If you are a real estate agent, you take justifiable pride in surmounting the profession’s many challenges. One hurdle you can do without is confronting a lawsuit. The errors and omissions coverage in your real estate insurance provides an essential safety net, but avoiding the expense and reputation damage of litigation is paramount. To that end, it pays to know what actions are putting your fellow agents in legal hot water.
1. Committing Fraud
According to the National Association of Realtors, the most common complaint filed against realtors involves fraud. These suits most often allege a failure to disclose defects in a property. Your solution boils down to two words: inspection and documentation. Thoroughly inspect the property, clearly document all shortcomings and get your client’s signature on the disclosure. You can further lower your fraud risk by showing care in your buyer representation agreement.
2. Committing Breach of Contract
Breach of contract accusations frequently accompany fraud allegations. The solution is straightforward but unexciting: Carefully walk through contracts with your attorney, and show the same care stepping through the document with your client. It is understandable why agents yield to the temptation to rush through these tasks. After all, the fun part of real estate is marketing the property. Take a moment to tick off the names of local agents facing lawsuits, and maintain your discipline.
3. Failing To Protect Client Data
Cybercrime is a threat to nearly every business, and real estate is no exception. Clients entrust you with sensitive information and violating that trust practically guarantees a lawsuit. Consider using a business-only smartphone to limit malware infections. Look for applications that offer end-to-end encryption to reduce risks for your cloud-stored documents. Though tedious, cybersecurity should now go on the agenda for your team meetings.
4. Failing To Recommend Inspections
With the consequences of litigation, a documented recommendation to perform a home inspection is a no-brainer. A general house inspection for buyers should be your minimum suggestion. With landscaping, sewer or structural issues, consider enlisting a professional engineer.
5. Giving Legal Advice
As a real estate agent, you should have a thorough knowledge of the laws governing your obligations. Likewise, you should know how to clearly explain your role to your client. On any other legal questions, tactfully direct your client to seek the advice of an attorney. If you are real estate veteran, you may very well know the law better than some attorneys. Nonetheless, this is one area where it is better to stay humble and stay out of court.
In real estate, as with most businesses, money likes speed. As you meet the daily challenges of the fast-paced real estate game, always give attention to the details that will keep you out of court.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need warehouse insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.