My real estate agent offered me verbally that she will pay for the home inspection fees for a property for which I signed an "agreement to sell" with the selling party. A mortgage application was prepared and submitted by my real estate agent to her mortgage agent. The mortgage was however rejected by the bank. In the meantime, my real estage agent got the property inspected by a home inspector and also paid him the home inspection fees on an invoice that was raised to her name. Subsequently, I decided to leave the real estate market till the time I have a better credit history to get a mortgage. Sometime later, my real estate agent started threatening me to pay the home inspection fees to her or else she will file a case in the court and also get a collection agency after me and report to the credit rating agency.

Am I obliged to pay the home inspection fees to the agent now that the deal did not materilize, when she herself had offered to pay this from her pocket?

Well what do you think the right thing to do would be?

She offered to do this with the expectation that you would buy something, and she would then be reimbursed for her expense when the deal closed and she got her commission.

Do you think real estate agents just have $300 - $600 cash to give away pro bono to people just for the heck of it??? Do you realize she has bills to pay, a family to feed?

Granted she was an idiot for offering to do this to you - never in a million YEARS would I offer to pay a home inspection for someone. If you don't have the cash handy to pay for a home inspection how in blazes are you going to come up with the closing costs to buy a house.

Why don't you just let your conscience be your guide. She acted in good faith (albeit stupidly, obviously) with an expectation that you would buy a home and she would be paid.

I'll take the opposing side from Perky.
She offered to pay, you signed an agreement of sale in good faith. You were not approved for a mortgage. End of deal.
Unless there's something left unsaid here (like you agree to pay if the deal fell apart) you have not obligation to the agent.
Sound like paying for the home inspection is a marketing ploy by the agent that she didn't think through.

I'm thinking that this guy is being nagged by conscience, otherwise he would have never come here and posted this.

What he is legally obligated to do may very well be different than what he is morally obligated to do.

Obviously, nobody likes it when their conscience tells them to do something they don't want to do....

Perhaps a compromise would be in order - repay half of the inspection costs.

Taking the high road is often a little painful.

This may have been a good idea IF the Agent had first asked that you obtain a Letter of Pre-Approval (Not Pre-Qualification) BEFORE any P&S or Inspection. I don't understand the part about her having prepared and submitted a Mortgage Application for you either. Wasn't there also an "Application Fee" for that, which was paid by whom? The Agent may have set a precedent by paying for everything on your behalf.

I wouldn't want to be the person interviewing or choosing the Inspector; but I "might" specify that it has to be an Inspector chosen from our list of 18 that we work with in the area. At least that way, I know my exposure is limited to less than $1000. But I don't want to be charged with "steering".

I don't suppose we could structure it so that we only have to pay for "successful" Inspections ? Inspectors don't like that.

Meanwhile, I don't think the OP should worry about it. Is anything in writing? Did you ever promise to repay? Is your name associated, in any way, with the property or the Inspection? This is too little money for her to carry out what are idle threats and just a way of mis-directing the hostility she should direct at herself for thinking up and implementing this Half-Baked concept.

If she continues pursuit, you could consult an Attorney and Sue her for Harrassment or Hounding or Stalking (or whatever you call it in Canadian?) We usually stop chasing people when we realize that seldom can you get blood out of a stone.

Meanwhile, I might do something with her idea AFTER I think about it a little more. Tell her thanks from me when you threaten to sue her.

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Vermont, I don't think this idea was even half baked....it was still batter in the bowl.

Maybe I will reconsider my position on this. The agent is a victim of her own stupidity...

On the other hand, if I were the buyer and this happened I would feel obligated to pay for the inspection. But that's just me.

I think the prospective Buyer placed her trust in the Professional who was thought to know what she was doing . . . . and didn't.


BTW, ever notice that the same people who will eat Raw Dough squirm at the thought of eating Raw Eggs? Odd, eh?

I'm not surprised that this episode emanates from Canada, where they're always saying "eh?".

