Real estate risk management involves open house safety, being transparent with clients, and being up to date with market trends. Since purchasing a home is the most significant investment most people will ever make, it puts real estate agents in a risky position. The stakes are high if a transaction does not go as planned. Real estate agents face a wide variety of risks with each transaction every day. That is why it is essential to have a robust risk management plan in place with the proper insurance policies, so unexpected instances will not impact your finances and career. Keep in mind that the housing market can make large swings, causing significant variations in your businesses and income.
Sellers market indicators:
- Heavy annual appreciation
- Low inventory levels, quick pace of sales
- Many properties selling for more than the list price
Buyers market indicators:
- Annual depreciation
- Slow pace of sales
- Frequent price cuts
- Quickly rising inventory
Keep an eye on national and state employment reports, as job markets impact real estate demand. Consider these common real estate risks exposures to better mitigate them.
Open House Accidents and Injuries
Homes located in desirable neighborhoods and that are competitively priced will likely bring large crowds to the open house, which drives up the likelihood of injuries. A house must be staged or prepared in a manner that allows for ample space for potential buyers to move around safely. For substantial properties, ask a colleague to help so you can keep a better eye on visitors. Depending on the situation, you could be held liable if a visitor becomes injured at a property you’re showing, which is why general liability insurance for real estate professionals is so important. This policy will also cover damage to a seller’s property during an open house.
Codes of Ethics Violations
You must disclose any property defects to buyers and provide accurate information about the property. Failure to do so can easily result in a lawsuit. Professional liability insurance is a safeguard against these kinds of accidents that causes client dissatisfaction. Also, if you store a client’s financial information digitally, consider securing cyber liability insurance to cover expenses associated with a data breach.
Real estate agents are held to a code of ethics and professional standards. If you violate these ethics, a buyer or seller can sue you. It is best to be open and transparent with clients throughout the entire transaction and have all the terms in writing. Augusta real estate insurance is a broad protection plan that can be tailored to your sector’s specific risk profile and needs.
You most likely spend a lot of your time on the road traveling to showings, client residences, or brokerage offices. In this business, it is essential to note that personal auto insurance policies will not typically cover damages brought on by an accident when driving for work-related purposes. You will need hired and non-owned auto insurance to cover personal vehicles that you use for work. This is a vital component of your real estate risk management plan. If you do not own the car you use for business, then you likely need commercial auto insurance to protect you from the expenses for damages you cause to other vehicles and the other party’s medical costs.
About Provident Protection Plus
At Provident Protection Plus, we have served the businesses and residents of New Jersey, New York, and Pennsylvania for more than 65 years. We are a wholly-owned subsidiary of Provident Bank, the region’s premier banking institution, and we are prepared to offer you personal, business, employee benefits, and risk management solutions. To learn more about our coverage options, contact our specialists today at (888) 990-0526.
Social title: Common Real Estate Risks
Social description: Those in the real estate industry are hopefully well aware that they are exposed to a wide variety of risks. Learning about the top risk exposures can be helpful in this business.