REO Advisors – Real Estate Errors and Omissions Insurance Specialist
Errors and Omissions insurance is not mandatory in every state however, if you specialize in REO properties it is a must and now certain lenders also require it to be the listing agent of a short sale. The risks are high for agents who have decided to tackle the niche market of distressed real estate. I’m glad to have stopped by the booth of REO Advisors at the 2012 REALTORS® Conference and Expo because I learned the importance of E & O insurance and the fact that all insurance policies are not created equal.
Foreclosed lenders know little about REO (Real Estate Owned) properties as all the information they have is second hand information. As a licensee I would never want to sell the wrong the house, improperly list the square footage or violate laws governing eviction on behalf of an asset management company. Mistakes do occur when an agent isn’t provided with accurate information and can open the door to liability. Most distressed real estate is sold in “AS IS” condition. Real estate agents are not protected from risk in an “As Is” sale. Agents regardless to who they represent are responsible to conduct reasonable care, due diligence, and disclosure of know latent defects.
There are numerous risks to look for and insure your current E & O policy covers like open house coverage, lock-box coverage, title risk, real estate investor risk, HUD counseling, disclosures, contingencies, and claiming to be an expert.
E & O insurance only covers the duties of a licensed agent therefore do not practice other professions in which you are not licensed and insured for.
Before reaching out to an E & O insurance company check with your broker to insure you have an office policy in place for conducting sales of REO’s, short sales, and preforming BPO’s (if allowed in your state. Next review your current policy to see if all activities are covered. Next call your current company and ask about the cost for additional coverage and riders if not covered because you need the most comprehensive policy coverage. This information will allow you to compare what you have to REO Advisors which can be reached at REO Advisors.
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