grunting through the paper trail? Or, do you picture the pro with the gift for gab, the Wonder Kid of real estate property elocution; the kind who is succinct at the art of playing matchmaker between buyer and property?

This kind of pro who is on his game and off the charts doesn’t worry about documentation. Why? He’s too busy leaving prospective buyers in a state of shock, mouths agape, standing frozen to the cherry wood stained floors, eyes shining with the gaze of remembrance of things past – as the Wonder Kid has brought him back to the very home he now stands in, as if – it would seem – it has been time-traveled straight from his childhood into the present and reconstructed for him alone.

“I’ll take it. Whatever the cost.”

Watch it. This hotshot is the poster child for being taken advantage of. Small details overlooked could yield expensive results. It is important to remember that in a litigious society, no one is exempt from liability, but there are precautions that can be taken. But before we get into the steps to safeguard your professional reputation, we can discuss the reasons why the trend toward litigation is growing in leaps and bounds, particularly in this industry.

Alternative Financing Options – are great at making the dream of homeownership a reality for many Americans, but they are increasing convolution of transactions. With so many cooks in the kitchen expecting a payout, when deals fall flat it creates a mecca for litigious opportunities.

Merging, Acquisition and Consolidating - of real estate companies is wreaking havoc on data systems and the organization of information. This increases chances for important pieces of data to fall through the cracks and create gaps in the paper trail. Without documentation, it often comes down to classic “He Said, She Said” cases.

Increase Call for Further Documentation – of all transactions and an overall record of the entire process is throwing more curve balls at real estate sales agents who may be hiring small armies to assist them in capturing the meticulous details. Example: If a home warranty is suggested verbally by the seller, it’s a good idea to get in writing the buyer turned it down. Otherwise, realtors may be upping the ante for risking a home warranty lawsuit.

Realtors as Sitting Ducks- Many realtors end up the natural scapegoat as blame customarily defaults on them. For instance, this happens through property defects being disclosed after the sale is made - however unintentional - the consensus for litigation typically implies the realtor had been aware of the flaw.

Risk Management for Every Realtor

• Recommend a home inspection
• Develop improved documentation pracices
• Practice clarity in communication
• Be fair
  

Suggesting a home inspection is practical and builds trust. Most new homeowners will not miss the logic in this and will agree. Those who refuse should sign a waiver which documents their decision to decline. In this way, you will be free from harm should it turn out their is a household sytem or appliance in need of repair, in the future. Should the new owner become recalcitrant and make false claims suggesting you had never recommended the inspection, you have it in writing and their is no case.

What else can you do to cover ward off the threat of legal pursuit? Start with a property disclosure form and use a standard sales contract. Make sure your staff is detail-oriented and on top of their game with record-keeping. Wording in all documents should be as to the point as possible as ambiguous language presents more opportunity for debate. Like any other transaction involving the exchange of currency, it is not advisable to carry through transactions with friends or family members.

The Last thing a realtor can do to thwart the possibility of legal pursuit is simple enough: always observe a high code of ethics and carry all business transactions with integrity. Keep the slate clean and the untarnished reputation will surely follow. Stick to higher ground, and remember, the threat of litigation will always loom in the not-too-far-off distance - so do what you can to avert legal pursuit.

Next steps: Liberty Home Protection Article:
Don’t Miss out on the American Home Warranty Phenomenon