For newly minted real estate professionals, the decision to join a firm or go it alone isn’t always up to you. Many states require that new realtors spend time in a firm before you can fully go out on your own. While some agents choose to go on their own the minute they have met the minimum requirements, others choose to stay.
For brokers, it is a far different matter. Most states allow new brokers to begin on your own immediately. But which is the right move for you and your unique situation? How do consumers view a solo flyer versus a team? And moreover, how does Errors and Omissions Insurance see you?
The Real Estate Agent Team Player
For real estate agents who want to capitalize on the name of a large national firm, or even a new boutique firm, while you build a client base, staying with a firm makes sense. Consumers don’t yet know who you are or what your track record is, so being under the firm presents a more trustable image to the consumer. Some consumers also like the idea of more than one person working on their sale, even if that isn’t entirely the case.
There is also personality to consider when choosing to stay with a firm. Do you like working with others? Do you feel that you would benefit from the knowledge of more seasoned real estate professionals? If so, sticking with a firm is a strong career move.
When it comes to how real estate E&O insurance views a team player, it has less to do with image and trust and more to do with the cold hard facts. Firm insurance can offer some protection, but it is focused on protecting the firm first and often has limitations for the agents. You could be left uncovered for past transactions if you aren’t prepared.
This is where personal E&O insurance becomes vital:
- If you change firms, it will go with you and prevent gaps.
- If the firm’s E&O insurance has already been exhausted by other claims, your own E&O insurance will jump in to provide coverage.
- Additional legal coverage will also be available that will be focused on you, not the firm.
In some states, personal real estate E&O insurance is mandatory. If this is the case for you, shop wisely. You want to find personal E&O insurance that is focused on your specific needs.
The Solo Broker
The world is a much different place if you are a real estate broker deciding whether or not to go out on your own. As a new broker, you’re starting your own business with more variables and liability than an agent. Consumers see new brokers who are not attached to a national or boutique firm as a smaller, perhaps more accessible option; they may even expect that a broker who works for him/herself will be available to them during extended hours.
When it comes to real estate E&O insurance, a broker will require insurance that is able to change as their business grows. A claim can be a financial disaster to a new broker who has chosen to go it alone. As you grow, you’ll become responsible for covering the actions of your team to some extent too, making coverage flexibility essential.
Regardless of whether or not you choose to go out on your own or go with a firm, CRES has coverage options that can help keep you safe and focused on growing your career. Learn more here.