A “risk” implies a probability that an “event” is possible. For example, if it’s a wet day, and you have slippery tiles, the potential exists to slip or fall.
The risk can be defined in two parts – (1) “Cause” of the situation (i.e. rain) and (2) “impact” of the situation (i.e. possible legal suit for any resultant injury).
To properly manage a risk you need to first assess if you have any control over the “cause”. That determines the degree and actions of the “impact”. Below is a method of categorising the risk.
There are 4 stages to Risk Management. They are:
At this stage we identify and name the risks.
The best approach is a workshop with all people involved in the project to carry out the identification. Perhaps implement a brainstorming session and review the standard of risks. There are different types of risks and we need to decide on a project by project basis what to do about each type, eg sales department may be experiencing problems with keys being incorrectly tagged.
A risk needs to be quantified into 2 dimensions.
For simplicity, rate each on a scale of 1-5. The higher the number, the larger the impact or probability, such as the matrix below. Therefore, if the probability is high but the impact is low it would be a medium risk. On the other hand, if the impact is high and the probability is low it would be a high risk. A remote chance of a catastrophe warrants more attention than a high chance of a hiccup.
Consequences – How severely could it hurt someone or cause damage?
Probability / Likelihood – how likely is it to happen?
There are also 4 things you can do about a risk. These strategies are:
A risk response plan should include the strategy and action items to address the problem. The actions should include:
Firstly, let’s take a look at some of the areas prone to risk in an Agency:
Clients / Customers:
This is one example of a number of tools that can assist with your risk assessment process. This four (4) stage approach will assist in identifying the risk profile of the situation and allow an assessment to be mad eof the likely consequences of the event impacting on business operations of the agency.
For all “sectors” listed below there are specific areas that NSW Fair Trading have identified as “of concern” for licensed agents to be aware of in their day-to-day activities. The assessment activities are related to those concerns.
Real Estate includes:
1.1 Identify a primary occupancy risk for the various functions carried out by agents:
(The “primary occupancy risk” should be defined as: what is the area of greatest risk/liability to the clients with whom the individual agent deals with, in relation to the occupancy of their space – either as an owner or tenant)
1.2 List at least three (3) and no more than five (5) potential sources of risks in the property types/styles you deal with (e.g. could include: fire safety, swimming pools, loose-fill asbestos, access, and poor maintenance of a property).
1.3 What are some examples of the appropriate measure/s the agent could take to demonstrate a clear understanding of their responsibilities (as an agent) to mitigate safety risks to occupants through appropriate disclosures, maintenance, and coordinating appropriate responses to identified risks, specific to the types/style of property you deal with?
Go to the Quiz section and complete the tasks there for * Real Estate Agents (i.e. residential sales; residential leasing; commercial sales; commercial leasing; on-site residential leasing).