Final answer:
A real estate professional should determine if a property measurement service adheres to RMS, has Errors & Omissions insurance, possesses a strong reputation with references, and charges a fair market rate. Mechanisms such as reputation, warranties, and certifications ensure competency and quality, reducing the risk of imperfect information.
Step-by-step explanation:
When engaging a qualified person or property measurement service, it is important for a real estate professional to determine several critical factors:
- The person/service uses the Residential Measurement Standard (RMS) when measuring residential properties, ensuring the measurements are consistent with industry standards.
- The person/service has Errors & Omissions insurance coverage for their activities, which helps protect against potential legal liabilities.
- The person/service's reputation is commendable, and they are able to provide references as proof of their reliability and quality of work.
- The person/service charges a fair market price for providing their services, which aligns with the going rate for such services in the market.
To reduce the risk of imperfect information, as in cases of selling emeralds or used cars, one can utilize various mechanisms. These mechanisms include relying on the reputation, guarantees, warranties, and service contracts. Similarly, when seeking professional services, checking for relevant occupational licenses, certifications, and looking into whether the testimony of the professional aligns with the consensus of experts is crucial. These steps provide assurance of quality and competency, thereby mitigating risk and building trust. It is also beneficial to assess if there's any potential bias in the person's testimony or if there's a general consensus among experts which reaffirms the validity of the information provided.