Scratching each others back...

[eeboater]

Here's an interesting topic for discussion. For everyone who does not know, I work in the mortgage industry. If you have bought a house before you know that there are a million steps involved in the purchase. One of them is the home inspection.

About 2 years ago, one of our employees (Jeff) quit and started a Home Inspection company. Jeff has been coming into our branch, handing out flyers, etc, trying to get business from our company. One of the loan officers (Tom) has been sending him a decent amount of business... about 10-12 inspections over the last year. Unfortunately, Jeff has not been able to reciprocate - which is understandable because he meets his customers AFTER they have already established a relationship with a bank.

Well, two weeks ago, Tom found a house he likes and started the process of purchasing it. He asked Jeff to do the inspection for him because of the working relationship they have established. Last night, Jeff and Tom were at the house getting the inspection done. When the inspection was complete, Jeff asked for $325 for the inspection. Jeff usually charges $275 for the inspection, but Tom needed a Radon test, so Jeff added $50 to the final price.

Here's the topic for debate.

Was it a dumb move on Jeff's part to charge Tom the full price for his home inspection? Would it have been smarter for him to charge enough to just cover his costs because of the referrals he has been receiving from Tom? Tom has now decided he will never send an inspection his way again. Is it wrong/arrogant for Tom to assume he would get a break on the inspection after all the referrals he made?

What do you think?

 

[Ron G]

Re: Scratching each others back...

I never bite the hand that feeds medi dont expect anything but i would like a fair jester,nobody does nothing for free and i dont expect them too,but a jester is nice.

 

[tommays]

Re: Scratching each others back...

The WHOLE thing is unethical and leads to a BIG mess


I had a BIG problem with my last house because the different partys involved in the transaction ARE supposed to be independent and working to give me honest information NOT make the sale go through when something stinks


Tommays

 

[oddjob]

Re: Scratching each others back...

The answer is:

quote:

Tom has now decided he will never send an inspection his way again.


I think Jeff made a mistake.:8)

 

[eeboater]

Re: Scratching each others back...

The WHOLE thing is unethical and leads to a BIG mess

I'm not sure that is the case here. Yes, he would want an objective view of the house - but, there is no reason he couldn't provide a quality home inspection. Tom thought he wasn't going to get the truth out of Jeff, he wouldn't have used him... and he wouldn't have sent other customers to him.

 

[LadyFish]

Re: Scratching each others back...

It was wrong for Tom to assume he would get a break on the inspection, even after all the referrals he made

Personally, I use friends because I trust them not because I think they will give me a break. The same reason stands true when I refer people to friends of mine. I tell them right up front, no break in price just an honest, fair deal by someone you can trust.

Besides its a house inspection, thats one service you don't want to go cheap on and more importantly you want someone you can trust. If Tom pays the price then he should expect a VERY thorough inspection that his friend would be sure to back up if need be.

I think its wrong to assume you will be receiving a break when you use your friends. Afterall, they are in business to make money. If you're lucky they may refer people back to you when/if the opportunity arises. To me, thats a fair enough trade.

Use them because you trust their expertise and expect nothing but a job well done in return.

 

[rottenray6402]

Re: Scratching each others back...

If there are no laws or rules in your industry to prevent discounting the inspection I think Jeff just shot himself in the foot. In the banking business, insurance, and when I was a broker there are specific limits that we have on giving or getting gifts or discounts. :'(

 

[tommays]

Re: Scratching each others back...

Haveing hired a big player in the real estate game to relocate me i have paid the price of the BS games that go on

I had a GOOD laywer and turned the tables on them in the end but it cost me massive needless grief


I can tell you that when the Agent is buddy buddy with with the bank and the supposedly independent appraiser a LOT of flakey stuff happens

The only honest person was the house inspector

And its not like they tell you there friends and there trying to make a house move in a tight market that WONT pass a proper appraisal

Tommays

 

[brine]

Re: Scratching each others back...

He hired the home inspection. He should have negotiated a buddy buddy look-see if that was all he wanted. One of the purposes of the home inspection is to have someone elses neck out there on the line. It is a legal document once completed (at least it is here). If he wanted to be thanked for all the referrals he should have asked for a good old palm greasing.

 

[SS MAYFLOAT]

Re: Scratching each others back...

If I was Tom and Jeff did the work for me, I would know that Jeffs business is what puts food on the table. I would not expect a discount, but a more scrutinized inspection of the premises. However we are all different and bad/good choices are made. I've seen 30 year old friends part because of a $5 loan.

 

[kenimpzoom]

Re: Scratching each others back...

This one can go both ways and there really isnt a wrong answer.

Tom should have the guts to tell Jeff he expected a discount due to all the referalls and tell him he will no longer get any referalls.

Ken

 

[JB]

Re: Scratching each others back...

I believe in back scratching and have indulged in it from time to time, but these things, like any other business transaction, should be agreed on beforehand.

