I've met many real estate agents that like to refer their favorite home inspector because they know exactly what he's going to say and that he's easy to contact, his delivery on what he finds (not an alarmist), what his report will look like, what kind of customer service skills he has, how his report is delivered, what benefits he offers your client, etc.
How do you pick a home inspector?

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Tacoma Home Inspector

I don't pick, my client does. I have a list of inspectors that I give the client.
Yes, many agents will use that method. I just hope, for the benefit of the client, that those that give out choices know all of the inspectors very well and trust that they are reputable and experienced, not just three picked out of the phone book.
great question
Even though most of the agents I know give out 3 names, if they know 3, there are still a few that refer only the one that they have used for years. Right or wrong, it is a 2 way street, what goes around, etc.
I have had several Realtors tell me that they choose me and refer me "because I know that you will keep me and my Clients out of court." That's the kind of testimonial I like.
I have 3 in my list that I trust and have worked with and will give the 3 names to my customers to call.