involved with handling and transporting paper checks, Rooney said, DepositLink also addresses concerns tied to bank wire transfers for real estate. 

“Wire fraud is rampant in the residential real estate space,” he said. “Real estate companies, law firms [and] certainly title companies are scared straight by bank wires now because there are hundreds of millions of dollars per year lost.” 

Much of that fraud happens through business email compromise scams, where victims receive what appear to be legitimate instructions to transfer funds. The FBI received nearly 20,000 BEC complaints, many involving real estate, in 2021, according to its annual internet crime report. Losses last year totaled nearly $2.4 billion, a 28 percent increase over 2020. 

Last month, a Belgium resident with an Illinois law license received a nine-year prison sentence following a trial in Boston federal court for running multiple fraud schemes across several states. Two of the schemes involved residential real estate transactions in Massachusetts. 

In the nearly three years since DepositLink went live, Rooney said the platform has not lost any funds to fraud. DepositLink uses payments processor Dwolla to transfer through the ACH network and Plaid for account verification. DepositLink’s process includes verification that accounts have funds available for transfer.  

After its founding in 2017, DepositLink launched near the end of 2019 and entered the pandemic with just a few clients. As with many fintechs, DepositLink saw its business grow amid the constraints brought on by the pandemic, and the company ended 2020 with nearly 150 clients across the U.S. 

DepositLink has now grown to more than 700 clients, including Century 21, Coldwell Banker, Compass, EXIT Realty, eXp Realty, Keller Williams, RE/MAX and William Raveis.  

The company, which has its headquarters in Dorchester, raised $3 million during a funding round that closed in August. Rooney said the funds were used to support the company’s fast growth. Even with economic conditions crimping the real estate market, Rooney said the company has continued to grow. 

‘A Game-Changer’

DepositLink’s first client was Leading Edge Real Estate, which was involved with the platform’s testing.  

Leading Edge CEO Linda O’Koniewski called DepositLink a “game-changer” for the company, which has several offices around Greater Boston and Southern New Hampshire. She said the platform brings the security of knowing funds are available and eliminates inefficiencies with handling and delivering paper checks.  

Diane McLaughlin

The platform also comes with reporting functions that have improved accounting and tracking processes, O’Koniewski said. She added that Leading Edge plans to make using DepositLink mandatory for all transactions beginning in January. 

“I don’t want to go back,” O’Koniewski. “I think it was long overdue to be able to move money easier.” 

Rooney’s goals for DepositLink, which can also be used for rental transactions, includes seeing nearly the entire residential real estate industry adopt digital payments. He noted that digital payments will become critical for younger clients, who often do not have checkbooks. 

“It’s not a matter of if – it’s a matter of when – the industry as a whole has to adopt this kind of technology,” Rooney said. “Our goal really is to eliminate the inefficiencies and liabilities that come with managing paper checks and bank wires.”