| Distressed property broker specialists know that | | | | agency relationship with each client. If you are acting |
| performing broker price opinions is a possibility without | | | | as dual agent, by representing both buyer and seller in |
| transacting real estate owned. But transacting REO is | | | | a transaction, ensure this relationship is acknowledged |
| not a possibility without performing BPOs. | | | | and agreed-to in writing by both parties. |
| One of the main requirements in working REO and | | | | Make sure material facts are always brought to the |
| BPOs is that each broker has adequate errors and | | | | forefront of any transaction so you are not accused |
| omissions insurance coverage. E & O insures | | | | of failing to disclose relevant facts you would have or |
| principles in real property transactions that the licensee | | | | should have known. A material fact is one that would |
| has professional liability claim coverage. Most | | | | likely affect the conduct of a reasonable person, thus |
| corporate clients require $500,000 minimums and some | | | | affecting a buyer's decision to enter into a contract or |
| require loss limits of up to $1,000,000 per occurrence. | | | | affecting the price offered. |
| Obtaining a comprehensive E & O policy can be | | | | What specific business procedure basics can you |
| difficult, especially for those of us who own and | | | | employ to reduce E & O premiums? |
| operate our own shop. Broker/agents at large firms | | | | • Utilize seller and buyer disclosure forms |
| typically obtain E & O policies through their | | | | • Always use standardized contractual |
| brokerage's group insurance. Premiums are generally | | | | documents |
| deducted from an agent's transaction fees. | | | | • Utilize home warranties in your sale |
| What aspects of your business practice do | | | | transactions |
| underwriters analyze in order to determine your E | | | | • Recommend qualified home inspectors for |
| & O premiums? | | | | buyers |
| • Value of properties you sell | | | | The following companies are a few of the largest |
| • Individual transaction volumes | | | | errors and omissions insurance providers in the country |
| • Your gross revenues | | | | for licensed real estate professionals: |
| • Your formal risk management procedures | | | | • Sentry West Insurance Services, Salt Lake |
| Misrepresentation and failure to disclose are the two | | | | City, UT |
| most common professional claims associated with | | | | • Hartford Financial Products, Hartford, CT |
| licensed broker/agent business practices. To minimize | | | | • Travelers Insurance, St. |
| your liability, be sure you thoroughly disclose your | | | | |