R
ealtors have been jolted by a wave of legal challenges over the last two years, prompting many to rethink how they handle risk. The National Association of Realtors’ 2025 NXT conference reflected this shift, with the Risk Management Committee spotlighting key threats that members must guard against.

    **Listing fraud – who’s liable?**

    Miguel Berger, senior VP of growth at Property Shield, explained that the responsibility for fraudulent online listings remains unclear, yet agents are often the first blamed. Property Shield has removed roughly 492,000 fake listings from major sites and, according to an FBI report, 2024 fraud cost consumers $173 million. The problem is most acute in Atlanta, Dallas, Phoenix, Denver, and Los Angeles, where 15–25 % of listings can be fraudulent. Fraudsters now employ more sophisticated tactics, turning fake listings into “liability time bombs” that can lead to trespassing, squatting, and property damage. Berger urges continuous, automated monitoring as the only scalable defense.

    **E&O insurance – more than a cost of doing business**

    Steven Stecker, senior VP at Victor Insurance, highlighted a troubling trend: in 2024, the firm paid $37 million in E&O claims. Both the frequency and severity of claims are climbing, with the average loss per agent up 60 % over the past decade. “Social inflation” – rising home and construction costs, and a more aggressive legal climate – drives these numbers. The South accounts for 33 % of claims, the Midwest 19 %. Negligence tops the list (3,450 claims), followed by misrepresentation (2,097) and breaches of fiduciary duty (755). Dual agency, in particular, spikes liability because the agent is the sole party at fault, often leading to misrepresentation claims.

    **AI – the unsexy side of innovation**

    Rick Janson, a Denver realtor and AI consultant, cautioned that many agents use free AI tools like Google Gemini or ChatGPT to automate tasks, but these services train on user data. Even paid versions may use input data unless the user opts out. Agents should never upload sensitive documents—bank statements, social security numbers, or confidential contract details—to any large‑language model. Always verify platform security and double‑check AI‑generated content for Fair Housing compliance. For example, virtually staged photos should carry a watermark and include approximate room dimensions to avoid misleading MLS listings.

    The consensus from the conference was clear: risk management is no longer optional; it’s essential for survival. Realtors who want to protect themselves and their clients must act now, not wait for a future “someday.”