Three Tips for Managing REALTOR® Risk from Leslie Howatt of E&O
CATEGORY: Practice Tips
TAGS: Real Estate Errors and Omissions Insurance Corporation Real Estate Practice Risk Management
Whether it's home insurance for homeowners, life insurance for families, or business insurance for business owners, insurance is a big part of life.
Former international soccer star David Beckham reportedly had his legs insured for 195 million dollars. And it makes sense - if you've got something you value, you protect it.
But Beckham's protection of his assets extended beyond having good insurance coverage. Among other things, he spent hours on end training each week to ensure he was in the best physical shape possible to avoid injury.
Beckham's due diligence can serve as a lesson for REALTORS®, albeit on a slightly smaller scale.
While REALTORS® are equipped with insurance from the Real Estate Errors and Omissions Insurance Corporation (E&O), it's important they put in the work on a daily basis to represent their clients in the best way possible, and ultimately avoid "injury" to both their clients and themselves.
During Episode 1 of the Open House by BCREA podcast, we explored REALTOR® risk with Leslie Howatt, Executive Officer of E&O. She had a few simple reminders for how REALTORS® can manage risk on a daily basis:
- Know Your Product - There is nothing more important than knowing your product inside out. This means doing your due diligence. From title searches, to accurate details of materials and finishing, and reviewing strata minutes, leaving no stone unturned ensures you have the facts, and no one is left guessing.
- Know Your Client - Clients come with different backgrounds, levels of knowledge, and needs. Some might need more education on what it means to buy into a strata, others might need more understanding of Standard Forms. Knowing the needs of your client, crafting a plan, and having open lines of communication ensures you're both on the same page during a transaction, and there are no surprises down the road.
- Risk Shift - Sticking to your area of expertise ensures those with the most knowledge in a specific area are the ones carrying out that task. The best example of this is home inspections. There's a very good reason why home inspectors spend all their time doing home inspections: they're the experts. REALTORS® should know where they're experts and where they're not. And in the latter case, it's always best to defer to an expert.
An honourable mention goes to having good documentation. While it seems having proper documentation is a given, the importance of this practice cannot be understated if there is a point of confusion during, or after a transaction.
Listen to our entire conversation with Leslie, which includes an exploration of top risk areas and common claims from 2020:
For more on Episode 1 of Open House by BCREA, click here.
About Open House by BCREA
Open House by BCREA is a monthly podcast where REALTORS® in BC will find the latest real estate news and feature conversations with experts on issues related to real estate practice.
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