Referral

How can I Buy Agent Referrals? Or Why I don’t give out Chocolates and Pens.

A few years ago the Construction Contractor’s Board did some revising to one section of their “Standards of Practice for Home Inspections.”  The section referred to gifts or rewards for the purposes of referrals.  It was always a little ambiguous and in order to clear up some confusion they posted 4 pages worth of, “what the rule really means.”

If you would like to read the post in its entirety it is here: http://ccbed.ccb.state.or.us/WebPDF/CCB/Publications/HI_FAQs.pdf

Here are the highlights as I see it:

2. May a home inspector advertise on a website

containing listings for homes for sale? In general, the

answer is yes. However, if the website is maintained by a

real estate agent and the home inspector buys the

advertisement to induce the real estate agent to refer

business to the home inspector, the practice is prohibited.

3. May a home inspector advertise on a real estate agent’s

website if the home inspector did not pay for the

advertisement? Yes, so long as the home inspector did not

pay the real estate agent nor give the real estate agent

anything of value.

10. May a home inspector share the cost of joint

advertising with a real estate agent? No. The real estate

agent would receive the benefit of the reduced cost of

advertising. Joint advertising likely implies a recommendation

of the home inspector by the real estate agent.

11. May a home inspector hand out to the general public

pens, notepads, magnets, coffee mugs, calendars,

candies or similar items with the home inspector’s

name? Yes. The rules do not prohibit home inspectors from

providing items of nominal or actual value to the general

public or to potential or actual customers.

12. May a home inspector deliver to a realty agent pens,

notepads, magnets, coffee mugs, calendars, candies or

similar items with the home inspector’s name? No.

Since the items are likely to be used or consumed by the

realty agent, the implicit purpose is to encourage a referral.

The conduct is prohibited. It does not matter that the items

may have only a nominal or small value. The rule does not

distinguish on the basis of the value of the items.

20. May a home inspector with a booth at a realty agent

trade show offer a (relatively modest) door prize torealty agents?

No. Since the door prize is intended for

realty agents, to obtain business referrals, the conduct is

prohibited.

21. May a home inspector with a booth at a realty agent

trade show offer chocolate candies to the realty

agents? No. Since the chocolate candies are intended for

realty agents, to obtain business referrals, the conduct is

prohibited. The new rule does not distinguish on the basis of

the value of the item provided.

22. May a home inspection company that operates on a

national or regional basis hold a contest or drawing,

open both to the general public and to realty agents,

and give out randomly won prizes? Yes. Presumably,

there is no distinction between entrants, be they realty agents

or other members of the general public. (There may be other

government regulations that restrict contests or drawings.

Our answer does not address those laws.)

These rules and definitions come from a good place.  There is no good that comes from buying referrals.  Inspectors that do not precisly understand that they are contracted to protect the client’s interest may have feelings that they are there to help the referring agent.  This only creates bad feelings and distrust throughout the entire realestate process.

My main referral source is the great agents that recommend me to their clients.  The only reason these wonderful agents recommend me is because I protect their clients and, indirectly, their good name and real estate license.  These agents realize that even though deals may fall apart by the time I am done it is because of the home’s condition and the inability of the buyer and seller to come together.  For better or for worse their clients should know as much as possible about their home before the deal closes.