e0109626 Preferred vendor clarification

Identifier: e0109626

Date: 03/01/2002

Question

No question stated on RFI form; In a 15 page fax, petitioner attached a letter regarding Preferred Vendor RFI article published in the ASHI Reporter, expresses concern regarding an ASHI Member who participates in a marketing program, asserts that this program is the same as the "Preferred Vendor" program previously addressed, and attaches additional pages of correspondence and material.

Respons

1.) This is a program associated with a realty company which is determined to be contrary to the ASHI Code of Ethics by e010212. 

a.) The program's web page is identified as "(name deleted) REAL ESTATE",

b.)The realty agents at the realty company clearly expect the vendor (inspector) to support the realty company goals (i.e. sales), and c. )The company's agents state comments like: "I will . . . request . . . that X and Y be dropped from our web site, . . . as a preferred provider for the biggest and best brokerage in town . . ., and . . . do business with people that [sic] are loyal to my profession . . ." (i.e. profession of real estate sales) 

2.)This is an up-front fee type of preferred vendor program, a marketing partnership program, and/or a special relationship program that blurs the lines of inspector's loyalty. And there is no question that the realty company agents want the inspector's results to be beneficial for their home sellers! ". . . to insure better results for our clients." (i.e. home sellers are the "clients" of agents, buyers are their "customers.") 

3.) Conclusion: this is a subterfuge for an inspector referral program, though it is not forced upon the agents. They seem to be free to choose others, though the end result is many inspector referrals where the client is unaware of the basis for the referral. It is best summed up by an agent's comment ". . . how important it is to support the businesses that support us . . ." [i.e. give inspector referrals on behalf of inspectors who support the realty company's goals.] 

4.) Besides paying a realty company for referrals (under the guise of "advertising") being contrary to CoE by previous RFI's, additionally, as stated in other RFI's, participation in programs where the actual basis for referrals (such as supporting a realty company's sales goals) is unknown to the client is a deception of the client contrary to CoE #2 and a conflict of interest contrary to the second paragraph of the CoE. At the NAR Real Estate Website, Articles 6, 7, & 12 are pertinent to this RFI: http://nar.realtor.com/about/ethics.htm.