Dear Barry,
In one of your columns, a buyer was annoyed that her agent would not recommend a home inspector by name. I’m a Realtor, and our company has a policy against recommending any service providers, and that includes termite inspectors and home inspectors. We simply hand our clients the Yellow Pages and point out the section where inspectors are listed. Past experience has shown us that this is the safest way to do business.
If a home inspector that we recommend makes a mistake, we could be sued for making that referral. We’d like to provide the kind of personal service that includes a list of reliable contractors and inspectors, but our hands are tied by fears of litigation, much to our dismay and disappointment. How do you view this position? –Jennifer
Dear Jennifer,
Your fear of litigation is understandable and shared by many — not just in the real estate profession, but by nearly everyone in business, including grocers, doctors, plumbers, engineers, teachers and musicians. Trial attorneys, for whatever reasons, good or bad, have removed from our society the trust that was once communicated by a promise and a handshake. Instead, we have pages of fine-print legalese that no ordinary person can understand. Yet none of these documents eliminates the likelihood of lawsuits: They merely provide talking points for that dreaded day in court. But there are still ways of operating in this defensive business environment, without abandoning the kind of personal service that we prefer to offer in good faith to our customers.
The phone book approach to home inspector selection may not provide the liability protection that Realtors seek. In fact, it may pose a higher level of exposure to tort liability. The problem with a Yellow Pages selection is that a buyer may randomly hire a home inspector who has very limited experience or someone who is not very thorough or qualified and who may fail to disclose significant property defects. If a buyer chooses a mediocre home inspector from the phone book and the agent fails to give warning to point out that there are better home inspectors, that agent could be vulnerable to a lawsuit, without having made a referral.
Fortunately, there is a safer middle ground between recommending a home inspector or supplying a phone book. Instead, you can provide a list of the most qualified home inspectors in the area and let your buyers choose an inspector from that list. In fact, you could ask a number of local home inspectors to each submit a one-page flier outlining their professional credentials and their levels of experience in the inspection business. A packet of these fliers could then be given to every home buyer. Buyers could select their own inspector, but their choice would be an educated one, based on information that would facilitate a more thorough inspection and, therefore, less liability. Run that idea up the flagpole at your next staff meeting and see if anyone salutes it.
To write to Barry Stone, please visit him on the Web at www.housedetective.com.
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