I get asked quite often by home buyers for referrals for contractors such as electricians, roofers, plumbers, etc. I do not give references out, even though I have friends in the trades. I would rather the buyer find their own contractors.
The level of trust the buyers have placed in me is enormous, and to risk having a friend possibly cause a problem if something goes wrong is more than I am willing to do. I have heard stories from real estate agents of inspectors handing out cards for his friends who own contracting companies, but I feel this is a conflict of interest.
I refer them to AngiesList.com, or recommend they speak to a friend or co-worker to find a contractor who has done work for someone who was pleased with the finished product.
The one time I recommended an electrician was to my brother and to a friend for an electrical service update - two big jobs. The electrician screwed up both, and my friend almost had an electrical fire, and my brother called me a month later to say water was dripping from his electrical panel. Yikes!
I was quite angry and embarrassed that I recommended someone who cut corners and did a crappy job. I am just glad this wasn't for a client.
Find your own contractors! - Ray
I have a complete list of home inspectors (it's basically just as sheet with copies of business cards) to give to buyers or sellers. They can pick their own. I do the same with lawn services, or whatever other professional the client is asking about. I tell them my list isn't complete and that they should pick whomever they wish.