Friday, July 04, 2008

home inspections and home warranties

Here's a comment I posted in a conversation on the Inman site. They are discussing referral fees.

The very idea of a home inspection company sending a kickback to a real estate broker makes me want to puke.

I can think of no better example of abusing a fiduciary duty and one more great reason for consumers to ignore referrals coming from their real estate agent when selecting inspection companies.

Savvy consumers should hire inspectors who are not suffering from conflicts of interest such as maintaining a referral relationship with the real estate agent. That basic conflict alone is sufficient warning to beware, but add a kickback to the equation and you've got a more serious problem than a RESPA violation.

2 comments:

Anonymous said...

I would think some of those relationships would have to be diclosed, but maybe not. Your point is correct.

D said...

I agree, Arizona. In PA licensed real estate agents have a duty do disclose any affiliation or monetary benefit they get from a referring relationship. This is a state statute but I doubt that many do.

On the whole, I believe it's a matter of training rather than bad acting. Most agents want to follow rules and laws but unless someone gives them the correct guidelines, few would do the research on their own.