I need the most clarification on the following scenario.
Mr. Smith, a Real Estate Broker is a Division 1, ST. Cert. Gen. Contractor,and a St. Cert. Home Inspector. (all current Florida / active licenses)
Mr. Smith is president of Smith Builders inc. which is the parent company of SMT Realty of which he is registered with the state and is the qualifying broker.
Scenario 1,
Mr. Smith is advertising as a Real Estate Broker, Builder and a Home Inspector that can perform a free preliminary, Property Condition Report (PCR) on every home he shows. Mr. Smith receives a call from Ms. Jones to show her some property based on his advertising. He has an appointment with Ms. Jones to act as a Buyer’s Agent and has her sign a Buyer’s Agent agreement prior to showing her some properties he has selected.
SMT Realty has a disclaimer in his Buyers Agent listing agreement that the Property Condition Report (PCR) is not a written 8 point Home Inspection but is a visual general condition inspection with no liability associated with the findings or lack thereof typically done for banks by Realtors. The buyer is also advised to seek an independent Home Inspector to protect her interest on any properties she may be interested in before closing. She signs a contract on one of the properties and has an independent Home Inspector inspect the property and soon after closes.

Has Mr. Smith done anything wrong? Has Mr. Smith violate any laws or state statues? If so what ones and why?
If it is illegal, is there another way to do the same thing legally?

[quote=Halyard]
I need the most clarification on the following scenario.
Mr. Smith, a Real Estate Broker is a Division 1, ST. Cert. Gen. Contractor,and a St. Cert. Home Inspector. (all current Florida / active licenses)
Mr. Smith is president of Smith Builders inc. which is the parent company of SMT Realty of which he is registered with the state and is the qualifying broker.
Scenario 1,
Mr. Smith is advertising as a Real Estate Broker, Builder and a Home Inspector that can perform a free preliminary, Property Condition Report (PCR) on every home he shows. Mr. Smith receives a call from Ms. Jones to show her some property based on his advertising. He has an appointment with Ms. Jones to act as a Buyer’s Agent and has her sign a Buyer’s Agent agreement prior to showing her some properties he has selected.
SMT Realty has a disclaimer in his Buyers Agent listing agreement that the Property Condition Report (PCR) is not a written 8 point Home Inspection but is a visual general condition inspection with no liability associated with the findings or lack thereof typically done for banks by Realtors. The buyer is also advised to seek an independent Home Inspector to protect her interest on any properties she may be interested in before closing. She signs a contract on one of the properties and has an independent Home Inspector inspect the property and soon after closes.

Has Mr. Smith done anything wrong? Has Mr. Smith violate any laws or state statues? If so what ones and why?
If it is illegal, is there another way to do the same thing legally?
[/quote]

There is nothing complex about this scenario as it, or similar situations, are being played out around the country all of the time.

I believe Florida has just enacted their Home Inspection laws and there is nothing written in it to prevent a RE Agent/Broker from working both sides of the fence as long as they disclose it. So legally it is feasible.

It might be legally acceptable but it violates many ethical boundaries and Mr. Smith should be hung from his gonads! Mr. Smith is using their credentials to draw consumers into using his services as a Broker. Mr. Smith knows full well that consumers are not sufficiently knowledgeable on the home purchasing, inspection, etc., process to handle it on their own. Mr. Smith is leading unsuspecting buyers to believe that his free PCR is as good as gold. Most consumers will listen to their Broker and trust them. Most consumers will then believe that Mr. Smith has provided them something just as good as a full and comprehensive home inspection. Most consumers will then forego an inspection to save money. Mr. Smith will try to cover his rear end with the disclaimer and trying to get a buyer to sign away their rights to sue him later. Any Broker/Agent that tries to pull this stunt is most likely also talking a lot of smack to the client which never makes it in writing. Mr. Smith's PCR's are probably whitewash and highly inaccurate. The buyer will purchase it only to later find out they bought a money pit! Mr. Smith was already laughing all the way to the bank to cash the commission check.

If you are Mr. Smith then forget about the idea and keep your businesses separate. If you are not Mr. Smith and are another Agent you should turn Mr. Smith into the RE Licensing Agency. If you are a consumer that was duped by Mr. Smith you should speak with an Attorney and sue Mr. Smith. If you sue make sure you take everything he has, including the diaper pail used for the baby's soiled diapers. Put Mr. Smith and family out on the street!

When did it become unethical to use one's credentials to market to potential clients?

Mr. Smith discloses that his inspection is not on the same level as a true home inspection and recommends that his clients get an independent home inspection done.

This disclosure sounds like it covers all the bases.

You are making a lot of assumptions about this agent lying to clients without any knowledge of this agent. Your calling this agent a liar and the other names you use makes me wonder just how ethical you are.

Thank for your comments. I was hoping for a few more comments before signing back on.
I think Mr. Big got off target a little. I know better that to respond to direct or indirect and or personal criticism from posters. All It does is get away from the subject and I'm here for pertinent advice and especially not getting into a pissing match. All I will say is thank you for your opinion I'll take any facts into consideration and disregard the rest.

Big Toe thank you for your feed back it makes the point I was going to bring up about credentials more relevant.The more you know something about what you are selling the better you should be at doing your job. I think it would be a good designation for Realtors to have, is something like a GRI that was in home construction. Just a thought not anything I pushing.

The State of Fl. under DBPR (dept.bus.prof.reg) regulates these licenses (except Captain)and will yank your ticket for and violation they can get you for. I have posed this question directly to the DBPR and their official response was they were not allowed to interpret state statutes to licensees. WTF? So here I am.

I was more concerned about my particular state statutes and from Fl Realtors that may have some pertinent knowledge on this subject.I have a few more scenarios I plan to run by this forum but I am going to post them separately. I'd like to see if I will receive more on this subject from this post.

Thanks in advance for the new posts that chime in.

Sounds like a matter of prior disclosure to me and Mr. Smith has covered his bases.

I somewhat agree with mrbig that it is praying on the ignorance of the everyday buyer. It may not be illegal, but it sure sounds devious; and I would reckon that if a few people got wise to what's going on, Mr Smith's name is going to be synonomous with conflict of interest. But in the end, I suppose it's really no different than dual agency.

while I am not familiar with FL state law, I can't see any problem with his activities. Mr. Smith sounds like an astute businessperson.

There is nothing to prevent him from being a combination of a realtor, inspector and contractor. In fact, that combination should make him a better agent, allowing him to advise his clients on repairs, costs, defect, etc.Proper disclosure is key in this scneario, and it sounds like he is doing that.

While none of this sounds illegal, there are some definite ethical boundaries that are easily crossed. I insist on an indepdendent inspector for all of our properties that is NOT tied to our compensation. If a property is a turd, I want someone to say that and protect the client. In the scenario that you describe, is Mr. Smith just adding expertise to his real estate broker abilities, or is he using his inspector background to write up inspection reports that are favorable so he can avoid a separate inspection and get a comission. Seems a very fine ethical line to me that is potentially ripe for abuse.

I think you need to run this scenario by your attorney. You may be increasing your liability by holding yourself out to your client as the expert in multiple fields. I would be concerned that buyers may not clearly understand your differences in a PCR and a Home Inspection. Some buyers don't get the difference in an FHA inspection and a Home inspection and now you are throwing in a 3rd category.