Feb 11, 2013
WaPo’s consumer advice shows danger for Realtors
11 Feb 2013
Posted by Andrew Kantor
The Washington Post’s real estate section recently ran an article for consumers, “Get ready for the start of real estate season.” Essentially, it offers some suggestions for preparing your home to be sold.
There’s nothing particularly new or exciting, but that’s OK — this is the kind of article that gets run every year.
What caught my eye, though, was this bit:
Choose agents, contractors and other professionals carefully.
Many agents have preferred professionals they deal with, including mortgage companies, home inspectors, photographers, stagers, professional cleaners and contractors. (Emphasis mine.)
“We can save people a lot of headaches,” says Rachel Valentino, a Bethesda/Chevy-Chase-based agent….
Hmm. I made a quick run down the hall to the cavernous offices of Blake Hegeman, real estate attorney extraordinaire. “Preferred professionals?” I asked. “That doesn’t sound like a good idea.”
It isn’t, he said. If a client asks for a recommendation of a contractor, inspector, or any kind of professional, the one thing you don’t want is to have a “preferred vendor.”
That’s for two reasons. One is RESPA: You can’t be paid for referring someone, and you shouldn’t even give the appearance of being compensated. (“Caesar’s wife must be above suspicion.”)
The other is the potential for a negligent referral suit. What if the contractor screws up. (Get it? “Screws up”? Ha.) What if the inspector misses something important? Remember what country you live in, and how easy it is to be on the wrong end of a lawsuit.
Best practice: Offer your client several options. “John Doe, Jane Smith, and Chris Johnson have all done good work for my clients before. You should check them out.”