But I've figured it out . . . . it's all due to their adopting that original Indian Name which is spelled:

"C" "Eh?" "N" "Eh?" "D" "Eh?"

So they can't help it; it's part of the National Identity right up there next to the Queen Mother and Prince Charley.

But, I really like Canadians . . . . they buy a lot of Vermont Property; especially when the Exchange Rate is Favorable, Eh?

In most cases where an agent is offering to pay for the inspection they will be offering to do so only upon a successful completion of a transaction. This would need to be disclosed up front if this was the case otherwise they are out of luck. If I were the agent I also would have held off the inspection until after the mortgage approval was in place unless of course you were on a very tight timeline. Just ask the agent what the Real Estate and Business Broker's Act states with regards to "Advertising Promises" as well as "Steering" (assuming that the agent picked the home inspector without you having a choice...if this is not the case and you were permitted to choose whoever you wanted, then ignore the comment on steering). Also ask what the Code of Ethics states with regards to "Unprofessional Conduct". I'm sure there are more places we could go with this but that should be plenty enough to make them rethink their actions.

As always, I am sure that there are 2 sides to the story though so try to look at it from their side as well and be sure that you weren't in fact told that it would only be paid for if the deal were to close (although by them paying it upfront I would doubt that this was discussed).

Vermont, there wouldn't be any fees originating from a mortgage application up here (in most cases).

I'll side with Perky on this one. Not a bright idea on the agents part, but whats done is done.

Either way the agent spent money on your behalf to get the deal done. Your side of the transaction fell through, and the agent is out money for going above and beyond what he/she should have done to benifit you. For that you decide it did not work out in my favor so screw everyone involved? Don't sound right to me.

Legally you may have a defense? Morally, thats for you decide. Financially, you might want to cut a deal.

Just my opinion.

There is such a simple way of doing this for the agent that it annoys me when they put themselves into this type of situation and then cry when it doesn't work out. If they wanted to offer some sort of rebate then they should have said that the buyer pays for everything on their own and upon a successful completion they will rebate $xxx to the buyer which could have been used for anything. This way there is no problem with steering and the agent has protection from this exact scenario. The agent is the professional and should know better (unless of course they were misled somehow by the buyer in which case my opinion might change).

I think my issue is more with the way that the agent handled it. Threatening to go after the person's credit rating when that is likely of concern to them at the moment having just been rejected for a mortgage. If the agent had have simply called and said hey, this is the deal, I paid for it in the thought that this deal was going to close and as a way to help you out.....it did not close and I am out $xxx as a result, would you mind splitting on the home inspection bill? I do not know where exactly this is but in my area home inspections run from about $300-400 so splitting on it would have been fair IMO. The agent would have learned their lesson but also hopefully maintained a good working relationship with the buyer so that once the buyer's credit rating improved they could work together again. If the buyer refused, well, too bad for the agent.

Just another question regarding the differences between our way of doing business and that of our Neighbors to the North. Is it common for:

I've never heard of such a thing! Is it common for a Canadian Agent to go so far as to actually prepare the Mortgage Application for their Clients? That's really facilitating the Transaction, Eh?

And really . . . . How likely is it that this person was an actual "Client" and not just a plain old Customer? These words are not interchangeable "here".

The vast majority of cases "here" the person would be a client as opposed to a customer. This is something that would be discussed over and over again in our paperwork regarding agency relationships and which one you are in. I have never actually prepared a mortgage application for a client but do know an agent who does (well, now he is also licensed to work as a mortgage agent, as will I at some point this week).



Eh.

Who signs such an Application? Who's responsible for the accuracy of the information contained therein?

The submission of an Application for Financing is a very grave activity and knowingly submitting false information is the equivalent of committing perjury in many jurisdictions.

I cannot imagine performing such an activity on behalf of another financial entity . . . . meaning the Purchaser.

The application would actually be done by the Buyer but with the assistance of the agent (I would hope). The reason for doing this with the agent that I mentioned is due to a language barrier with many of his clients and he is able to explain the application in their own language.