In today’s litigious society, brokerages need to be using an online transaction management system for regulatory review and risk reduction. Whether your brokerage uses a proprietary system or pays to use one like SkySlope, you should be using a system that can manage mass amounts of emails and files of paperwork.
Depending on the location of your brokerage, associations and departments of real estate have different requirements. If you’re a large brokerage, you need to be careful of what it is that you require in each file. If you require too much, you’re setting yourself up for failure—it will be challenging to collect and verify each document. You should have a system in place that allows you to require a certain amount of standard documents in each sale file that the brokerage has to fulfill every single time. Every transaction can vary. For example, if you represent the buyer, include the buyer advisory; if there’s sewer or septic, include that disclosure. Use a system that allows flexibility with each particular transaction.
From a risk management standpoint, brokerages should use everyday tasks to inform and educate agents. A system that notifies the agent when he/she misses a document in a purchase contract and sends the agent what they’re missing, and why they need it, acts as an educational tool.
At HomeSmart, our system has a feature called Quick Codes that allows the brokerage to enter a shortcut, which sends a particular consistent message every time, which is very important when you’re with a large brokerage. Quick Codes provides the broker with the ability to quickly and effectively notify the agent of what they’re missing and why it’s necessary. Use contract review as an education tool—agents will know not to make the same errors again.
It is important to have systems and processes in place, like Quick Codes, that drive compliance. When a broker applies for errors and omissions (E&O) insurance, the insurer checks to see if the brokerage’s files are compliant and is looking to see what processes are in place to ensure regulatory protocol is followed. The systems make it easier for the insurance broker, who shops the marketplace, to apply on their behalf.
Something we do to ensure risk reduction is offer agents a zero E&O insurance deductible if they have four required documents in file: State Approved Contract, Seller Property Disclosure Statement, proof they offered the buyer a home warranty and the Buyer Inspection Notice Seller Response Form (B.I.N.S.R.). This special offer gives our agents reason to double check their files and make sure the documents are filled out correctly. As a result, our E&O claim is incredibly low.
Tech, people and process reduce risk. If your systems provide access to paperwork online and make processes efficient for brokers so they can spend more time responding to agents; your brokers are responsive and pick up the phone immediately to answer agent questions; and agents have the ability to self-service, then you minimize risk and maximize compliance.
Complying with the regulatory boards is easy with a system that allows brokers and agents to find what they need, reproduce it, or save and print. Is your brokerage doing what it can to support compliance?
For more information, please visit HomeSmart.com/YesYouCan.
Trudy Moore, a licensee in Arizona for 33 years, is the Designated Broker at HomeSmart. In her role, she leads a team of Managing Brokers, oversees 5,800+ licensees and teaches continuing education classes. For more information about joining HomeSmart as an agent, visit Homesmart.com/join, or visit HomeSmart.com/Franchising for franchising opportunities.
For the latest real estate news and trends, bookmark RISMedia.com.