Top Ten Ways Real Estate Agents Can Sharply Reduce Their Professional Liability Exposure:

1. Register for InterNACHI's free, negligent referral protection plan for real estate agents.

   
   

2. Insist that your client hire a professional home inspector to inspect the property, and strongly recommend that the inspection also include ancillary inspections for the presence of wood-destroying insects, as well as harmful pathogens, such as mold and radon.

   
   

3. Take the time to manage your clients’ expectations of what can reasonably be discovered by a visual inspection of a property that is full of furniture, carpets and stored items that further physically restrict the scope of an already limited inspection.

   
   

4. Be sure to carry your own Professional Liability Insurance to protect yourself from allegations that you should have independently verified that the property was defect-free.

   
   

5. Review the inspector’s Pre-Inspection Agreement to make sure that it contains a Notice Clause that requires the buyers to notify the inspector within no more than 14 days of the discovery of any defect for which they believe he is responsible.

   
   

6. Avoid conflicts of interest.  Never recommend an inspector who participates in preferred vendor schemes.  All major inspector associations prohibit participation in such undue praise-purchasing schemes.  You have a fiduciary duty to recommend the very best inspectors based solely on merit, not money.  And it goes without saying that you should never recommend any inspector with whom you have a close personal or blood relationship.

   
   

7. Recommend the high-value inspector, not the low-price inspector.  Good inspectors charge accordingly.  Trying to save your client $100 on a home inspection could wind up costing them $10,000 in home repairs.

   
   

8. Only recommend inspectors who adhere to a strict Code of Ethics and Standards of Practice, such as members of InterNACHI.

   
   

9. Only recommend inspectors who participate in InterNACHI's We'll Buy Your Home Back Guarantee.

   
   

10. Always attend the home inspection. Many real estate agents have been advised never to attend a home inspection, allegedly by real estate attorneys. Agents who say that they have received such advice are never able to articulate its rationale. You are no less likely to be named in a lawsuit by hiding during the inspection, and the reasons for attending the inspection are quite compelling. First, your presence is a clear indication of your professionalism and concern for your client’s interests, two factors well-known to engender referrals. Secondly, it affords a very cogent opportunity to refocus your client’s attention to the limited nature of the inspection. For example, you could note the numerous obstacles, such as furniture, carpets and appliances, that can obviously inhibit the inspector’s ability to see certain areas of the home. Finally, should this transaction come to grief, your interests are usually perfectly aligned with the inspector’s, and your recollection of such limiting factors would provide powerful corroboration of the exonerating reasons that a defect was not discovered during the inspection.

Information in this post is from InterNACHI. The original article can be found at https://www.nachi.org/agenthelp.htm