NAR Disputes HUD Ruling on Payments From Home Warranty Companies
by Bob Hunt
In the June 25, 2010 issue of the Federal Register, the department of Housing and Urban Development (HUD) published a response (Docket # FR-5425-IA-01) to a 2009 request from the National Association of Realtors® (NAR) asking for clarification regarding compensation paid by home warranty companies to real estate agents and brokers. In particular, NAR wanted to know HUD’s position regarding such compensation when given on a per-transaction basis.
“It is still ok, presumably, for a broker to have a flat fee marketing services agreement whereby compensation from a home warranty company is received for general marketing to consumers through agents, and such compensation is not contingent upon specified purchases of the home warranty product.”
Some larger home inspection companies here in KC are probably doing this with home inspections. This violates many codes of ethics, but these larger companies here are ASHI based, who protect their own. Probably the reason I am not getting any business. It has been always pay to play, and always will be. A buyer pays $575 for a $300 inspection, and the $275 goes to the agent’s office/company. Who knows for sure, and is always hard to prove. Personally, I am CMI committed, and abide by their codes of ethics. However, after 10 years, my business is failing, and I may have no choice but to join these troft feeders.
It just may be me or the HWC companies in this area, but I have never heard of a HWC actually paying out on any claim. They usually defer by saying that the issue was pre-existing.
Waste of money, in my opinion, and a conflict of interest for a professional.
