Home Selling in Atherton>Question Details

Doris Bates,  in Atherton, CA

If a realestate agent sells their own house does E&O insurance cover them

Asked by Doris Bates, Atherton, CA Thu Jan 3, 2013

I was told that a real estate agent can not sell their own home and still be covered by their insurance

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If you are talking about your E and O insurance, I believe that is correct. You can always check with the provider to be safe.

0 votes Thank Flag Link Thu Feb 14, 2013
There are several different aspects of selling a home where the Seller runs legal liability. E&O insurance is focused typically as the name implies on errors & omissions within the documentation aspect of an agents fiduciary responsibility to their client, in this case themselves. So, let's see I make an E&O type error in representing myself and it hurts me, don't think I'll be suing myself!

But there are other significant liabilities around every RE transaction where being the agent and owner/Seller increase your liability and those have primarily to do with inadequate disclosure to the Buyer of know adverse material conditions of the home from neighborhood nuisances like noises, to improperly completed repairs, to occasional issues with water, etc... As a professional, the standard for knowledge of such issues and therefore disclosure would be higher, and what ever the cause or case, where as typically a home inspector or the Realtor you hired might act as a "buffer" in the case of a legal matter arising, now as a Realtor selling your own home, you've lost that "buffer".

The above is all good news if you are the Buyer asking this question because you have a Realtor selling or who sold their own home on the other side of a transaction that's got some possible legal issues.

As others have said, the issues are complex and answers will vary based upon many specifics including the specific E&O policy. But I hope the above principals help shed some additional light on the legal forces at play when a Realtor represents themselves in the Selling or the Buying of their own home.

Stu & Davlyn
0 votes Thank Flag Link Fri Jan 4, 2013
Truth is, in many cases, E&O insurance has not covered the sale of a realtor’s personal home when they sold it themselves – it’s why you’ll frequently see “arrangements” where the agent of record is another agent in the same office or the broker. There are also other limitations and potential issues when selling your own home – I recommend you talk to C.A.R. legal and your existing E&O carrier.
0 votes Thank Flag Link Fri Jan 4, 2013
Understand that I work only in Texas and that is all I can refer to, but in Texas there would certainly be credence in the other agent's statement. An agent CAN sell their own home, but in fact, many E/O providers will NOT cover any incidents arising from same. I just renewed my E/O and ran into this very issue yet again and had to change providers because they didn't like the fact that I invest in residential properties, many of which are quickly resold after purchase. A couple of carriers either refused to insure my brokerage and others wanted to charge me a higher premium. You would need to check with your broker prior to selling your own home to determine if you and the brokerage will be covered or not..

Often, agents wanting to sell their own home will just allow the home to be listed under the name of another agent in your office as this typically satisfies the E/O provider's coverage concerns.
0 votes Thank Flag Link Thu Jan 3, 2013
I believe your insurance should cover you but things may differ by insurance company. Why not call your own E & O company and ask them?
0 votes Thank Flag Link Thu Jan 3, 2013
Who ever told you that should be out of the biz... that's almost as bad as saying Bankers can't get their own loans.
0 votes Thank Flag Link Thu Jan 3, 2013
You should talk to your insurer.
0 votes Thank Flag Link Thu Jan 3, 2013
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