Pearl Insurance Risk Management Expert and Corporate Training Manager Paul Espinosa recently spoke at the Greensboro Regional REALTORS® Association Luncheon on March 1, 2011. In the following video, he offers his top five problem areas for real estate agents:
4. Recommend expert inspections from reputable and qualified specialists. Recommend a qualified home inspection. Advise that the inspection company or other consultant have E&O insurance. Provide choices for the client. Counsel clients before the inspection. A home inspection is none of the following: appraisal, pest control certification, certification of any kind, FHA/VA inspection or a warranty. A home inspection is a resource for clients to make decisions of two kinds: immediate and during the course of ownership regarding maintenance. Urge the buyers to go on the inspection with the inspector. If the buyers waive inspections, get your recommendation and their waiver in writing.
1. Why is it so important to document your files, keep notes, and maintain records? When you are sued by your clients possibly years after the transaction and they have selective memory—this way you have documentation on the advice and counsel you gave them (admissible evidence). It also helps you remember what you did and what you said. Pride of authorship (specificity) is the key. Use confirming letters, “chron logs,” emails, mobile phone logs, etc. Get key points in writing and do so before escrow closes. Treat your files as if you will get sued. Recognize that the statute of limitations for fraud (in California) is three years and four years for breach of fiduciary duty; both from the date of discovery.
Tip 12 of 12 Risk Reduction Techniques for your daily real estate practice
Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.
Tip 12: Maintain a well-documented file.
A well-documented file should include the date and time of all meetings or phone conversations, emails and faxes, and records of all verified information, contracts, disclosures, waivers, and closing documents with appropriate signatures. It is important to note that you should never sign anything for your clients or customers. (WARNING: Do not destroy your file following a closing. Some states have statutes of limitations of 10 years for breach of contract, and many lawsuits are brought years after a transaction has closed.)
That’s our last of 12 Risk Reduction Techniques! By implementing these simple risk reduction tips, your documents will support your story of the transaction the next time a claim is filed against you—and odds are, the claim will be dropped. Attorneys don’t want to fight irrefutable evidence. When transaction files are complete and contain clear, concise, and accurate information, you are better protected from frivolous claims and can avoid having to pay costly attorney fees and settlements. Make it your firm’s mission to promote loss prevention awareness starting today!
And don’t forget to check out our other Real Estate Errors & Omissions blog posts; we have information on risk management training for your agents, using disclosure forms, what to look for in buying an E&O policy, real estate trends, and more. If you have any comments regarding keeping a well documented file or any of our other Risk Reduction Tips, please share them below. We’d love to hear from you!
Tip 11 of 12 Risk Reduction Techniques for your daily real estate practice
Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.
Tip 11: Avoid overstated adjectives.
When discussing, marketing, or otherwise promoting a property, avoid adjectives (such as “renovated”) that could exaggerate improvements to a property. When stating facts about the age or structure of the roof and/or property, be certain the information you are providing is accurate.
Stay tuned—we have just one more risk reduction tip to to post before you have all 12. Pay attention to these important risk avoiding techniques to help in your daily real estate practice! And check out our other blog posts; we have information on risk management training for your agents, using disclosure forms, what to look for in buying an E&O policy, real estate trends, and more. If you have any comments regarding tricky questions customers sometimes ask, please share them below. We’d love to hear from you!
Tip 10 of 12 Risk Reduction Techniques for your daily real estate practice
Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.
Tip 10: Report all claims and incidents to your insurance company promptly.
If you are aware of a potential claim situation or have had a claim reported against you, you must report it to your insurance company immediately. Late reporting may jeopardize your E&O coverage!
Stay tuned for more—we have 2 more risk reduction tips to help you in your daily real estate practice! And check out our other blog posts; we have information on risk management training for your agents, using disclosure forms, what to look for in buying an E&O policy, real estate trends, and more. If you have any comments regarding tricky questions customers sometimes ask, please share them below. We’d love to hear from you!
Tip 9 of 12 Risk Reduction Techniques for your daily real estate practice
Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.
Tip 9: Seek Assistance When You’re Not Sure
Don’t be afraid to say, “I don’t know” to your clients if you are not sure about something. It is better to take the time to look up the facts or ask someone who would know the answer, rather than supplying faulty information. Just remember to follow up with them and document your findings in writing.
Stay tuned for more—we have 3 more risk reduction tips to help you in your daily real estate practice! And check out our other blog posts; we have information on risk management training for your agents, using disclosure forms, what to look for in buying an E&O policy, real estate trends, and more. If you have any comments regarding tricky questions customers sometimes ask, please share them below. We’d love to hear from you!
Tip 8 of 12 Risk Reduction Techniques for your daily real estate practice
Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.
Tip 8: Review the Code of Ethics regularly.
As a REALTOR®, you have agreed to abide by a strict Code of Ethics to help maintain the highest standard of integrity among real estate professionals. To find the most current Code of Ethics and Standards of Practice, visit the National Association of REALTORS website at www.realtor.org.
Stay tuned for more—we have 4 more risk reduction tips to help you in your daily real estate practice! And check out our other blog posts; we have information on risk management training for your agents, using disclosure forms, what to look for in buying an E&O policy, real estate trends, and more. If you have any comments regarding the Code of Ethics, please share them below. We’d love to hear from you!
Tip 7 of 12 Risk Reduction Techniques for your daily real estate practice
Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.
Tip 7: Familiarize yourself with fair housing laws.
Become familiar with and educate buyers and sellers about fair housing laws. Avoid using words and phrases in a discriminatory context in conversations and advertising. Never work with a discriminatory seller or buyer, and provide equal service to all.
Stay tuned for more—we have 5 more risk reduction tips to help you in your daily real estate practice! And check out our other blog posts; we have information on risk management training for your agents, using disclosure forms, what to look for in buying an E&O policy, and more. If you have ever encountered problems related to housing discrimination, please share. We’d love to hear from you!
Tip 6 of 12 Risk Reduction Techniques for your daily real estate practice
Controlling your Errors & Omissions should be the mission of all real estate professionals. That’s why we’ve compiled a list of 12 risk reduction techniques you can use to minimize your legal liability and maximize your earning potential.
Tip 6: Follow pre-established office procedures.
Every real estate office and professional should have a set of pre-established procedures to follow during transactions. Be sure to adhere to your office’s pre-established procedures or checklist to ensure you are maintaining a well-documented file.
Stay tuned for more—we have 6 more risk reduction tips to help you in your daily real estate practice! And check out our other blog posts; we have information on risk management training for your agents, using disclosure forms, what to look for in buying an E&O policy, and more. Have you ever been made aware that your office procedures were lacking, or does your office cover its assets by making sure you have easy-to-follow procedures? We’d love to hear from you!
© 2012. Pearl Insurance offers Errors & Omissions coverage and risk management solutions to real estate professionals, as well as timely news and trends involving REALTORS and real estate professionals.
