Referral Fees - Protocol vs Requirements

[1insider]

Originally Posted by MikeJaquish

This is so very very simple.

Don't like referral fees?
Don't pay referral fees and don't accept referral fees.

Case Closed.

Mike, I completely agree. I do think this open discussion was important because consumers may not have considered the implications of entering into a purchase or sale involving a referral. Unless one thinks that every agent in a particular market will do an equally good job for their client, excluding many of what are probably the busier, more-experienced agents from the pool of possibilities appears to not be in the client's best interest. Some may get lucky and get a good, experienced agent like you but many will wind up with less qualified representation.

[MikeJaquish]

Originally Posted by 1insider

Mike, I completely agree. I do think this open discussion was important because consumers may not have considered the implications of entering into a purchase or sale involving a referral. Unless one thinks that every agent in a particular market will do an equally good job for their client, excluding many of what are probably the busier, more-experienced agents from the pool of possibilities appears to not be in the client's best interest. Some may get lucky and get a good, experienced agent like you but many will wind up with less qualified representation.

To add another perspective into the mix....

I have to say, I would probably blindly take an agent referral from an agent I know and trust over a referral via a relocation company.
The referral nightmare stories I hear are more often regarding relo company selected agents by far.

[genire]

I saw this and read the entire thread with interest and registered on City-Data to respond, so here goes.

I am licensed and a former RE/MAX 100% Club Salesperson "inactive" while I head another business in another industry. After a few years on the sidelines, I am developing a new business plan and your posts are part of my research.

First and foremost, everything I read supports the conflict in the RE compensation model. I will be re-entering as a Salesperson working with a partner Broker who understands my philosophy OR will obtain my own brokers license and do it alone.

My model will be based on a pay per task/per hour basis and will be priced depending on whether it is of fiduciary or functionary nature. Now obviously, this goes against the tradition and there will be problems when it comes to referrals. I don't know who mentioned it, but I think it may have solved potential problems. Not only that, but they prevented me by being somewhat of a hypocrite.

I was thinking of employing the traditional 25% referral fee. I have hesitated to even us the word % because of my comp philosophy. It doesn't matter how much I spend on my website; how I get my leads; how I market etc... that is up to me. I am not your father's Oldsmobile. I don't door knock and I don't pass out fridge magnets. I also don't get in my car unless I have a retainer. Another subject, another thread.

YOU ARE EXACTLY RIGHT, whoever mentioned $300 for the referral. So when you are arguing "acting in the best interest for your client", I am not of agency, so it isn't fiduciary -- but I am acting in the best interest of my client in finding them the best MATCH of an agent: education, knowledge of neighborhood, use of technology/services et al. that will be part of what my client will expect to see (as represented in our USP on our website and other marketing) and, of course, what the client wants in regards to service and the risks they are willing to take (traditional 6% until it sells vs. hybrid ala-carte).

I have been involved with the startup of a couple of household names in online aggregators, and there is no substitute for human interaction in situations where people's financial well-being and minds are being screwed with. People also do not trust rating systems. They are smarter than that. Think Match.com meets Zillow meets your CPA meets the traditional real estate community. In no particular order, Job #1 is to not **** off the RE community. Job #2 is to be legal. Job #3 is to have a USP and Job #4 is to succeed with all the other jobs while earning an income employing realistic and practical fees.

Thank you for clarifying how the industry looks at referrals. I would be interested in comments, critiques, suggestions, and corrections.

[jayCualt]

What a sad, sick society of grifters, and entitled ignorance. Why in Sam hell would a person bring you a deal to your lap and then you would have the arrogance to demand how much to pay the person nice enough to offer!!!

All of you are pathetic coddled people who have no idea what it's like to work on commission.


7 page forum on how to be a piker. Pathetic.

Typical selfish, manipulative, money hungry losers. Only in America are financial brokers and realtors expected to work for free or extremely low percentages.
A nation of financially ignorant children who want guaranteed profits, pensions and #QEforevah.

The irony exists that in manipulation of prices ---- in your never lose quest, you all are exacerbating the problem.

Delusional about the true status of single family homes ponzi, b itching about referral fees, and demonizing wall street while planning retirement off of traders efforts. Truly pathetic.

[Dani Platinum DR]

Based on your question i'm guessing you're feeling guilty about cutting down your agent's commission based on the work he has done. You can always split the difference with him. 12.5% from the agent and 12.5% from you. It's a nice tip and says that you appreciate the work he has done for you.

Everyone's Happy. Hope this helps.