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Old 04-23-2009, 06:55 PM
 
Location: Mountain Ranch, CA & El Pescadero, BCS MX.
6,900 posts, read 17,519,332 times
Reputation: 6230

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Situation; Client comes into our office looking for property, my agent shows them several properties throughout the day and when they part, the "client" hands my agent her business card showing her as a real estate agent for a company two counties over. Surprise! (She's a part time agent and her daughter works full time for the same company)

Client acknowledges that she wouldn't have been able to find the property on her own and that my agent has done a "great job" in finding her a property. Client talks to me about the property and again says "I couldn't have done it without you guys", then asks about getting a referral fee. I told her that I didn't think she had earned one and that if she had wanted one, she should have made that request up front and in a timely manner.

Client then proceeds to have an offer accepted on the property through our company. She again asks for a referral fee of 25%. I call her broker to get his take on the situation and have had no response for 3 days. I do get a call from her daughter who tells me I don't have to talk to the broker as "we do it all the time agent to agent" (In CA fees are paid broker to broker and not salesperson to salesperson)

I have no problem paying referral fees in general, but I think our client missed the opportunity to have her day in the sun. I might pay her $500 as a token ($9750 gross commission to the office, my agent gets half) referral fee, but I'm really not too happy about the whole matter and my agent is REALLY not happy about having to give up anything.

Comments please?
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Old 04-23-2009, 07:25 PM
 
Location: Barrington
37,001 posts, read 28,116,031 times
Reputation: 12545
I know several agents who have referred themselves, as clients, to agents, when looking for a home, in other states. It's done upfront and in writing. It always struck me as cheesy and showed a lack of professional courtesy.

If your agent's client had been upfront about her status and referral, your agent would have had the opportunity to accept it on those terms, or not.

Assuming your agent did not sign-off on a referral agreement , there is no obligation to pay a referral fee.

Given you don't know what was communicated between your and and the client agent, the $500 token is reasonable. I suspect you have not heard the end of this one.
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Old 04-23-2009, 09:51 PM
 
Location: Fayetteville, NC
1,490 posts, read 4,761,973 times
Reputation: 1585
We were buying a home out of our MLS area and paid referral fee to a local agent to show us the property a few times because the listing agent was problematic. We did all the paperwork ourselves. We were up front and did not try to be "Secret Agents"
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Old 04-23-2009, 10:39 PM
 
Location: Columbia, SC
8,339 posts, read 16,364,707 times
Reputation: 5490
1- You should have no obligation to pay it because of the way she handled it.
2- It should be done broker to broker and I'd guess the agent just wants to take the whole thing for herself based on their comments to you.
3-I'd call the broker anyway and check it out. I wouldn't offer it up front prior to speaking to the broker but I think you're token $500 is the best idea because you make a small concession w/o paying a 25% referral fee because she was quite underhanded and not upfront about it.
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Old 04-24-2009, 06:44 AM
 
Location: Cary, NC
28,452 posts, read 50,618,817 times
Reputation: 26619
Your $500 is generous, IMO.
Tell her for $2500 in Ben Franklins you will teach her how to properly work referrals.
Offer to turn her into the commission. That will get a response from her PT broker.

(MikeJ is still bruised and cranky from a few recent amateur referrals. One was a total cold call where the referring agent didn't actually know the prospect but initially requested 30%.)
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Old 04-24-2009, 07:40 AM
 
Location: Raleigh, NC
998 posts, read 4,734,287 times
Reputation: 628
I hate those situations. Unfortunately they do happen. It reminds me of an instance of a buyer seeing my listing and saying they didn't have an agent. Then after he wanted to make an offer - an agent appears. What to do? If you don't provide a referral fee, you just make the situation into a very awkward and stifling process with hard feelings. It's sad they didn't have the courtesy of providing this information up front - I suspect being part time and probably the agent doesn't do very many sales have something to do with it (although not an excuse). I think what you are offering is satisfactory and I would explain your reasoning to agent just as you said. Best of luck.
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Old 04-24-2009, 07:47 AM
 
Location: Cary, NC
28,452 posts, read 50,618,817 times
Reputation: 26619
Quote:
Originally Posted by MikeJaquish View Post
Your $500 is generous, IMO.
Tell her for $2500 in Ben Franklins you will teach her how to properly work referrals.
Offer to turn her into the commission. That will get a response from her PT broker.

