10. Do not give legal advice, e.g., telling the buyer or seller that they should or should not initial the arbitration clause. Arbitration is a decision for the principal. Another example—don’t attempt to explain the legal ramifications of the liquidated damages clause. Consider referring your client to an attorney where appropriate. Answering questions like “What does this mean?” carries liability.

11. Stick to your specialty. Even the best agents cannot be all-knowing about all properties. You will be considered to know more about the area that you farm and/or your “specialty.” This applies particularly with agents’ services relative to short sales, REO properties, and foreclosures.

12. Review preliminary title reports carefully and as soon as possible.

13. Use standard forms and procedures. The supervising broker should be monitoring your contracts to ensure that what you have written is clear. An important general rule affecting any contract is that vagueness is construed against the party responsible for the ambiguity.

http://realestateeo.com/extras/lisa-riggins-disclaimer.html

On a football team every player understands their role. If there is confusion, there is loss of opportunity. The same goes for sales, says Manny Schatz, principal of Professional Builders Services.

Schatz and sales manager Cyd Vacio co-presented at the International Builders’ Show in Orlando Wednesday, describing the role real estate practitioners play in serving buyers while divulging essential tips on how to succeed in new homes sales.

Here are their 10 rules to follow:

http://www.realtor.org/RMODaily.nsf/pages/News2011011302?OpenDocument

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.

http://realestateeo.com/extras/lisa-riggins-disclaimer.html

3.  Do not speak carelessly. As a professional, a real estate licensee must exercise a higher degree of skill and diligence than a non-professional. Negligent misrepresentation is a major cause of lawsuits. Specifically, the broker is charged with more than a layman’s knowledge of the real estate business.
http://realestateeo.com/extras/lisa-riggins-disclaimer.html

2. Learn to be comfortable with your uncertainty. Know what hat you are wearing. If you do not know something, say so, and then get the answer from a qualified authority (from your principal).

http://realestateeo.com/extras/lisa-riggins-disclaimer.html

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.

http://realestateeo.com/extras/lisa-riggins-disclaimer.html

Make sure you can insure your home. Past claims can create difficulties for both buyers and sellers.

It pays to educate yourself about home insurance when you’re seeking affordable coverage. Here are some ways you can help yourself (from Insure.com):
• Find out the rules regarding home insurance renewals in your state. Some states exercise control over when an insurer can refuse to renew your policy. In Texas, for example, an insurer can’t refuse to renew your home insurance policy unless you’ve made three non-weather related claims within the past three years.
• Consider paying for small losses out of your own pocket. Insurers take notice of customers who submit too many small claims. If someone breaks into your house and steals your new TV, it might be better to go out and buy a new one at your own expense, particularly if you’ve had a claim or two within the past three years.
• Think twice before you call your agent or insurance company. If you are considering filing a claim, but aren’t sure, wait to make that call. The minute your insurer’s customer service representative logs your call, the insurer has opened up a file on that issue that will be tracked through its computer system.
• Shop around for coverage. If your insurer denies you a policy based on previous claims or the rates are simply unaffordable, don’t get discouraged. Obtain insurance quotes from at least three other insurers so you can compare premiums and coverage options. If you cannot get a home insurance policy, see if your state has a Fair Access to Insurance Requirements (FAIR) Plan. FAIR plans were created in the late 1960s to make property insurance more readily available to people who can’t obtain it from private insurers because their property is considered “high risk.” Learn more about FAIR plans from Insure.com.
• Raise your deductible and consolidate insurers. Consider raising your deductible in order to lower your premiums. Also, most companies will give you a discount if you insure both your car and home with them.
• Check your credit record. In addition to your past claims history, some states allow insurers to use your credit history to help them decide whether to issue you a policy.

There are two major property claim databases that contain loss history reports, C.L.U.E. (Comprehensive Loss Underwriting Exchange) and A-PLUS (Automated Property Loss Underwriting System). The C.L.U.E. database, owned by LexisNexis, allows insurance companies to access information on claims that have been filed within the last five years.

More home buyers—concerned about possible previous insurance losses experienced at a property they are considering—are requiring home sellers to provide a C.L.U.E. report as a contingency to a purchase offer. A C.L.U.E. Home Seller’s Disclosure Report is an independent source of information about insurance losses at an address within the past five years. If the home has not experienced a loss within the past 5 years, the report can provide comfort to a potential buyer.

The C.L.U.E. Home Seller’s Disclosure Report does not display information that a home seller may wish to keep private, such as Name, Social Security Number, and Date of Birth. It is available immediately via online delivery for the seller’s primary address or by mail for other properties the seller may own.

Unfortunately, a buyer can’t order a C.L.U.E. report if they are not yet the homeowner. Prospective buyers aren’t allowed to request a C.L.U.E. report for a home they want to purchase, but as an agent, you may want to advise your clients to request one as a condition of the sale.

The C.L.U.E. database tracks numerous “causes of loss” showing why a claim was submitted to a property/casualty insurer for payment, including:

• Contamination
• Damage to property of others
• Dog bite
• Earthquake
• Fire
• Flood
• Freezing water
• Hail
• Liability
• Lightning
• Medical payment
• Slip/fall
• Smoke
• Theft/burglary
• Vandalism
• Water damage
• Wind
• Workers compensation

Are you on the fence regarding whether or not you need Errors and Omissions Insurance to protect you in your daily real estate business practices? Sometimes, no matter how careful you are to manage your risk in your day-to-day operations, you still get sued because of a forgotten detail or a minor misstep. Here are the Top 5 Reasons you need real estate E&O coverage!

Considering venturing into the lucrative—if you can handle the extra workload—life of short sales? Roger Higle, course writer for Keller Williams University, Keller Williams Realty International in Austin, Texas, asks four top distressed property agents how they became successful at selling short sales and REOs in A Peek into the World of Short Sales and REOs.

According to Higle’s experts, seller qualification is very important in short sales. A seller must be very forthcoming with his financial situation, have the work ethic to produce the many documents required by banks to make a short sale successful, and trust his agent’s advice and expertise to make the short sale happen. Short sale lead generation is much like traditional lead generation, with one exception: asking the seller a very direct and sometimes unsettling question, “Are you behind in your mortgage payments?”

Lending institutions are now expecting more from agents than ever before. It’s the agent doing a lot of the work that a bank previously performed, resulting in additional overhead for the selling agent. Agents are also taking on additional risk. Since bank-owned properties are typically sold “as is,” agents need to really consider the risks of unforeseen defects and other problems with the properties—and to have all lender contracts reviewed and to know what their E&O insurance will cover.

For the full article, visit A Peek into the World of Short Sales and REOs.