Hi. My husband is a Realtor in Alabama. He wants to get his Home Inspector’s License so that he can be active in both professions. Here’s my question…
Can he be an ACTIVE Realtor and an ACTIVE Home Inspector at the same time AND can he can he also preform HI for clients who’s home he is selling/buying?
-Janie
Yes
Nope…not if he has a financial interest in the property, i.e. the commission, just a little conflict of interest there doncha think?
If he did not know the answer to the second part of that question, he may should only stick to one of the professions.
Your husband would have his credibility strained if not destroyed. His “double dipping” would also strain the reputation of your entire office and staff. My best advice is for him to remain an “ACTIVE Realtor” and forget about being an inspector.
Most clients stay away from Home Inspectors that are referred by a Realtor. They see that as “A conflict of interest.” Can you imagine what they would think when they find that “Their Inspector” also works as a Realtor!
An excerpt from the NACHI Code of Ethics.
*]The NACHI member will have no undisclosed conflict of interest with the client, nor will the NACHI member accept or offer any undisclosed commissions, rebates, profits or other benefit, nor will the NACHI member accept or offer any disclosed or undisclosed commissions, rebates, profits or other benefit from from real estate agents, brokers or any third parties having financial interest in the sale of the property nor shall the NACHI member offer or provide any disclosed or undisclosed financial compensation directly or indirectly to any real estate agent, real estate broker or real estate company for referrals or for inclusion on lists of preferred and/or affiliated inspectors or inspection companies.
Everyone who has answered is not in Alabama, including me.
However, such a scenario is allowed here in San Diego. The major brokerages call it “one-stop shopping” and it’s very convenient for some Clients who want it. As with all things real estate, just practice full disclosure like the major brokerages do.
It is, indeed, a conflict of interest for him to sell and inspect the same home.
Depending on what Alabama and the Alabama AR thinks about it. Usually full disclosure, in writing, resolves such conflicts of interest.
I did indeed answer based on my state’s requirements, obviously Alabama laws may be different and should be further investigated.
My state says: Under Section 1102.303 of the Texas Occupations Code, an inspector may not act in a transaction in the dual capacity of inspector and either (1) undisclosed principal or (2) broker or salesperson. Therefore, it would be a violation of 1102.303 for you to inspect any property you as a salesperson had listed or were personally involved with in any way.
Mike,
Would you agree that there are things that may vary in legality from jurisdiction to jurisdiction…but are still the wrong thing to do?
The question that was asked, as I read it, is NOT whether or not such an activity is “legal”, but whether or not it is a conflict of interest.
Illegal? Maybe.
Conflict of interest? Clearly
SLEAZY? Most definitely!
Jim…Oh, I do agree with that 100%. That’s why my 1st response was not qualified.
Code of Ethics Government entities free-use license. Spanish version The National Association of Certified Home Inspectors (NACHI) promotes a high standard of professionalism, business ethics and inspection procedures. NACHI members subscribe to the following Code of Ethics in the course of their business.
