Are you Risking Your Reputation?

by | Sep 1, 2017 | Legal Tips

Clients expect agents to provide recommendations for services related to the real estate closing process. Most buyers and sellers don’t know a mortgage company, repair company or closing attorney.  An agent could simply decline to provide any recommendations in order to avoid any risk but that would not be providing the quality service expected by your clients. Over the next few posts we will examine how your vendor recommendations can land you in hot water.

One of the biggest mistakes that real estate agents make is recommending vendors based solely on price.  While we recognize that it is often prudent to consider cost, it should not be the driving factor in recommending a vendor.   The areas we notice the most price shopping is with repairs, lenders and closing attorneys.

Regardless which party you represent, recommending the cheapest inspector or repair company is extremely risky. If your seller client agreed to make repairs and they use the cheapest company whose work is shoddy, the seller could find themselves in litigation post-closing due to the failure to make proper repairs. If you represent the buyer, your client would want quality over pricing.  Recommending a vendor solely based on price is counter to their main goal.

When selecting a lender, the cheapest loan may come at a huge cost.  There are many out of state lenders who offer low interest rates or fees. While many are fine lenders, some use price as a gimmick to lure your client. When your client selects one of these lenders, they sometimes find the cheap cost comes at the sacrifice of customer service.  Communication is non-existent, updates are few, you never talk to the same person and the closings are delayed even past the contract close date.  Encourage your clients to focus on lender service. Recommend someone that they will work with your client personally and not put their call in a queue for the next available operator. Columbia and Greenville both have quality lenders in our communities.

Lastly, no one hires a doctor or accountant based on price. Why would you do so with your attorney? Closing attorneys are not all the same and the part that you see at the closing table is the smallest part of the legal work. The quality of a closing attorney is the work they do prior to closing when contracts are reviewed, the title records are abstracted, title issues are cleared and corrected and title insurance policies issued. Quality attorneys spend a significant amount of time doing these tasks while cut-rate lawyers usually don’t.  The problem is that you often will not know the corners the cut-rate attorney cut until your client goes to sell their house and those issues arise.

Therefore, when recommending vendors pay more attention to the quality of their work versus the prices they charge. When it comes to real estate you get what you pay for.

IN FIVE WEEKS JOIN US FOR OUR ANNUAL REAL ESTATE AGENT CHARITY FUNDRAISER FOR THE SOUTH CAROLINA MILITARY FAMILY CARE ASSOCIATION.  This year’s sponsors include: Columbia Fireflies, KW Beverage, Executive Construction Homes, Great Southern Homes, Blue Ribbon Homes, New Start Homes, Guild Mortgage, Movement Mortgage, Foundation Mortgage, Academy Mortgage, Clark’s Pest Control, SCANA Gas, 2-10 Home Warranty, Lamplighter Insurance, Giles Insurance, Look2Homes Marketing, Consolidated Multiple Listing, Building Industry Association of Central South Carolina, Southeastern Insurance Consultants and Mt. Valley Foundation. See you at Spirit Communication Park from 5:30 to 9:00 on October 5.

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