Tom screwed up when he expected but did not ask ahead of time for a discount, so he screwed up by being upset when it did not happen.

He is being childish. Business is business.

 

[PW2]

Re: Scratching each others back...

I agree with JB on this one. If you expected a discount level, you should have negotiated it up front.

Like others, I would get very nervous over buddy buddy relationships in this business. If I am buying a property, and need an inspection, I want the inspector working for me, and not some third party. You want that, you better be prepared to pay the fee.

 

[Laddies]

Re: Scratching each others back...

Business is business and freind are freinds, when one is in business he should treat everone the same, if you start making exceptions then sooner or later you will make enemies, if everone is treated equally you should make freinds not lose them, if freindship depends on the deal it was never a freindship to begin with. People who in most case wouldn't give you the time of day are your best freind when they need something

 

[Kiwi Phil]

Re: Scratching each others back...

This reciprocal trading goes on all the time between business people.
Tom should have asked Jeff for a price beforehand, so he knew where he stood.
Jeff is a not too bright person for biting the hand that feeds him.
Good businessmen establish relationships between themselves, and never take advantage of each other, that is why they suceed.
It is the would-be's if they could-be's main reason for failing in business.......Jeff won't need to do this too often before he finds himself back working for wages.
Before we get in to any side issues, that is the way a lot of business work.
The wifes car got a new gear box in it today, for $150 less than you would pay. I could get another $230 off if I paid cash, but I want a receipt.
I purchased an item for $1,400 3 weeks back, instead of $1,750.
I have an order today from my auditor for QA, and I have told him "cost plus 12%" which is a 37.5% savings on the profit margin. he always comes to me, I always use him. He discounts his rate.
That is the way it works.
It is worth a lot of money to me, not only on what I save in pruchases, but what I gain in sales (even at the lower % margin).
Cheers
Phillip

 

[heycods]

Re: Scratching each others back...

you scratch mine I`ll scratch yours. Jeff is dead meat with Tom and would be with me to. Tom has already turned the favor it was Jeffs turn . he missed the boat.

 

[Reel Poor]

Re: Scratching each others back...

I agree with LF and JB. I'll also add that Tom is probably the person that would sue the pants off Jeff if something was wrong with the inspection, even if he had gotten a discount, it goes wit that type of mentality. :'(

I don't have a problem with back scratching, but Tom should not have EXPECTED it without saying something to Tom, even if it was when he was handed the bill. For Tom to accept the bill as it was presented and pay it, then go off on Jeff behind his back, and to others without Jeff knowing is just WRONG.

Maybe even now Jeff is wishing he had given Tom a break (although unknown to him Tom is mad), but maybe things are tight for Jeff and he really needed the job at the moment to make ends meet.

Who knows. They were both wrong in my opinion.

 

[Kenneth Brown]

Re: Scratching each others back...

I got mixed feelings with this. In my job I'm the boss right under the dept head. I am the one that makes things happen, the go-to guy. I REALLY prefer to do things the right way. That being said I have learned I can trade favors alot easier and quicker to get things done. My dept does one type of job and something breaks. I call the maintaince to come fix it. They have a window of almost immediately till it'll take a week or so to get it fixed. If I take care of their needs they pretty much take care of mine which leads me to take care of theirs ad infi..... As I said I don't like doing it but it works. Business and friends don't mix well. I sold a great kids pony to a friend. He never paid after 6 months. He kept offering me other horses in trade because he was down in the dumps and business was slow for him. I finally accepted one of his offers just so I could get paid. This almost fixed our relationship. One of the horses he swapped to me was registered AQHA. I kept waiting for the papers but he never got them to me. Turns out he still owes his uncle $135 on it so he can't get the papers till he pays it. So I figure I'll cut my loses and pay the money myself to get the papers- WRONG! The uncle sold him the horse at a discount rate so he would have some real good breeding stock. The horse was not to be sold. Now its a year later after the original sale and I still don't have my full value. I've accepted that the friendship is worth more than the little bit of money but I've learned to work cash only with him, no matter what.

 

[DTS1290]

Re: Scratching each others back...

It was never smart to offer reference from your company to his in the first place if you would receive nothing back in return. If he doesnt offer you some benefit then all he is a liability to you. Say he does a shoddy job or a customer thinks he/she got a bad deal they associate that with your company because by refering him your accepting his quality of work. Even if he does a good job it can still be a customer's perception that can cost you business. Basically both parties involved should not be expecting to get anything for free.

 

[SS MAYFLOAT]

Re: Scratching each others back...

Sometimes bad actions are blessings in disguies. Maybe Jeff will end up getting a client now who can get him more jobs. Sometimes being held down by one commitment closes the doors on other prospects.

If Tom just spent that kind of money on a piece of property and complains about a few dollars for a discount,,,,,,,,,,he just aint right.........I could understand if the discount could have saved him several hunderd or thousands of dollars, but not over the amount given above. Geeesh,,,,,,,,,what a penny pincher,,,,,,but that is the way some people are.