3 Reasons to Conduct a Real Estate Background Check

A real estate background check is a good way to make sure real estate agents are trustworthy. Background checks can of course provide information about a person’s criminal record. But agents also have to be licensed, trained, and experienced in order to do their jobs safely. A background check can help verify a candidate’s work history in addition to criminal history.

If you work in the real estate industry and need to bring on more agents, you might be interested in learning more about a real estate background check. In this article, we list the benefits, types, and laws of real estate background checks. The more you know, the better protected you will be.

What Is a Real Estate Background Check?

A real estate background check is a way to verify the trustworthiness of real estate agents. Agencies that want to employ honest, reliable real estate agents should check each agent they hire. Therefore, a background check is commonly a requirement for the real estate licensing process.

However, there are a variety of search types you can use. The type of search you need depends on the position you are trying to fill, the information you need, and, potentially, your specific state’s requirements.

Types of Background Checks

Background checks can be used for identity verification. If you want to verify that applicants, candidates, or agents are who they say they are, you will want to conduct identity verification. Alias and address history checks help with identity verification as well.

A criminal records search specifically reports on someone’s criminal history. This type of check shouldn’t necessarily prevent someone from becoming a real estate agent, but it’s still a good idea to know who your agents are. It can also be used to verify whether or not someone is being honest with you about his or her history.

A professional license verification ensures that agents have met all requirements and are legally allowed to work as a real estate agent in your state. Drug screening ensures that candidates are clean and sober while under your employment.

Professional reference checks and employment verification provide you with information from a candidate’s previous employers and work history. While you wouldn’t discriminate against candidates with criminal records, a professional reference check that reports on the dishonesty of a candidate could be grounds to keep someone away from your agency. You also want to verify the experience that a candidate reports having.

A sex offender registry search could affect your hiring decision as well as a driving history check. Part of a real estate agent’s job is to drive clients from property to property. So you want to be sure that any agents you hire with this as part of the job description are qualified for the task.

3 Reasons to Conduct a Real Estate Background Check

1. Know Who You are Employing

Obviously, background checks are important because they allow you to verify that people are who they say they are. This keeps you safe as well as your business and reputation. 

Conducting a real estate background check ensures that you employ licensed, trustworthy, qualified real estate agents. Your agency can be held liable for unprofessional, inappropriate, illegal situations and activity. So in order to protect your business, you want to know who your employees are.

A comprehensive background check allows you to make informed hiring decisions to build the team you want.

2. Keep Information Up-to-Date

Yes, a background check is typically part of the licensing process, but do you want to rely on that information?

Unless you run your own check, you risk working with outdated information from state agencies. Outdated background check information doesn’t reflect recent changes, so the information from an initial background check may not be complete.

Not only should you conduct your own real estate background checks prior to making hiring decisions, but you should also check regularly. Checking out your agents annually helps keep them on the straight and narrow they represent your agency, and it ensures that you always have the most accurate, up-to-date information.

3. Protect Your Clients

Real estate background checks are so important because of the nature of the job. First of all, real estate agents have access to clients’ homes. Therefore, clients have to feel comfortable and secure providing your agents with this kind of access. 

Real estate agents also need to be trusted advisors as they help clients make important financial decisions. Hiring someone dishonest or unqualified could threaten your clients’ financial health. 

There are even some instances where agents drive clients to and from properties. If your agents are reckless, you could face the consequences. And if your clients don’t feel comfortable with your agents, you lose business.

Finally, real estate agents have close contact with the public. They have extensive knowledge of a variety of people, properties, and neighborhoods. It’s important to keep this kind of information and access away from those who might abuse their position for the safety of the public.

Real Estate Background Check Laws

While conducting a real estate background check is necessary, quick, and easy, you do still have to make sure you remain compliant. It’s important to keep in mind any laws that might apply to your background check practices. Background check requirements for licensing vary by state, so it’s important to familiarize yourself with your state and local laws.

Ban the Box

Also known as fair hiring, ban the box laws protect formerly incarcerated individuals. These laws dictate that employers consider candidates on the basis of their qualifications rather than focusing on prior convictions or other criminal history. 

Ban the box laws govern when and how employers can ask about criminal records. These laws dictate how far back a real estate criminal background check can extend. For example, FCRA guidelines limit reporting of certain data to the last seven years. 

The Fair Credit Reporting Act (FCRA)

If you use a third-party screener to perform a real estate background check, you are subject to FCRA guidelines. The FCRA dictates that employers provide certain forms before background screening is conducted and follow the adverse action process if a candidate is denied or terminated based on background check results.

Title VII of the Civil Rights Act of 1964

Title VII of the Civil Rights Act of 1964 prohibits discrimination by an employer on the basis of race, color, religion, sex, or national origin. To ensure that you don’t discriminate, whether intentionally or unintentionally, administer background checks fairly and consistently. Having a fair and consistent screening policy in place ensures that you screen all candidates for a certain position in the same way. Therefore, you remain compliant at all times.

How to Conduct a Real Estate Background Check

Now you know that you need to conduct regular background checks, but what’s the easiest way? 

Searchbug’s Advanced Background Check with Civil & Criminal Check provides you with data sourced from multiple data APIs from top-tier data management firms. In other words, we provide you with information from databases totaling billions of records. This ensures that you get the best background check possible.

All you have to do is search by name and location for just a couple of dollars per search! Results include last reported and previous address history as well as associated phone numbers. 

You can also conduct a Criminal Records Search. With just a name and birthdate, you can search over 200 million criminal records. Results include aliases, age, race, eye and hair color, weight and height, jurisdiction, charge, offense, disposition type, sentence, probation and conviction, if applicable. Ready to verify your agents? If you are a new customer, try your first background check today for free!