The Seller’s Statement of Property Condition Form: To Use or Not to Use?

Filling out real estate forms can be a daunting task. They can be long, complicated and require lots of signatures. But forms have a purpose, of course. They also tend to make transactions run smoother, especially digital forms that can be signed electronically and eliminate the hassle of scheduling in-person meetings. When working with a seller, there is one form which comes to mind that can do just that.

The Seller’s Statement of Property Condition is a standard form, but the state of Massachusetts does not require this form to be filled out as a part of a real estate transaction. So, it’s up to the individual company to decide if they are going to use it or not.

This eight-page form can be a wealth of information for buyers. Quite simply, the form details everything a homeowner may know or doesn’t know about the property during the time they have owned it. In this form, members will find questions about special permits, water damage and structural components, including heating, plumbing etc.

Many of the sellers complete the form by checking the third box, “unknown.” However, if sellers take time to fully complete this form, they could save a buyer the trouble of making an offer. In addition, it’s very difficult for a buyer to come back after a home inspection and ask a seller to provide credit for a repair if they were aware of the issue prior to an offer. The more one discloses, the less they have to deal with after.

Whether your company requires sellers to complete the Seller’s Statement of Property Condition or not, you should know that there is an easy way to access it through MAR’s website as a member benefit. One of the recent upgrades allows you to email the Seller’s Statement of Property Condition to a client and have it completed electronically. It works like electronic signature. Once the seller completes the form, the agent gets a notification that the form has been completed.

It’s nice to know that in today’s fast-paced world, even lengthy real estate forms can be completed quickly and painlessly.

For more information on your free access to zipLogix, the official forms software of the National Association of REALTORS®, as a member of the Massachusetts Association of Realtors® please visit the MAR forms page.

Shopping for Coverage Policies: Factors that Affect Your Premiums

Agents, brokers, and other real estate professionals aren’t alone in facing the threat of lawsuits. However, as a member of the real estate industry, you do face unique risks that require comprehensive insurance coverage. Errors & Omissions (E&O) insurance policies are designed to protect you from lawsuits that relate to the following mistakes and violations, among others:

  • Allegations of Breach of Contract
  • Failure to disclose property defects
  • Negligence

Of course, it is important to make sure your agents and employees do everything within their power to prevent these claims in the first place. However, lawsuits can happen to any firm. It is your responsibility to secure insurance coverage to protect your firm from financial ruin. As you shop for coverage and debate the benefits of different policies, remember that the following four factors will ultimately affect the price of your premiums.

The Size of Your Firm

How many people work for your real estate firm? How much gross revenue does it generate? How many transactions do you process? These questions are crucial in determining the final cost of coverage, because your exposure depends your firm’s number of transactions. Your insurance policy must cover each individual who works for you, as well as the transactions that make up your firm’s revenues. The more transactions your firm completes, the more chances there are for errors to take place.

Of course, the size of any business will directly affect its risks and insurance needs, but it’s especially influential in the real estate industry because your transactions are larger and your contracts are more comprehensive. The more detailed a real estate transaction is, the more possibility there is for an error or omission to occur. Firms that buy and sell high-value homes should also expect that they would have to contend with higher dollar claims more than firms that do not deal with luxury home real estate transactions.

The same is true if you have more employees, because each additional employee will need E&O coverage. However, your firm will also be able to make more sales, handle more clients, and pursue more leads than a competitor with fewer agents. If this is the case for your agency, you will need a higher standard of protection, including E&O coverage.

The Type of Business Your Firm Handles

The type of real estate transactions your firm performs will influence how much your E&O insurance costs. If your agency handles any other type of real estate business beyond residential, your premiums will be higher than a firm that solely works with residential clients. Premiums are higher for firms that handle commercial properties and the magnitude will depend on how much of your business is with commercial clients. The mix of your firm’s commercial and residential transactions will impact the premium to varying degrees.

The Location of Your Firm

Where does your firm operate and where are the properties that you sell? Location, as the saying goes, is everything in the real estate industry. It dictates your business costs and strategies for a variety of different reasons. Your client’s location is related to property taxes, building codes, and other special considerations. Many of the specific legal obligations often depend on city or county laws as well as state laws.

According to the U.S. Small Business Administration, each state determines its own insurance requirements and litigation laws. If you sell properties in a state where judges have more legal freedom to award substantial damages, your insurance company must be prepared to help you pay these higher costs. Your premiums will reflect the likelihood of large E&O claims, as well as the requirements that prevent or enable these lawsuits in the first place.

The Claims History of Your Firm

Your firm’s claims history is going to play a role in how much you have to pay for your current coverage. Insurance premiums are influenced by how much of a risk your business is, and if you have a history of high value claims or a history of frequent claims, you are a greater risk. This means that your insurance premiums are going to be higher. On the other hand, if you do not have an extensive claims history, your premiums will be lower than a firm that does, because you are a lower risk client.

Protect Your Real Estate Business with E&O Insurance

Insurance prices obviously are not the only – or even the biggest – reason to minimize risks and prevent common real estate mistakes at your firm. Your reputation depends on your competence and integrity. However, if you want to offset future costs and make sure lawsuits cannot destroy your company irreparably, make sure you purchase E&O insurance that accommodates every possible risk.

 

New Condo Insurance Webinar this Wednesday!

Webinar Wednesday: Condo Insurance

Many REALTORS® have questions and concerns about condo insurance.  It is one of the most confusing topics in our industry because of the shared ownership that condo association entails.  As a result, an insurance policy in the name of the association or trust needs to be written to cover the structure at large. Additionally, the bylaws of the association dictate how much coverage the unit owner should obtain on their personal HO6 policy, which impacts the loan requirements and the internal workings of the buyer’s insurance policy. Learn all you need to know and join Zack Gould, Partner at G&N Insurance, live at 10 am on Wednesday August 5th for free. Click here to register.

Hurry! Last Day for the MAR Conference & Tradeshow Early Bird!

Connect_facebook headerToday is the last day to register for the MAR Conference & Tradeshow with the Early Bird price of $130. You won’t want to miss this year’s event at the DoubleTree Hilton in Danvers, MA with new and returning national speakers. This year’s presenters include Leigh Brown, Chris Bird, Terry Watson, and more! There are also some exciting panels this year that will be discussing topics such as teams, video production/media, successful agents, among others. Don’t miss it.. click here to register.

Take Advantage Now: Conference Early Bird Ends Soon!

 

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Have you registered for the MAR Conference & Tradeshow this year at the DoubleTree in Danvers, MA? Join us and top national speakers on September 28-29 for fabulous education sessions and a show-stopping tradeshow. Top speakers this year include: Chris Bird, Leigh Brown, Doug DeVitre, Andrew Dorn ,Elliot Eisenberg, Jan Hargrave, Rosemary Kelleher, Robert Pagliarini Seth Price Terry Watso. 

Don’t miss out,  the early bird price for only $130 ends soon: sign up here.

Don’t Miss It’s All About the Apps Webinar!

The next MAR Webinar Wednesday is on April 8 from 1:00-2:00pm

with REALOR® Joe Schutt from Unit Realty, LLC.

Ever wonder what the top apps are that REALTORS® should be using or that can help REALTORS® with their business? Not everyone works the same, but as someone who lives on their phone and tablet, Joe will share the ones he has found to be the best to help make life easier and more productive for clients, agents, family and himself! This webinar is free for MAR members. Sign up here.