Market Gone Wild
Monday, July 9, 2012
From the July/August 2012 issue
Even the wildest dreams could not have
conceived today's conditions
By Sarita Cabrera
Do you wake up every day with the inevitable feeling that it’s going to be another crazy day in a real estate market gone wild? We never know what bizarre issue will surface on which we must contemplate the best solution. The predominance of short sales and REO properties and the challenges posed by distressed homeowners have not only stretched agents beyond the scope of their job, but also created a need for risk management procedures.
Nothing brings the message closer to home more than attending a Florida Real Estate Commission meeting and hearing first-hand accounts of Florida Statutes violations. FREC meeting minutes indicate that through through March 2012, the commission revoked approximately 40 broker and sales associate licenses and four brokerage licenses. In addition, many of these former licensees had to pay fines ranging from $1,000 to $20,000 and investigative costs between $90 and $2,000.
Some of the cited violations were:
- Failure to immediately deposit a buyer’s deposit into an escrow trust account;
- Fraud; and
- Escrow accounting violations.
Equally disturbing, in the recent Risk Management Certification class "Identity Theft: Protecting Your Customer," instructor Andrew Wooten stated that in 2011 more than 3,900 brokers and agents were arrested and indicted for identity theft. Many of the cases involved inappropriate storage of transaction files that included confidential customer information. Wooten also pointed out that agents carry their files in their cars as they travel to appointments. If his or her car is vandalized, an agent may be liable for any identity theft issues his customers incur as a result of stolen information.
Agents should always follow basic procedures to reduce risk:
- Document all your transactions and include all disclosures and addendums; when in doubt, review the file with your broker.
- Detail on the first page of the contract when escrow will be delivered and where it will be deposited; follow through with the deposit and document if it is moved to another escrow holder.
- Protect your customers’ information at all times.
- When you feel that you are trying to explain something to a customer that is out of the scope of your role, refer them to a professional.
Don’t become a statistic. Study your craft diligently and when in doubt, speak with your broker and/or the Florida REALTORS® Legal Hotline for counsel.
Sarita Cabrera, Prudential Florida Realty, is a member of the ORRA Risk Management Committee. She can be reached at email@example.com.