(MikeJ is still bruised and cranky from a few recent amateur referrals. One was a total cold call where the referring agent didn't actually know the prospect but initially requested 30%.)
Quote:
Originally Posted by Janecj View Post
I hate those situations. Unfortunately they do happen. It reminds me of an instance of a buyer seeing my listing and saying they didn't have an agent. Then after he wanted to make an offer - an agent appears. What to do? If you don't provide a referral fee, you just make the situation into a very awkward and stifling process with hard feelings. It's sad they didn't have the courtesy of providing this information up front - I suspect being part time and probably the agent doesn't do very many sales have something to do with it (although not an excuse). I think what you are offering is satisfactory and I would explain your reasoning to agent just as you said. Best of luck.
Well said, and a better answer than mine...
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Old 04-24-2009, 10:26 AM
 
Location: Just south of Denver since 1989
10,420 posts, read 27,114,325 times
Reputation: 6501
I had one buyer that I showed houses to a few summers ago under a buyer agency agreement and then at the closing table wanted half of my commission because he was now licensed!

I had to take a walk around the building to cool off/calm down. I returned to the table, watched the buyer finish signing docs, congratulated him on his purchase, gave him a $200 gift card to Lowe's (as planned) got my check and walked out.

I never heard from him again. He did not renew his license after the first year. I am guessing he thought that buy spending $1000 on prelicense school, $85 on the test & $100 on the application fee - he would be ahead by getting half of my fee.

I almost did not give him the gift card.
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Old 04-24-2009, 06:22 PM
 
982 posts, read 724,308 times
Reputation: 249
Quote:
Originally Posted by DMenscha View Post
Situation; Client comes into our office looking for property, my agent shows them several properties throughout the day and when they part, the "client" hands my agent her business card showing her as a real estate agent for a company two counties over. Surprise! (She's a part time agent and her daughter works full time for the same company)

Client acknowledges that she wouldn't have been able to find the property on her own and that my agent has done a "great job" in finding her a property. Client talks to me about the property and again says "I couldn't have done it without you guys", then asks about getting a referral fee. I told her that I didn't think she had earned one and that if she had wanted one, she should have made that request up front and in a timely manner.

Client then proceeds to have an offer accepted on the property through our company. She again asks for a referral fee of 25%. I call her broker to get his take on the situation and have had no response for 3 days. I do get a call from her daughter who tells me I don't have to talk to the broker as "we do it all the time agent to agent" (In CA fees are paid broker to broker and not salesperson to salesperson)

I have no problem paying referral fees in general, but I think our client missed the opportunity to have her day in the sun. I might pay her $500 as a token ($9750 gross commission to the office, my agent gets half) referral fee, but I'm really not too happy about the whole matter and my agent is REALLY not happy about having to give up anything.

Comments please?
At the end of the day, she gave the agent her card. Before the offer. So at that time the agent had the oppty to NOT write the offer, no? She asked about the referral fee BEFORE the offer, no?

I see nothing wrong with her asking for a referral fee.

At the most, your agent spent a day driving her around. She's an educated buyer and a professional in the business. This HAD to have made your job easier. That alone should earn her some kind of fee.

I just don't think she did anything wrong. I think she was pretty up front, in that she handed you the card the first day and asked for the referral fee.
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Old 04-24-2009, 06:36 PM
 
Location: Just south of Denver since 1989
10,420 posts, read 27,114,325 times
Reputation: 6501
A referral should have be stated in the first sentence of the contact.

"Hi this is Sue from Main Street Realty, i have a buyer coming to your area that I would like a referral for - "
"Great I am willing to pay 24%."
"Ok that's fine. I will send you a form to sign and then I will give you the buyers contact info...."

That way the showing licensee has a chance to say no, or too much, prior to doing any of the work.

This is extortion. You have done the work - now pay me or I'll find someone else.
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