The aftershocks of the residential mortgage crisis have continued to impact the commercial real estate market. Potential investors are either reluctant, or simply unable, to acquire and develop real estate without the aid of using credit.
Banks and other real estate lenders have been reluctant to invest in mortgage-backed securities due to the previous losses they’ve experienced. These losses have affected their capital reserves and have limited their ability to make loans.
Despite these factors, the future of the real estate market looks surprisingly good and there is still a light at the end of the tunnel.
Based on economic indicators, industry experts are saying that more development is to come and that commercial real estate firms will eventually start to see an increase in rentals and sales.
Until the market swings back to a reasonable place, commercial real estate firms should continue to be cautious as they conduct transactions. The pressure to immediately close a sale may affect the way financial details are managed - making it easy for mistakes to be made.
A simple error or even a slight miscommunication between an agent and their customer could create potential liability for any real estate business.
Errors and omissions liability insurance could protect against these risks and would cover the financial burdens placed upon a firm when facing a lawsuit. It's more important than ever to review the limits for your current E&O policy. A one million dollar policy may be appropriate for a residential real estate agent, but a commercial real estate agent should consider higher limits considering the size and types of transactions they handle.
In order to protect your real estate firm and your employees from facing risk, speak to a licensed professional liability insurance expert today.