Sylvia returned from a Realtor Risk Management Course yesterday with all sorts of frightening and scary news. This was an MCE course (Mandatory Continuing Education) required to maintain her Broker’s License and the instructor was an attorney. After Sylvia rattled off the list of things we do that the attorney says we shouldn’t be doing, I couldn’t help but wonder what sort of industry this has become. This basic message from the attorney? – don’t be too helpful to clients or it can get you sued. I wonder how many Realtors actually follow this sort of advice and thereby provide less service to their clients because they are more concerned about being sued than they are helping people. I don’t buy it. We are Service Industry Professionals and should be, at all times, providing the best service we can to our real estate clients – even if doing so exposes us to a little more risk.
So what were some of the specific things the attorney said agents should NOT be doing?
The attorney at this Risk Management course says, as agents, we should stay completely out of the inspection process and leave it all between the Inspector and our Buyers. We should never refer the Buyer to just one inspector (even if we have a really good one we’ve always used), but should instead provide a list of at least three. Same with any other Vendor we refer – always give a list and never recommend just a single vendor. Under no circumstance, he says, should we do a walkthrough or even be present at the inspection. He says doing so opens us up to liability in case the Buyer later discovers defects that she thinks we should have noticed or “should have known about”, or thinks we referred a bad inspector, and then decides to sue us.
The attorney says our answer should always be “I don’t know” to questions such as “what sort of appreciation can we expect in this neighborhood” or “what has the appreciation been in this area the past year?” We should refer those questions to a third party source, according to the Risk Management Course, because if we offer an opinion that the Buyer relies on, and it turns out to be wrong, the Buyer might later sue us.
The attorney says we should always encourage Buyers to get a Home Warranty so that if an appliance breaks down shortly after closing, the Buyer will be covered and won’t be mad at us and therefore will be less likely to sue us.
Remember, this is an attorney teaching a Risk Management course, but my God!. Notice that, in an education course like this, it’s all about helping the agent avoid being sued. That’s fine, but the risk avoidance methods suggested are at the expense of the level and quality of service provided to the client. I know attorneys are paid to be cautious, but I have to disagree with this entirely.
