Real Estate Agent / Wholesaler

[Shawn Jacobs]

Hi Everyone! 

After looking into my agent E&O coverage, I wanted to see how other investor friendly agents are protecting themselves, while working with investors and still offering a great service.

I work with a lot of investors/flippers and refer them deals and listing their finished products. I "project" possible ARV's and provide comps when presenting properties to investors. I have very good relationships with my investors and am expected to do a lot of the legwork to find deals, but after looking into my agent E&O coverage, I think it leaves me exposed to liability.

I'm looking to implementing a holds harmless document and have my investors sign it and keep it on file. Does anyone have any suggestions or techniques they use to still offer great services to investors, but also protect yourself from any "holes" in your E&O coverage?

Thanks!

Shawn 

[Stuart Birdsong]

@Shawn Jacobs Are you asking how you can be a wholesaler and an agent? I think the most important element of  being a wholesaler regardless of whether or not you are an agent is to be transparent. That is to say that if you take a property under contract with the intention of selling/assigning the contract to an end buyer make sure that the seller is aware of this. More importantly that they completely understand your role in the transaction. Your E & O insurance will not cover this as you are not acting as a broker in this particular instance, so this is where you must tread lightly. This makes it even more important for you to explain your role in the transaction. I, as a licensed real estate agent have wholesaled a couple of properties, and have made it readily apparent of my intentions as well as explaining all of the options that the seller has. This includes what a cash buyer will pay, or what they could sell it for on the Open market regardless of whether or not I were the listing agent or the buyer. I let them make the decision that best suits their current needs. If it does not include me in any capacity, and they made the decision then I have been honest with them and feel comfortable with the end result. Cheers!