05-Sep-2008

When your clients or customers ask you for a referral for a service provider such as a home inspector or a mortgage broker, be sure to recommend more than one person or business. You should refrain from making any statements as to the quality of the service provided by the persons or businesses you recommend. It is also important to document your referral. In other words, the referral should be in writing and signed and dated by the person to whom you are providing the referral.

Although there are no state or federal laws or regulations that require real estate licensees to handle referrals for service providers in this manner, this course of action is recommended to protect real estate licensees from "negligent referral" claims. (*Please note: RESPA does require real estate licensees to make certain disclosures when affiliated business arrangements are involved.)