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Bribery in the Biz

By
Home Inspector with Home Inspections of Puget Sound

I get calls numourous times a year from real estate offices asking me if I want to be on their preferred list of Inspectors.  Of course I always tell them I would as long as it's free, and it is never is. 

 

I think this practice is disturbing, unethical and likely illegal.  One company actually told me that the only way I would be recommend for that office was to buy "desk space".  WTH? Are you kidding me?  

I had another very big company say nearly same thing.  They have this service they offer to help home buyers, including recommending professional services like inspectors that have to pay off the Real estate firm.

By the way, in both of the above examples, I work with lots of brokers in these companies.  I bet most of them don't even know that their corporate list of preferred providers is a list based on bias and bribery.

It is against the standards of practice for any inspector to participate in such an arrangement.

 According to the ASHI Code of ethics:

"Inspectors shall not directly or indirectly compensate realty agents, or other parties having a financial interest in closing or settlement of real estate transactions, for the referral of inspections or for inclusion on a list of recommended inspectors, preferred providers, or similar arrangements."

 

Comments (40)

Rebecca Reynolds
Right Style Realty - Newton, MA
Achieve everything in Real Estate with Right Style

In our office we have other vendors who do lease office space from us and yes, I'm sure part of the calculation on the part of the vendor is that as a supporting business to real estate, they just might pick up more business with the visibility that comes with being at our office and immediately available to help/meet/answer questions etc... So getting a call from a Real Estate office offering to lease space is one thing but calling to discuss "preferred vendor" status and then requiring financial return?  Doesn't sound right to me.

When I work with clients, I let them know that the company in our building is an option and NOT the only option. They are convenient for sure and that doesn't matter in the long run if they aren't the right vendor for the job.

As for the advertising, I can actually offer add space on my individual website as well and haven't done it yet. It would help defer costs associated with having the website/domain names & work done to improve SEO. Someday, maybe I'll use it.

I agree with Paula, Vendors should be preferred when they earn it through action, not through $$

Sep 28, 2012 10:50 PM
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTORĀ®, Brick & Howell NJ Homes for Sale

I've not heard of this in my area (although it could be happening) and would not appreciate a bought referral. If someone does a good job for a client, they are on my list for another future opportunity. I think it really has to be that simple.
Bruce

 

Sep 28, 2012 11:11 PM
Michael Hobbs
PahRoo Appraisal & Consultancy - Chicago, IL
SRA, LEED GA, RAA

It is one thing to require money for advertising space, it is quite another to require money to be on a preferred list. 

How seedy is it when a client is being referred to a provider, because of the provider paid for inclusion on a preferred list, and there is no gauge of quality.

Indeed it is a fine line, but a line indeed between the two.

Sep 28, 2012 11:34 PM
Chuck Mixon
The Keyes Company - Cutler Bay, FL
Cutler Bay Specialist, GRI, CDPE, BPOR

As a locksmith I have turn down paid list since the customer I have keep me busy and i give them priority.  Why pay to be on a list the I have to turn down the work for a few hours before I can get to them.

 

Sep 28, 2012 11:42 PM
Rob Ernst
Certified Structure Inspector - Reno, NV
Reno, NV-775-410-4286 Inspector & Energy Auditor

Te old pay to play. Yes this is against pretty much all Home Inspection Association Code of Ethics. I do get asked to buy ad space. I ask them if I don't by ad space can I still get on your office list? Because if I can't then call it what you will but it's still pay to play. I get about 25% of my business coming directly from buyers and it's growing. They don't trust that the "Agents Inspector" is impartial and programs like this are why.

Sep 29, 2012 12:25 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Karen Anne Stones #1 summer cubicle above comment  got me laughing...To leave your home dressed the way you like and to have to be dressed the way the jails prefer it is reason to really pause....However, some people insist on that change of clothing...

Sep 29, 2012 12:33 AM
Chuck Ward Local Video Marketing
Florida Mobile Fusion Mobile, Marketing, Local SEO - Tampa, FL
SMS Marketing, Google Plus Local Pages

You should start your OWN Network (ask me how)

Sep 29, 2012 12:34 AM
Adrian Willanger
206 909-7536 AdrianWillanger-broker.com - Seattle, WA
Profit from my two decades of experience

Good Morning, I'm sure this practice goes on. I totally disagree with any company that has a policy regarding having to buy ones way on to their list of preferred vendors. Thanks for the post. 

Sep 29, 2012 01:14 AM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

I was unaware of this practice, but then I have my own list that I use. Never received a dime to get on it.

Sep 29, 2012 01:17 AM
Monique Keith
Ahwatukee, AZ
Ahwatukeenulls Favorite Realtor, Buyers Agent with

This is news to me, but I guess I can see how that could happen. In Arizona you get a pink jumpsuit for both men and women.

Sep 29, 2012 02:46 AM
Bryan Robertson
Los Altos, CA

I have never had an inspector or any other service provider imply a gift or perk as a means of enticing more business.  The best I can expect is better treatment when I have a rush order.

Sep 29, 2012 02:53 AM
Debbie Cook
Long & Foster Real Estate, Inc - Silver Spring, MD
Silver Spring and Takoma Park Maryland Real Estate

A good inspector is worth his or her weight in gold.  I have always stuck with the 2 or 3 inspectors I've been using for the past 20 years I've been in the business.  It also says something good that these inspectors have been around in the business as long as 20 years.

Sep 29, 2012 03:18 AM
Nan Jester
Exit Real Estate Gallery Jacksonville Beach, FL - Jacksonville Beach, FL
Realtor, Exit Real Estate Gallery

Dang, it never ceases to amaze me what some companies are using as ways to make a dime, even if it is unethical or illegal.

 

Sep 29, 2012 04:18 AM
JJ and Suzanne Greive - Seattle Area ASHI Inspections
Home Inspections of Puget Sound - Seattle, WA

I think all brokers should ask for the source of the recommended providers comes from. If your corporate list is based on bias and payoffs, show the management this.
According to Washington Administrative Code 308-408C-020:
"A Home inspector may not provide compensation, inducement, or reward directly or indirectly, to any person or entity other than the client, for the referral of business, inclusion on a list of recommended inspectors or preferred.providers or participate in similar arrangements. The purchase and/or use of low-value advertising or marketing services or products that does not exceed ten dollars per item, is not considered inducement or reward."

Sep 29, 2012 04:22 AM
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

When asked, we tell our buyers about the inspector that we normally recommend.  But, it is their call. 

And, no, we don't ask for anything in return.  (A referral sometime would be nice, but...)

Sep 29, 2012 04:36 AM
Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

I will not work with anyone that I know that takes a bribe. 

Sep 29, 2012 06:02 AM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

I had never heard of this...I dont practice any such thing but I am sure a lot of companies do.

Sep 29, 2012 06:26 AM
Team Honeycutt
Allen Tate - Concord, NC

It seems there are always people who try to get ahead by bending the rules. Greed can make people do strange things and beings out the bad in a lot of people.

Betty

Sep 29, 2012 06:38 AM
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

JJ:

That is common practice in my area that I know of.  I certainly would not recommend someone who paid me for an endorsement.  Not a good practice.

Sep 29, 2012 02:34 PM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

It would seem to me that such a process would REQUIRE that they disclose the "business relationship" they have between the realty office and the inspector.  Of course, then the client is probably going to be less likely to choose them, as noted above by Rob (#24).

Sep 29, 2012 04:07 PM