5 Little Mistakes That Can Be Big Liabilities To Your Real Estate Business

As real estate practitioners, we are constantly examining how we can grow our business and rightfully so. But how often do we stop and take inventory to see what may be harming our business?  

No matter what your answer is to that question, take a few moments today to assess how your business fairs in committing the following 5 mistakes.

1. Not verifying that "Active Adult Communities" comply with Fair Housing laws before marketing them
For example, have you ensured that your marketing of senior housing or an active adult community complies with federal and state regulations?  A community may label itself, "Active Adult" but it may not actually comply with the various laws required to use such age-specific terms, getting you into hot water for potential discrimination and Fair Housing violations.

Therefore, verify this for yourself.  Review the qualifications provided by the Department of Housing and Urban Development (our buddy, HUD) found at their online information portal.

You may rarely work in senior housing communities but this is all the more reason why it is vital for you to stay current with this information.  Please do your business a favor and bookmark HUD's site.

2. Emailing wiring instructions
"What's wrong with that?", you ask.  Cyber-theft is on the rise and internet hackers and scammers are smart. They have figured out ways to intercept wiring instruction emails so that your client's money is stolen.   Ned Blumenthal, an attorney with the law offices of Weissman, Nowack, Curry and Wilco attested (in a comment to the Georgia Real Estate Commission (GREC)) that he is aware of several instances of such theft having been reported. 

Wiring instructions should be accessed only from a secured site that is best provided by the attorney or title company issuing the wiring instructions. You can also encourage your client to call the closing office for instructions over the phone.

3. Not securing documents that have personal identification information
No one wants to have their identity stolen much less because it was not protected by a trusted professional. Emails that contain your clients' personal information should be encrypted, computer files with sensitive data should at the least be password-protected and physical documents should be under lock and key.

This is the mistake that many of us know we should be better about yet many times we are too busy with our real estate businesses to put the proper protections in place.  However, we should be too busy to NOT ignore this any longer since such a liability can destroy our businesses and all that we have worked hard to build.

Let this be your prod that gets you proactive in securing your clients' documents.


4. Not making sure your referring agent is ACTIVELY licensed

This may vary from state to state but in Georgia, for example, if Real Estate Ralph is helping the general public buy and sell real estate without a license (or with a lapsed license) and sends a buyer to your listing, YOU can be liable if you share your commission.  Make sure you stay apprised of your state's legal stance regarding commission sharing with unlicensed and inactive licensed persons.

If you are using a custom or state-approved REALTOR(r) referral contract, make sure you get the refering agent's license number and verify if he or she is still active.  This can be quickly done by visiting the online website of your state's real estate commission if the person is local, or performing a web search for the real estate commission in the state that the person is supposedly licensed.

Save yourself headaches and fines by making sure you are engaging with the unlicensed lawfully.

5. Being unpleasant
I am sure you may think this one does not fit under liabilities - annoyances, yes, but not under legal responsibilities.  Well, “dissatisfaction is often the reason a Request for Investigation is submitted to the Commission by an individual", noted Craig Coffee, the Deputy Real Estate Commissioner of Georgia, while speaking at the GREC Annual School meeting.

Various complaints filed against real estate agents to local commissions may be preempted simply by offering better customer service.  Just by being nice, courteous and gracious to a seller, buyer, or anyone (who may even be clearly in the wrong), can go a long way in keeping you out of trouble.


If you have been unknowingly or knowingly lax in any of these areas, today is a good day to take inventory and make some adjustments to ensure your real estate business is not burdened with superfluous legal action and fines.

If you have more questions on how your real estate sales business can avoid costly mistakes, do not hesitate to contact me at info@AgentsAroundAtlanta.com.  Here's to your success!
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