Does your Real Estate E&O Policy protect you in REO and short sales?

Does Your Real Estate E&O Insurance Policy Protect You For REO & Short Sale Transactions?

Real Estate Owned (REO) properties are often homes that have gone through foreclosure, been taken
back by the bank, and usually sold “As Is” to the next buyer. Many homeowners or business owners are
quite distressed at the time of foreclosure and do not have the financial ability to physically maintain the
property. And some sellers owe the bank more money than the amount the home can sell for. When
selling the property to a new owner, the bank, lender, or other owner of the property may not be required
to provide a disclosure statement, leaving buyers to fend for themselves in discovering defects of the
property or other damages left by the previous owners.

Jason Shroot can provide you a policy covering real estate services performed for others in foreclosure and short sales while serving as an agent, broker, leasing or referral agent, consultant or counselor, property manager, auctioneer, appraiser, and short-term escrow agent. The claims typically arising out of these circumstances include the alleged failure to disclose and misrepresentation of a property defect. In fact, a recent study by XL Insurance revealed two of the leading causes for E&O claims are:

**Failure to Disclose Information. Situations where the agent failed to disclose certain
information about the property, such as previous problems with flooding or water damage
and future development of the surrounding area. (48% of all claims).

**Misrepresentation. Scenarios where the agent misrepresented certain aspects of the property
such as taxes, schools in the district, well water pressure or quality, zoning, and property
boundaries. (29% of all claims) REO property sales present certain risks to real estate professionals, so be sure to provide all critical information known about the property in writing to the buyer. Should you receive a claim following a foreclosure or short sale, please immediately report it to XL Insurance at the address shown on your insurance policy. Remember: It is important to report all claims (or potential claims) as soon as you are aware of them to help ensure you’ll be covered.

Jason Shroot and www.jasonsellsinsurance.com is a local California Insurance Broker and Agent that specializes in the design and administration of quality insurance plans for individuals, associations, affinity groups, unions, and large firms.  For more information about Jason Shroot's E&O programs, please call 714.988.3325 or visit www.JasonSellsInsurance.com