What can Other Professionals Learn from Real Estate Broker Risk Management Practices?

A Learning Principle.

My friend Fred Moreno is an engineer and former COO of a semiconductor equipment manufacturing company.  He was fond of saying: “A change of perspective is worth 30 IQ points.”  Come to think of it, I’m rather fond of that phrase myself.

I recently attended the annual gathering of the Idaho Real Estate Commission (“IREC”), where commissioners, real estate instructors, and real estate school operators learned about important developments in their profession. IREC calls this gathering “CORE.” Reflecting on the gathering, I see how people in other professions can pick up some IQ points from the real estate community.

An Application Example.

IREC publishes guidelines designed to help Real Estate brokers and agents comply with the law governing the practice of Real Estate in Idaho. They highlight a few guidelines each year.

This year, one of those was Guideline #17, which focuses on a broker’s duty to supervise Real Estate assistants and office clerical staff!

It may seem obvious that a business owner should supervise its employees and independent contractors, so why did IREC see a need for an official guideline?  I don’t know the specific history, but my experience in several industries is that rules tend to arise after problems occur.

Guideline #17 has something I think can be transferred to other professions.  It identifies a number of activities (such as buying or selling real estate) that unlicensed assistants and office staff must NOT do.

It then lists seven specific tasks (such as gathering information for a listing or handing out pre-produced materials at an open house) that assistants and office staff MAY do.

Guideline #17 also exhorts brokers to have a written office policy explaining the duties, responsibilities and limits on use of assistants and clerical staff.

Conclusions for Risk Management.

I think other professionals who adopt such practices would reduce their risk that unauthorized (read: costly) activities will occur in their own shops.

They will also increase the odds of hiring the best people while reducing the risk of a discrimination suit, as I discussed in my post Five Great Reasons to Write Great Job Descriptions .

Michael Oswald

michael@msochartered.com

www.msochartered.com

Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.

© 2019 Michael S. Oswald

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