Are you being too passive in your lead generation techniques? Are you putting your information out there and passively hoping for the buyers to come to you? Don’t fall into these “real estate sinkholes” by putting all your eggs in one marketing basket. You need to be proactive in your marketing and lead generation campaigns.
Real estate professionals are making the most of the recent housing market hurdles by using social media for real results. From sharing videos, listings or advice with their communities and prospective buyers or sellers, REALTORS are implementing new and effective ways to boost their business with a variety of social media tools. Read this article from Mashable.com to find new and innovative ways for real estate agents to get their message out.
From connecting with buyers and sellers to networking with industry peers and lending expert advice, there are many ways to utilize social media as a real estate professional. Are YOU using any of them?
Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving Documentation to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over misrepresentation.
A real estate agent listed and sold a residential property containing numerous defects. Because of the defects, the home was sold “as is” with a general “handy man special” comment published with the Multiple Listing Service.
Problem
Following the close of escrow, the buyer moved into the property and soon discovered the extent of renovation was more than he anticipated. He subsequently called the real estate agent and asked for copies of the transactional documents. A year later, the buyer filed a claim against the seller and agent, alleging he never received a copy of the seller’s property disclosure statement prior to the close of escrow and that the property had more defects than he was led to believe.
Mistake
Unfortunately, the real estate agent discarded his transaction files six months post-closing, along with the seller’s property disclosure statement naming the numerous defects.
Result
Without the transactional file, the agent was unable to prove that he had provided the seller’s property disclosure statement to the buyer, even though he specifically remembered faxing it to the buyer’s office.
Prevention
It is very important not to destroy your files following a closing. Some states have a statute of limitations of ten years for breach of contract, and many lawsuits are brought years after a transaction has closed. If your files support your story of the transaction, odds are any claim made against you will be dropped. Attorneys don’t want to fight irrefutable evidence. Remember to include in your files: 1) the date and time of all meetings or phone conversations and a list of all participants, 2) e-mails and faxes, and 3) verification that what you say and write is correct. Be sure to keep a record of all verified information, contracts, agency disclosures, seller disclosures, and closing documents with the appropriate signatures, and never sign anything for your client.
Do you have a similar story involving complaints regarding lost or destroyed files to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!
If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!
You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.
Good news for homebuyers and REALTORS: The Senate has approved an amendment to extend the tax credit closing deadline for those who were under contract by April 30! Read this article from Inman News to learn more.
According to real estate and lending experts, mortgage lenders will try to recoup their losses from home sales and foreclosures that did not return enough money. They will be suing homeowners who have ransacked their houses under foreclosure or who have walked away from underwater properties in order to discourage such behavior in the future.
Read the article in REALTOR Magazine here: http://www.realtor.org/rmodaily.nsf/pages/News2010060902.
Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving Documentation and Verbal Contracts to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over misrepresentation.
A homeowner listed a single-family house for sale and specifically excluded major appliances and window treatments from the listing—intending to negotiate those items after an offer was made. Three weeks later, a verbal offer was received from an agent representing two buyers for the house as listed. After a few days of negotiations over price, the sellers accepted the buyers’ offer and a sales contract was drawn up.
Problem
The day before the final closing, the sellers moved all their possessions out of the house—including all appliances and window treatments. The next day, during their final walk through, the buyers were surprised to find the appliances and window treatments missing. It was their understanding that both were included in the sale.
Mistake
When the buyers instructed their agent to make the initial offer on the house, they included a requirement that the purchase would include all existing appliances and window treatments. Unfortunately, the buyers’ agent failed to convey that contingency in the initial offer and subsequent negotiations only discussed the price of the house.
Result
When the error was discovered during the final walk through, the buyers’ agent promised she would replace the appliances and window treatments to prevent the sale from falling through. Based on that representation, the buyers went through with the closing and moved into the house. However, when the agent realized the cost of replacing the missing items would exceed $20,000, she reneged on her promise and the buyers sued. Ultimately, the agent relented and paid the buyers the cost of replacing the missing items plus their attorney’s fees.
Prevention
Many claims are the result of simple errors that are best avoided by implementing routine quality controls. In this case, a claim could have been avoided had the buyers’ agent double-checked the details and confirmed the terms of the offer in writing. Creating and following an internal “quality control” checklist will help mitigate the chances of a claim. Finally, be careful what you promise. Once the agent “promised” to replace the missing items, they created an agreement with the buyers that they would ultimately become obligated to fulfill.
Do you have a similar story involving a forgotten contingencies or verbal agreements to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!
If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!
You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.
Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving a Conflict of Interest to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over property you may purchase.
After completing a comparative market analysis, a Real Estate agent entered into a listing agreement with an owner of residential property. Shortly after signing the agreement, the agent expressed interest in purchasing the property himself and presented the seller with a purchase offer. The agent and seller agreed on a price and proceeded to close escrow.
Problem
The agent never placed the home into the Multiple Listing Service (MLS) and the price he paid for the property was significantly below its true market value. To make matters worse, the agent sold the property a short time later for approximately $30,000 more than what he paid.
Mistake
By neglecting to place the property into the MLS, the agent did not give the seller an opportunity to elicit the best possible sale price for the property—ultimately failing to put the best interest of his client first.
Result
The seller sued the agent and his broker, alleging they had taken advantage of her, and requested she be awarded compensatory and punitive damages. When the agent and broker turned the claim into their real estate errors & omissions insurance company, they were denied coverage because their policy did not offer protection for any individual or entity that had a financial interest in the purchase of property. In the end, the agent settled with the seller for $30,000 and incurred approximately $11,000 in legal expenses.
