Broker denies agents avoid ‘deal killers’

Q: As a real estate broker, I read your column regularly and with great interest. But I’m troubled about some of your articles’ suggestions that Realtors routinely avoid the most thorough home inspectors; that they even label good inspectors as “deal killers.” This charge seems unfair and in poor taste. Good agents, whether they represent buyers or sellers, want an inspector to perform a thorough inspection. Would you be willing to rethink your position on this?

A: The articles you mention were never intended to offend, but rather to shed light on an entrenched ethics problem that infects not all, but more than a few real estate professionals. This issue is recognized by home inspectors nationwide. The problem stems from an obvious conflict of interest when Realtors refer home inspectors to their clients.

The essence of the problem is simple. Agents do not get paid until the sale is completed, and defect disclosure can make buyers change their minds about the sale. Since the best home inspectors disclose more defects, some real estate agents regard the best home inspectors as “deal killers” — not because those inspectors actually kill deals, but because their thoroughness engenders the fear that they might kill a deal. As a result, some agents do not refer the best inspectors to their clients. Meanwhile, unwary clients assume that they are getting top-notch home inspection referrals from their agents.

Thankfully, there are also many honest, ethical agents who truly represent the interests of their clients: agents who recognize the value of total and unabridged disclosure. Those are the shining stars of the real estate profession, the ones who recommend only the most thorough and qualified home inspectors to clients. Realtors of this caliber deserve praise and recognition for the exemplary work they do.

What we have are two divergent groups of agents — the compromised and the committed — separated by an ethical divide that tarnishes the public image of the real estate industry, while jeopardizing the financial interests of trusting homebuyers.

Home inspection may be the only profession wherein competent work can discourage referrals. If that were not so, only the best inspectors would be recommended by Realtors. Instead, many referrals go to inspectors who are inexperienced and less than thorough in their findings.

Articles that expose these facts may seem unfair or offensive to some. What is more distasteful are the consequences to those homebuyers who have been been misled in the hiring of a home inspector. If such practices did not occur, there would no need for articles such as this one. Hopefully, this problem will be addressed once and for all by leaders within the real estate profession.

• Distributed by Action Coast Publishing. Questions to Barry Stone can be emailed to barry@housedetective.com.