Transaction Coordinators play an important role in supporting real estate brokers and licensees to close transactions faster and more efficiently. It comes with a huge responsibility, because closing transactions involves a lot of moving parts. With this responsibility comes significant risk. Transaction Coordinators need to manage these risks and ensure they have appropriate insurance in place to protect themselves and their business.
Top Risks to Watch Out For
Transaction coordination requires strict adherence to deadlines and an eye for detail. But, sometimes things can go wrong that can have serious consequences. These are the main risks to watch out for:
Real estate brokers and licensees use Transaction Coordinators to increase efficiency and minimize any potential issues with closing. It’s crucial that all paperwork is submitted on time, so that the closing goes ahead without a hitch. Late paperwork doesn’t only cause delays, but it can cause significant financial loss for the parties involved. Or even worse, it can stop the transaction altogether.
Transaction Coordinators need to keep track of all the documentation required to close the transaction. Missing documents, signatures, or forms can cause costly delays (and unhappy clients).
Failure to Reply Promptly
Because Transaction Coordinators are the central point of contact for the transaction, it’s important that you’re available and reply to any requests for information in a timely manner. If you don’t, this could cause significant delays and affect the closing. Lawsuits may then ensue from angry clients.
Many a closing has been delayed due to incorrect forms. Transaction Coordinators need to verify that all of the correct forms are used to ensure the closing goes through as planned. If there’s an incorrect form or document, the whole transaction could unravel.
A Transaction Coordinator can help a real estate agent set up escrow accounts for the transaction. If there’s a mistake in the setup of these accounts or in the release of funds, both the Transaction Coordinator and the real estate licensee are vulnerable to a lawsuit.
Failure to Hold a Certification (in some states)
Transaction Coordinators don’t have to have a real estate license. But, in some states, such as California, Transaction Coordinators are required to hold a certification. If something goes wrong in a transaction, the client may sue the Transaction Coordinator (and the real estate licensee) if they didn’t hold the appropriate certification.
You hould have Transaction Coordinator Errors and Omissions (E&O) Insurance to protect you in case of a claim. Even if you haven’t done anything wrong, you could be named in the lawsuit just because you were involved in the transaction. Legal defense costs are expensive and with the right insurance, you’ll be covered.
A customized policy is better than a generic policy. For the best protection, your insurance should be tailored to cover the exact risks you face as a Transaction Coordinator.
What Insurance Will Not Cover
Any intentional or illegal acts you carry out, such as fraud, will not be covered by your E&O policy.
CRES E&O + ClaimPrevent®
CRES offers free legal advice from highly qualified real estate attorneys to members with a CRES E&O + ClaimPrevent® policy. This means you can get pre-claim advice and assistance with any potential issues you come across with a transaction. The CRES legal team is available 7 days a week and can help you to avoid lawsuits by providing valuable risk-related legal advice.
Contact CRES Today
Are you interested in a tailored E&O + ClaimPrevent® insurance policy designed especially for Transaction Coordinators?
Contact CRES at 800-880-2747 for a confidential discussion today and our team can guide you through your insurance options.