To Arizona real estate brokers, Bob Bass is a good guy.
He's an Arizona real estate attorney who defends brokers. If you've had the opportunity to sit in on one of his classes, he instructs us on how to protect ourselves and our clients via applied risk reduction techniques.
(That's right. We protect our clients, we are all safer.) Here are some of the risk reduction techniques I've employed:
Start off with client selection. This is entirely manageable from our end. If you feel 'off' about a prospective client, ask more questions before you agree to do business with them. This is a critical time to make a good business decision that could have far reaching implications in either direction. And it's a lot easier to do early than late.
Here are some of my red flags where prospectives are concerned: As Jeff Foxworthy would say, "They might be a problem if . . ." :
They badmouth agents.
They are not willing to talk to a lender or show their source of funds.
They brag about suing, having sued or being willing to sue people.
They indicate they know more than you do about your business.
They declare 'their business' none of yours.
Please feel free to add your red flags if you wish! :)
To avoid misrepresentation, which is the most often-named in claims against brokers, be the provider of sources of information, not the source itself. Anything you pass along to consumers needs to be factual, which is a 'duh' but checking and double checking is a good practice. Every property is unique. It is feasible that one lot in a subdivision may require different utilities or have different zoning, even than the one across the street! Do your homework and pass the findings--with where from, who you talked to and their contact info--along to your client.
Learn to edit your e-mail communications and especially text messages. We zip those puppies off at stop lights or between meetings and sometimes in the midst of distractions. That won't excuse us should those words be recorded by you client (and they can be!) if they are ambiguous or misleading (and they can be!).
Remember:
Your words do not recede into the past after you hit the 'send' button. They advance into the future. Make sure it is not to haunt you. :)
Negligent referrals are a concern, We are all networking and our reach is very wide. Make sure it is clear to your client that you are suggesting, not endorsing. Advise your clients that they can search for an expert on their own and provide some search points to start from.
Failure to disclose is another hot spot for liability. If you are in doubt, talk to your broker. But the general rule is if you wonder if you should disclose, you probably should. :) Document disclosure and confirmation that your recipient received it.
Another really sticky issue is 'how much you should help as opposed to the client doing for themself' which goes to fiduciary duty but is also a huge liability risk. We are conditioned to be helpful and indeed, that is our greatest skill in this business. But the moment we begin doing for our client without their participation, we are on a slippery slope.
But we work with busy people who rely on us to keep it together, and THAT is our duty as well. How to do it all safely?
Whatever you are doing on behalf of your client or as part of a transaction, DOCUMENT it and ADVISE your client in writing. Get their acknowledgement in writing or document the date and time of your efforts. Track your e-mails and stay organized.
Use the 123 rule: Tell your client what you're gonna do--do it--then tell your client you did it.
Keep the time and date stamp on your computer accurate. Make sure you're in the right time zone (I know, another 'duh' but computers can get amnesia after an error or system restore. Be aware of what's going on in that lower left hand corner of your desktop. :)
Home Warranty.
Home Inspection.
Survey.
Three of the best risk reduction applications of all!