Are real estate lockboxes risky, and if so, how can you manage that risk? As an association manager, you may be responsible for implementing real estate lockboxes on sale properties within your clients’ association. While real estate lockboxes make it easy to manage properties, they do carry a certain amount of risk. Managing that risk means you can ensure your clients’ properties remain safe.
It’s recommended that association managers understand how real estate lockboxes work so that they can advise their clients on security best practices. You can help your clients purchase more secure lockboxes, set the lockboxes up, and streamline the process of showing properties to potential buyers or tenants. When the risks are mitigated, real estate lockboxes provide a secure, convenient way to manage sale properties.
Whether you’re new to using real estate lockboxes or looking for a refresher, this guide to real estate lockboxes will help you manage risks for your association management clients.
How to Use Real Estate Lockboxes
A real estate lockbox is a device that allows prospective buyers or tenants to enter a property without the manager being present. Lockboxes include a space for storing keys, which is then sealed and protected by a keypad. Users must enter the correct code to open the lockbox and retrieve the keys. Then, they can use the keys to enter the property and return them to the secure lockbox when they leave.
Statistics indicate that self-showing with lockboxes can reduce the amount of time it takes to sell or rent a property. Real estate lockboxes are a convenient option for busy association managers who may not have a lot of time to show properties. Instead of scheduling appointments to show the property, managers can email the lockbox code to prospective buyers or tenants. Then, the prospective buyer or tenant can see the property as their own schedule allows.
As technology has advanced, many real estate lockboxes have also become “smartboxes” that can be managed by an app or website. Managers can change codes remotely, without having to adjust the lockbox in person. Other advanced lockboxes can be opened using a special cell phone scanner. Some advanced lockboxes can also send alerts to notify the manager when they have been opened and closed and keep an electronic record of this information.
Using a real estate lockbox to manage your clients’ properties saves time for everyone involved. Lockboxes offer an efficient way to show properties and attract new buyers or renters more quickly. The lower vacancy time, which means the association can begin collecting new revenue sooner in the form of fees and dues.
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Risks Associated with Real Estate Lockboxes
Despite their numerous advantages, real estate lockboxes do carry a certain amount of risk. Generally, these risks involve property damage, theft, vandalism, or other problems that may arise when a property is being viewed without a manager’s supervision.
Potential buyers or renters may misuse the property if there’s no one available to show it in person. For example, they may leave the lights or air conditioning turned on, thus wasting energy and increasing the owner’s utility bills, or leave a window open that allows insects to enter.
Along with damage to the property itself, potential buyers or renters to enter a property unsupervised also creates liability concerns. If someone falls or becomes injured on the property because they used a lockbox to let themselves in, the property owner or manager may be held legally responsible.
In some states, using real estate lockboxes to show properties without an on-site manager may also violate the property owner’s insurance policy and result in penalties or higher premiums.
Managing Risks with Real Estate Lockboxes
Luckily, most of the risks associated with real estate lockboxes can be mitigated. By taking extra steps to research, setup, and maintain a real estate lockbox, you can improve your client’s security and help them sell or rent their property in record time. Choosing the right real estate lockbox and following safe best practices for self-showing will help lower the risks mentioned above.
First, change the lockbox code after every showing, or at least once a week. Make sure that anyone who requests the code provides a copy of their identification. Keep a detailed log of the day and time you sent them the code, as well as the date and time they said they would visit the property. This will help eliminate property damage, theft, and vandalism.
If purchasing a smart lockbox, choose a model that allows for remote access. Then, you can easily change the code as often as you need to. Many digital real estate lockboxes also allow property managers the ability to restrict access hours. For example, even if someone has the correct code, they can be restricted from entering the property only during the daytime.
It’s also recommended to purchase cameras for the property. Thanks to WiFi and Bluetooth technology, home cameras have become inexpensive and very easy to install. Many of today’s surveillance cameras can also stream footage directly to your smartphone or tablet. This will enable you to supervise potential buyers or renters touring the property without being physically present.
Finally, you may advise your client to manage risks with real estate lockboxes by adjusting their insurance policies. A special type of insurance called Real Estate Errors & Omissions (E&O) Insurance offers coverage for damage, theft, and vandalism associated with lockbox access, as well as protection from lawsuits. Adding this insurance to a policy will help lower the risks associated with a real estate lockbox.
Try CINC Systems for More Management Solutions
Real estate lockboxes are one of the many ways to improve your management business. As you streamline your business and look for new ways to cut costs and expand, make sure you’re also using the best management software available. CINC Systems offers multiple cloud-based solutions for association managers of all types of properties.
To learn more about CINC Systems, click here to request a free software demo.