Reduce Your Liability in Real Estate with these 10 Best Practices
Do you have systems and best practices in place for your real estate business to reduce your overall liability and risk? If not, take a look at these ten strategies to implement or refine now to help manage the risk of potential litigation as well as complaints filed with the department of real estate or your local REALTOR Association.
- Provide Exceptional Customer Service!
Communicate. Communicate… often and with all parties in the transaction! Return phone calls, texts and emails promptly. Lack of communication is the biggest complaint from dissatisfied buyers and sellers. Implement great follow-up and update systems to let your clients know the current status of their listing, sale or escrow.
- Conduct Buyer and Seller Consultations
It is imperative to always conduct a thorough consultation and qualification with all buyers and sellers before you decide to move forward in a real estate transaction. This is when you set the expectations, learn more about your client’s expectations and communication preference and review the entire process.
- The paperwork is your best defense!
Keep a complete record of your transaction…including all contracts, addenda, disclosures, forms, emails, texts, and correspondence. Create a file on your computer and your email to organize your correspondence and documents. Most companies are using a paperless transaction management system, but make sure you also have a complete backup stored somewhere safe. Scan your emails and store them online and/or on a backup device.
- The Rule of 3
Always recommend three vendors, contractors, attorneys, lenders, home inspectors, home warranty companies, lenders, etc. Consider creating a disclosure with the companies and service providers you recommend and having your clients sign and acknowledge the choices you presented.
- Get a Home Warranty and Home Inspection
Always recommend and encourage your clients to obtain a home inspection and a home warranty. If your client opts to waiver either, I highly recommend having at least three forms of documentation for your file stating they are aware of how important both of these areas and they are choosing to waive one or both.
- Disclose…Don’t Diagnose and Stay in Your Lane!
You are the real estate practitioner – not an inspector, engineer, attorney or CPA. Provide real estate advice and leave areas outside of your expertise to other professionals. Be the source of the source. Consider providing a resource document with links and information to everything from schools, zoning to crime statistics and more.
- Keep a Communication Log
Record your notes, conversations, and milestones. If red flags are raised during the transaction or you encounter challenges, it is particularly important to record the facts and events. If you are using a paperless transaction management system, scan and upload all of your notes, emails, and correspondence for your transactions. Keep a digital backup for yourself. Your CRM is a great place to keep notes and documents.
- Use email to confirm conversations
It seems texting has become the preferred method of communication for most people! It is imperative to leverage email to memorialize everything you deem important to the transaction. This includes verbal agreements, text messages, and proof of delivering copies of contracts and addenda. If your clients don’t use email, then mail copies of all the contracts and documents they sign via certified or registered mail or use an overnight service like FedEx.
- Implement a Listing and Sale Workflow or Checklist
There are many moving parts and tasks to attend to in a real estate transaction. Include any due diligence and contingency deadlines in your checklist. Choose a CRM that will assist you with automating and streamlining the workflow, reminding you of the next task and enhancing a great customer experience!
- Develop and use standard procedures for everyone.
Review fair housing rules and treat all prospects, customers, and clients honestly, fairly and equally. If it’s your personal policy to meet a prospect at your office, give your showing itinerary to your front desk admin and get a copy of the person’s driver’s license, then you better be doing that for everyone you work with!