Prevention
The agent could have avoided professional and personal claims against him and his broker by entering the property into the MLS or by not purchasing it altogether. However, if he still decided to purchase the property, providing the seller with full disclosure of the potential conflict of interest prior to closing could have also prevented the claim from being made.
Most, if not all, real estate errors & omissions insurance policies do not cover situations where an individual or entity of a brokerage has a financial interest in the purchase of property. So before you enter into any unique transactions, familiarize yourself with the terms and conditions of your errors & omissions insurance policy, seek clarification on unclear terms and conditions, and consult with your insurance agent or carrier to ensure your transactions will be covered.
Do you have a similar story involving a Conflict of Interest or purchasing property to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!
If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!
You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.
Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving breach of Purchase Agreement to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over a simple matter of lack of communication.
A homeowner placed a house on the market through an agent affiliated with a local broker. At the time of the listing, the house was occupied by the seller’s grown children. A buyer, represented by an agent with the same broker, made an offer on the house, which the seller accepted. The buyer made an earnest money deposit of $2,500 held by the seller’s agent. The Purchase Agreement stated that the seller was not required to make any repair under $300.
Problem
The transaction began to break down over the home inspection process. The buyer wanted repairs on a number of items he claimed were damaged by the seller’s children. The seller had relied on the repair clause in the Purchase Agreement that relieves him of responsibility for repairs under $300. Nevertheless, the seller offered to complete some of the repairs under $300. This led the buyer to request even more, resulting in the exchange of 17 conversations over the repairs. As a result, the buyer refused to attend the closing.
Mistake
Both agents took a passive approach as the dispute escalated. The listing agent failed to adequately inform the seller of his rights and obligations under the Purchase Agreement. The buyer’s agent made no effort to rein in the expectations and demands of his client until it was too late.
Result
The buyer’s failure to appear at the closing caused the seller to take legal action, suing him for breaching the terms of the Purchase Agreement and refusing to close on the home. The seller also sued his agent for not adequately representing him, failing to enforce the terms of the Purchase Agreement, failing to inform the buyer of his limited liability for repairs under the Agreement, and for allowing negotiations for repairs to continue. The buyer demanded compensatory damages and the earnest money being held by his agent. Ultimately, the earnest money was turned over to the seller and an additional modest sum was paid by the buyer and broker to settle the case.
Prevention
Both agents should have been more involved throughout the transaction and the dispute over repairs. Being aware of discrepancies allows you to stay on top of situations, which could potentially spiral out of control. Yielding responsibility for resolution of disputes leaves an open invitation for problems to arise. Remember your representation responsibilities and keep your client informed of their rights and obligations throughout the selling/buying process. Temper expectations that don’t conform with agreements or common sense. Your prompt and intelligent response to issues like this could prevent considerable loss.
Do you have a similar story involving a breach in a Purchase Agreement to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!
If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!
You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.
If you think discrimination in real estate is a thing of the past, you may want to think again. Read this The New York Times article on a real-life case of discrimination that happened recently in two Bronx neighborhoods. We hope you’ve enjoyed reading our risk management tips and resources for April – Fair Housing Month. Be sure to remain diligent on managing your risk and avoiding legal issues by following the National Association of REALTORS® Code of Ethics and having a quality Errors and Omissions Insurance policy in place—like those offered by Pearl Insurance!
Sometimes the past is one of the best learning tools around! Use the following Real-Life Errors & Omissions Claim Situation involving discrimination to avoid a similar legal showdown happening to you in your everyday real estate career. And be sure to have a good Real Estate E&O Insurance policy in place to protect you in case you find yourself in the middle of a court battle over fair housing regulations.
A real estate agent was hired by a landlord to lease a single-family home. In response to a newspaper advertisement, a woman called the agent and made arrangements to see the property. Satisfied that she and her family would be comfortable living there, an application was completed and submitted with a deposit.
Problem
Despite the fact that a background check revealed the applicant was gainfully employed and had an excellent credit rating, the landlord instructed the real estate agent to ask for more rent than advertised after learning the woman had five children.
Mistake
When the agent conveyed the intentions of the landlord in an email, it was a clear violation of Title VII of the Civil Rights Act of 1968, as amended by the Fair Housing Act of 1988.
Result
The applicant sued the landlord and the agent alleging familial discrimination against her and her children when they were denied the opportunity to rent the property for the amount advertised based solely on the number of children. In the face of damaging email evidence, the agent’s attorney had no alternative but to stipulate that a technical Fair Housing Act violation took place. Left with no viable defense, the case was resolved with a relatively substantial monetary payment.
Prevention
Prohibited practices that lead to fair housing claims include the refusal to rent, lease, or negotiate; offering different terms or affording different treatment; keeping records describing clients/customers; and failing to make reasonable accommodations. Being familiar with the laws while providing equal service to all will reduce the possibility of discrimination claims. Working with a discriminatory landlord can lead to claims alleging civil rights violations—especially if one doesn’t know or realize that a violation is taking place.
Do you have a similar story involving fair housing and discrimination to share with us? Send us your learning experience or just let us know what you think about this one! Just leave a reply below!
If you have any questions about Pearl’s Errors & Omissions Insurance for real estate professionals, give us a call at 800.447.4982—whether you’re looking for a new E&O policy or have questions about your current one. We’d love to hear from you!
You can also visit www.pearlinsurance.com/eo to find out more about our quality Errors & Omissions program, including policy features, risk management tools, and much more.
