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Did you know that agent-owned property claims cost about 5 times more than an average real estate claim?
Flipping properties has become very popular in recent years, but for real estate professionals, there are additional concerns to consider before engaging in any agent-owned property transactions since they carry a much higher risk than typical third-party transactions. It’s more important than ever to know how your policy responds in the case of an agent-owned property claim.
Don’t wait until you’re faced with an agent-owned property claim to find out that you could have been covered with the claim had you followed the policy’s requirements. These requirements are typically activities that also provide additional protection and risk management. Some typical requirements include:
- Using standard real estate contracts
- Purchasing a home warranty or getting a signed waiver if the warranty is not purchased by the buyer
- Providing a completed sellers disclosure form signed by the seller and acknowledged by the buyer before closing
- Purchasing or recommending a home inspection and, if a home inspection is not performed, a written waiver should be signed by the buyer
Selling investment properties can be a lucrative business for real estate agents, but it’s good practice to be aware of the differences in coverage provided by E&O policies when it comes to this type of transaction.
The Code of Ethics and Standards of Practice of the National Association of REALTORS® guide real estate professionals and are designed to not only protect buyers and sellers, but also the agents and brokers themselves.
Pearl Insurance’s E&O policy provides broad coverage for the sale of agent-owned property. Talk to one of our representatives for additional information or visit https://realtors.pearlinsurance.com to learn more about what we have to offer.