Key Takeaways
- Six brokerage risk categories: trust account, supervisory failure, E&O gaps, insolvency, compliance, and data security.
- Trust account violations (commingling, conversion) represent the highest-stakes financial risk—verify deposit receipts within 24 hours.
- Wire fraud losses exceeded $446 million in 2022—never wire funds based solely on emailed instructions without phone verification.
- Check the state real estate commission website for brokerage regulatory history before engaging any agent.
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Test Your Knowledge
1.What is the most significant brokerage-related risk for real estate investors?
2.How can investors mitigate brokerage-level risk?
3.What is the investor's primary recourse when harmed by a brokerage's failure?