The Real Estate Agent’s Duty
- Jan 14, 2024
- 2 min read
Updated: Mar 5
What Does the Client Need?
Just for a moment, let’s assume that you’re a real estate agent. The seller has accepted your clients' offer and now, with your help, your clients must choose a home inspector. Should you steer them toward the inspector who writes the softest reports? Should you steer them toward the inspector who pays to be on your office's preferred vendor list? Should you help them find the cheapest inspector? The answers to these questions are of course, No, No, and Heck, No.
Agent's Fiduciary Duty
Real estate agents have a fiduciary duty to their clients and, therefore, should be recommending the very best inspectors. If a real estate agent recommends a patty-cake inspector, an inspector who indirectly pays for an agent's recommendation, or a cheap inspector, the agent potentially violates their fiduciary duty to their client.
The National Association of REALTORs defines an agent's duties in their Code of Ethics. Article 1 requires an agent to protect and promote their clients' interests. Article 6 requires an agent to disclose any financial benefit they may receive from recommending related real estate services (this also includes any benefit to an agent's broker).
Because most real estate agents get paid only if the real estate transaction successfully takes place, the personal interests and the fiduciary duties may already conflict. Agents should not make the situation any worse. The best way to avoid negligent referral claims, to operate ethically, and to fulfill the fiduciary duty is to help the client find an inspector based merit and value.
No Assurances
No real estate agent can guarantee the thoroughness of any particular inspector. There is a strong correlation between a home inspector's fees and the inspector's competence (in other words, you get what you pay for). An agent that helps their client find a cheap inspector for the biggest purchase of their life may well be in violation of their fiduciary duty.
How to Choose?
When in doubt, the agent and client should shop merit and value, not price. Don't seek out the cheapest or the most expensive inspector. Seek out the most qualified, find the inspector that will provide the service that you need and don't get nickled and dimed on services you don't need. Do not find yourself paying for all the fancy equipment in the inspector's vehicle that does not get used on your home. All home inspectors should be competing on merit and value, not price.
In Summary, a real estate agent should guide a client to ask pertinent questions of their potential home inspectors. Questions like; What do I get for the price?, How long have you been an inspector?, What do you inspect? Do you provide a comprehensive report?, How long before I see the report? Can I attend the inspection?, Are you local?, Will you be available after the inspection? The list goes on and on. Your potential home inspector should be available to answer any and all questions you may have before being hired.
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