Risk Management for Real Estate Agents: 12 Best Practices
Interested in more details on this topic? Click here!
By Jan O'Brien
Developing best practices and incorporating the recommendations outlined below into your daily real estate business will significantly reduce your liability and help manage the risk of potential litigation as well as complaints filed with the department of real estate or your local REALTOR® Association.
- Develop and use standard procedures with everyone. Review fair housing rules and treat all prospects, customers and clients honestly, fairly and equally.
- Keep a communication log during your transaction. Record your notes, conversations, milestones. If red flags are raised during the transaction or you encounter challenges, it is particularly important to be record the facts and events. If you are using a paperless transaction management system, scan and upload all of your notes, emails and correspondence for your transactions.
- Use email to confirm conversations, verbal agreements, proof of delivering copies of contracts and addenda. If your clients don’t use email, then mail copies of all the contracts and documents they sign via certified or registered mail or us an overnight service like Fedex.
- Keep a record of your transaction…including all paperwork, emails and correspondence. Create a file on your computer and your email to organize your correspondence and documents. Scan your emails and store them online, on a backup device and/or in a paper file.
- Rule of three – always recommend three vendors, contractors, attorneys, lenders, home inspectors, home warranty companies, etc. Consider creating a disclosure with the companies and service providers you recommend and having your clients sign and acknowledge the choices you presented.
- Always recommend and encourage your clients obtain a home inspection and a home warranty. Get a written waiver if they choose not to.
- Disclose…Don’t Diagnose. Be the source of the source.
- Educate & set the proper expectations with your clients and customers… for example:
- Explain the short sale process; pros and cons of purchasing a short sale
- Review Earnest Money and what happens with a cancelled sale
- Conduct a seller and buyer interview/qualification with all clients
- When working with buyers, make sure buyer is ready, willing and able to purchase. If getting a loan, have they started the approval process with a lender? If cash buyer, do they have proof of funds?
- When working with sellers, ensure they are ready, willing and able to sell. With short sale sellers, ensure you have the sellers complete the short sale packet and all documentation before you list the property. Review and explain personal vs. real property; Arm’s Length transaction and other common issues with short sales.
- Use a checklist to stay on top of all the tasks in a real estate transaction. Include any due diligence and contingency deadlines.
- Communicate. Communicate. Communicate. Often and with all parties to the transaction! Return phone calls and emails promptly.
For more information, visit www.realtyonegroup.com.
Want instant access to great articles like this for your blog or newsletter? Check out our 30-day FREE trial of REsource
Licensed Real Estate Content Solutions. Need easy stay-in-touch e-Marketing solutions too? Try Pop-a-Note for 99 cents!
Join RISMedia on Twitter
to connect with us and share your thoughts on this and other topics.
Copyright© 2015 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com