TWENTY TIPS TO HELP REALTORS® REDUCE THEIR RISKS

I. Conduct a careful visual inspection of each property you list or sell and document any

defects you find. Make sure you study the property carefully before a showing.

2. Investigate all “red flags” clues that might indicate a problem or defect.

3. Disclose all defects you identify to potential buyers and document details.

4. Disclose “Adverse Facts”. Anything affecting the Value of the property, the structural

integrity of the property or the health of occupants.

5. Inform sellers and buyers of the Tennessee Property Disclosure Law. Keep copies of

disclosures even though not required by law. Also, be aware that not all property

conditions or representations are covered by a standard property disclosure statement.

6. Disclose Environmental hazards and issues – lead based paint, mold, radon, asbestos,

contaminated ground water,

7. Answer all questions carefully. Don't exaggerate property descriptions.

8. When answering buyers' questions:

a. Clarify what is fact and what is opinion.

b. Indicate your sources for the facts you present - shift the risk!

c. When appropriate, recommend further professional opinions.

d. Avoid predicting the future.

9. Don't act outside your area of expertise. Refer parties to professionals or suggest when

the services of a professional should be utilized. Document your recommendations.

10. To avoid liability, don't make statements concerning structural soundness, condition of

appliances, size of lot, or anything else about which you do not have first-hand

knowledge.

11. Utilizing the services of professionals like home inspectors, pest inspectors, appraisers,

and engineers. Keep a list of professionals and routinely check the list for

qualifications and experience, including consumer complaints. Provide prospective

buyers with a list of three or more qualified inspectors. Remind them that you do not

warrant or guarantee the work of professionals

12. Know and follow Tennessee Agency Law in your relationships with all parties to real

estate transactions.

14. Make sure to disclose all conflicts of interest in writing. A well-documented file is often the

best defense against allegations of errors and omissions.

15. The Principal Brokers should educate all of the firm’s agents on procedures for reporting

potential incidents. The Principal Broker should review the firm’s procedures with all new

sales associates. The Principal Broker is responsible for all the transactions of the firm.

Yes, even in “100% firms”. Late reporting of a claim may jeopardize your Errors

and Omissions coverage.

16. Remember, your Errors and Omissions Insurance does not cover real estate transaction

when you are selling your own personal property nor when buying property for your own

personal account.

17. To avoid allegations of Discrimination:

a. Don't assume you know the buyers preferences.

b. Provide equal service to all.

c. Educate buyer and seller about fair housing laws.

d. Never work with a discriminatory seller or buyer.

e. Always display evidence of a commitment to compliance with fair housing laws.

f. Educate yourself on consequences and penalties of non-compliance.

18. Maintain written Office Procedures and review them frequently. Firmly established Office

Procedures, attention to detail and adherence to initiated Procedures by everyone in your

firm will assist in the reduction of errors and omissions claims.

19. Attend Agency and Risk Reduction courses at least every two years to keep up to date on

any changes in laws and pick up tips on how to reduce your risk.

20. Document all pertinent information. Documentation is critical to the prevention of

allegations of errors and omissions in the real estate profession.