According to The Wall Street Journal, the home ownership rate has stopped falling and Freddie Mac reports that mortgage interest rates are dropping more and more. These are both signs of an upturn in the real estate market. This means there are more deals being made and more chances for a real estate agent to be blamed for a sale falling through. An agent’s reputation could be damaged if a client thinks they are at fault for an unsuccessful sale, and a claim could be financially burdensome to the agent.
Lawrence Yun, National Association of Realtors Chief Economist, agrees that the market is beginning to improve, stating that, “Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand.” He adds, “Fewer sales in the lower price ranges are contributing to stronger increases in the median prices, but all of the home price measures now are showing positive movement and that is building confidence in the market.”
With more confidence in the real estate market, there is a strong push for real estate agents to get out there and sell, and Charlotte Insurance offers more than 21 years of experience in the real estate professional liability area. Our product targets real estate agents who derive at least 65% of their receipts from residential sales. We can also write up to 50 agents/brokers and up to $5 million in commission income.
Before the real estate market showed signs of improving, agents found ways to adapt in order to increase business. Some agents started to get involved in property management services, consulting services and notary services. Even as the market improves today, agents may still be involved in these services, which are all covered under our form.
Negligence and misrepresentation are two of the biggest exposures real estate agents face when involved in real estate transactions. For example, a couple consulted a real estate broker to purchase a residence in which they could also run a day care business. The broker made inquiries and showed them a townhouse, which they eventually purchased. After closing, the couple was told by the townhouse association that they were forbidden to use the property for a daycare business. The couple filed suit for negligence.
Without real estate errors and omissions coverage, a claim such as this can be devastating for an agent; however, the appropriate coverage can save their reputation. Additional Charlotte Insurance product features include $250,000 discrimination coverage, $50,000 lockbox and open house property damage coverage, named perils coverage for claims arising from use of Internet and e-mail and environmental pollutants coverage.
Forecasts predict the market to continue to stabilize, and you can help your real estate agents prepare for possible risks by offering errors and omissions coverage, as it is important to their success and reputation.