I thougth refferal fees were illegal for Realtors ,or not ? (agents, commission)
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I was told at the real estate practice school that giving some type of comission for referrals was not legal but the I just read about paying people for that .can someone please help me understand how that works ! Thanks guys !
I think you are confusing paying a referral fee to another real estate agent versus paying a referral fee to a non-licensed person. If "A-1 real estate agent" in another state referred a buyer to me I can pay that fee as this person is licensed. If "B-former client" referred a buyer to me, I cannot pay B as B is not licensed.
In many states (such as in Michigan) it is illegal to pay a referral fee to an unlicensed person. In some states (apparently in California) it is legal to do so under certain circumstances. If the person receiving the commission is licensed, that's another matter.
Referral fees to unlicensed agents is illegal. Referral fees to licensed agents is legal. RESPA covers kickbacks/unearned and or disproportionate marketing fees paid in exchange for business between lenders/agents/attorneys/etc.
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