Recovering from the economic recession has not been an easy task and the journey to a full recovery is by no means over. No industry has felt this more than the housing industry, which has made leaps and bounds toward that full recovery, but has recently stagnated.
Currently, only 10 states, as well as the District of Columbia, fall into a stable range. This means that only approximately 20% of the United States’ housing market is considered stable, compared to 90% at the same time last year. As the housing market continues to waver, it is important for you to avoid mistakes that would require real estate errors and omissions insurance.
First, ensure that you are covering your bases when you take on a new client. One of the easiest ways to ensure use of real estate errors and omissions insurance is to participate in discrimination against a client for whatever reason. Even if it is not bad intentioned, purposefully pushing a client toward or away from a particular neighborhood based on that neighborhood’s demographics is a sure way to open the door to a lawsuit.
One way to easily avoid this is to make sure that you are showing the client a variety of houses in a variety of different neighborhoods, regardless of the demographic makeup so that the client can make the decision themselves about whether the demographics of the neighborhood are important to him.
Another potential area for lawsuits lies in pretending to be an expert in an area that you’re not, such as financial advising or home inspecting. It is not your job to give advice in this area if you do not have the expertise because the home owner could come back and force you to have to utilize your real estate errors and omissions insurance by saying that you gave them misinformation.
There are many other factors to look into as a real estate agent, but these are a couple of the major ways that you can avoid a lawsuit based on your own, probably unintentional, error.