[ol]
[li]Duty to the Public[LIST=1][/li][li]The NACHI member shall abide by the Code of Ethics and substantially follow the NACHI Standards of Practice.[/li][li]The NACHI member will not engage in any practices that could be damaging to the public or bring discredit to the home inspection industry.[/li][li]The NACHI member shall be fair, honest, impartial, and act in good faith in dealing with the public. I do not see how your husband could even claim to be “Impartial” while acting as a Home Inspector for your office. I think that a Judge and Jury would agree with me. [/li][li]The NACHI member will not discriminate in any business activities on the basis of race, color, religion, sex, national origin, familial status, sexual orientation, or handicap and shall comply with all federal, state and local laws concerning discrimination.[/li][li]The NACHI member shall be truthful regarding his/her services & qualifications.[/li][li]The NACHI member will have no undisclosed conflict of interest with the client, nor will the NACHI member accept or offer any undisclosed commissions, rebates, profits or other benefit, nor will the NACHI member accept or offer any disclosed or undisclosed commissions, rebates, profits or other benefit from from real estate agents, brokers or any third parties having financial interest in the sale of the property nor shall the NACHI member offer or provide any disclosed or undisclosed financial compensation directlyy or indirectly to any real estate agent, real estate broker or real estate company for referrals or for inclusion on lists of preferred and/or affiliated inspectors or inspection companies.[/li][li]The NACHI member will not communicate any information about an inspection to anyone except the client without the prior written consent of the client, except where it may affect the safety of others or violates a law or statute. If you are married to a Real Estate agent / Home Inspector I can assure you that this confidentially would not last long. [/li][li]The NACHI member shall always act in the interest of the client, unless doing so violates a law, statute or this Code of Ethics.[/li][li]The NACHI member shall use a written contract that specifies the services to be performed, limitations of services and fees.[/li][li]The NACHI member shall comply with all government rules and licensing requirements of the jurisdiction where he/she conducts business.[/li][li]The NACHI member shall not perform or offer to perform, for an additional fee, any repairs or associated services to structure on which the member or member’s company has prepared a home inspection report, for a period of 12 months. This provision shall not include services to components and/or systems which are not included in the NACHI standards of practice.[/ol][/li][li]Duty to Continue Education [/li][ol]
[li]The NACHI member will comply with NACHI’s current Continuing Education Requirements.[/li][li]The NACHI member shall pass the NACHI’s Online Inspector Exam once every calendar year.[/ol][/li][li]Duty to the Profession and NACHI [/li][ol]
[li]The NACHI member will strive to improve the Home Inspection Industry by sharing his/her lessons and/or experiences for the benefit of all. This does not preclude the member from copyrighting or marketing his/her expertise to other Inspectors or the public in any manner permitted by law.[/li][li]The NACHI member shall assist the NACHI leadership in disseminating and publicizing the benefits of NACHI membership.[/li][li]The NACHI member will not engage in any act or practice that could be deemed damaging, seditious or destructive to NACHI, fellow NACHI members, NACHI employees, leadership or directors. Member(s) accused of acting or deemed in violation of such rules shall be reviewed by the Ethics committee for possible sanctions and/or expulsion from NACHI.[/ol][/li][/LIST]All in all I see this as a recipe for disaster not only for the Realtor husband but for the entire firm. This would leave any ***dissatisfied ***client with plenty of reasons to sue not only the inspector but the entire Real Estate company.
I can GUARANTEE you that as a “NEW” inspector that your husband would miss some items.
Some could be BIG ticket items that would land him in a courtroom and most probably you and your compnay would be right next to him.
I think that you know that we live in a litigious society. You are painting a LARGE target on your back.
The NACHI Code of Ethics has no bearing if the person is not a member of NACHI, and Janie’s post clearly states, courtesy of NACHI:
So I can only presume that the person for whom she is inquiring is also not a member of NACHI.
Very simply…Anyone can most definitely wear two hats, but you can’t swap hats under the same roof. Sell your Real Estate and allow the buyer to find his/her own HI and perform your home inspections, but not on the same properties you have an interest in.
It’s not a matter of belonging to Nachi, it would be unethical regardless of affiliation to any organization anywhere legal or not in my opinion. Whatever that’s worth, Ken
AGREED 100%
Maybe he could be pioneer in Real Estate. Work as a buyer’s agent for a flat fee paid whether or not his client bought a home. Then he could actually work in the best interest of his client without worrying about his pocketbook. Would you find it sleazy for him to be the HI in those sales?
That’s a very broad statement that most here would probably disagree with.
Yes. The buyer’s agent still profits from a sale.
OH WHAT A TANGLED WEB WE WEAVE,
WHEN WE FIRST ATTEMPT TO DECEIVE.
Nachi Member, non Nachi member, it matters not.
All of the little excuses, caveats, and different scenarios that anyone can conceive are not going to change anything.
Disingenuous is disingenuous, common sense is just common sense and all of the vacuous statements are not going to fool anyone.
This is a CLEAR conflict of interest.