What Kind Of Risks Are Real Estate Agents Exposed To?

The real estate business includes showing clients around properties and encouraging the sale of the property. Direct client interactions, fieldwork, and daily commutes leave you open to various risk factors. As a real estate agent, it’s your responsibility to ensure the safety of visiting clients, the property, and all documentation related to the property. Any mistake that results in damage or injury can result in a lawsuit.

That’s why a thorough risk management strategy for real estate agents is necessary. With a risk management plan in place, you know what the potential risk factors are and what you can do about them.

What are the potential risk factors a real estate agent can face? 

As a real estate agent, some of the risk factors you face are under your control. But factors such as housing market conditions or property damage from natural disasters aren’t always controllable. Your risk management plan should contain mitigation procedures in case of such scenarios. But there are more common risk factors that you can encounter, and many of these can be mitigated with preemptive action.

1. Injuries and falls during Open House 

Inviting clients over for an open house is necessary to sell properties. However, if the open house hasn’t been set up in a way where injuries can be avoided, an accident can happen. You can consider setting up the property in a way where there’s a lot of space around the property. Removing excess furniture and leaving the bare minimum can prevent accidents as well.

Before the open house, check the property ahead of time to ensure that there’s no water spillage that can cause a slip. You can also consider bringing along another agent for open houses with a larger number of guests. Keeping a close eye on the visiting clients can help ensure that they don’t encounter an accident.

2. Lack of transparency 

Making a potential buyer privy to all the details surrounding the property is an essential part of a real estate agent’s work profile. Issues such as mold and mildew deposits, fire or water damage, presence of rats and even ants should be made known to the buyer.

What’s also necessary is documented evidence of this transparency. That way, should the client feel that the real estate agent wasn’t open about the property’s past and history, the real estate agent can provide proof to the contrary. It’s important to note that a lawsuit from a client who feels that the real estate agent hasn’t been transparent can go up to thousands of dollars in damages. To prevent this from happening, including cases where the real estate agent themselves weren’t aware of certain issues, documentation is necessary.

3. Car and vehicle accidents 

Real estate agents can’t work out of their office. They need to visit the properties they are trying to sell and showcase that property to potential buyers. This means that real estate agents need to commute frequently.

A road accident can result in financial losses. If the vehicle the agent is commuting in belongs to the real estate agency, repairs can be costly. Real estate agents can take preventative measures to ensure road accidents are financially covered ahead of time.

4. Property damage, theft, and vandalism 

A real estate agent may not always be available to monitor the properties they are trying to sell. Not every property had a security guard protecting it, either. This leaves properties open to certain risks such as theft and vandalism or intentional damage from malicious elements.

Removing expensive equipment, appliances, and furniture from the properties ahead of time can prevent theft and vandalism from taking place. A security surveillance system in unsold properties can also dissuade malicious elements from visiting the property.

However, physical property damage from natural disasters such as hurricanes and earthquakes can come out of the blue. In such situations, it’s more difficult to protect property ahead of time. Knowledge of the potential for this to happen and securing financial coverage against such factors ahead of time can protect company finances against such properties.

5. Housing market fluctuations 

Although the housing market is usually more stable than various other markets, fluctuations occur from time to time. Keeping an eye on the market conditions and creating a strategy against housing market fluctuations can help your real estate business out.

When a housing market fluctuation does occur, you won’t be able to find potential buyers for your properties. With people not having enough income to pay for properties and a general sense of insecurity about the market, property damage can occur.

To mitigate risks against potential housing market fluctuations, regular market analysis is crucial. Conducting yearly or bi-annual market analysis on the state of the industry can keep you on top of industry trends. Bring forewarned about such events can help you protect your real estate business, as well as the properties under you.


Real estate agents can be exposed to various risk factors. Scenarios where a client gets injured or feels disgruntled can result in expensive lawsuits and damages. Property damage or vehicle damage could also result in expensive repairs. To protect your real estate business against such scenarios, you can consider business insurance.That way, you can secure financial coverage and protection, depending on the policies you pick.

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