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Old 11-28-2007, 01:57 PM
 
218 posts, read 689,921 times
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Can anyone in real estate answer my question. We are in the process of listing our home. A friend who we know, not locally offered to call some local agencies and see about getting us an agent to represent us. We then found out that this friend might actually being now getting a cut of the comission that would be going to the listing agent (25-35%) from the sale of our home. Is this a standard practice? We just feel that the friend only did that to profit off the sale of our house, especially since we knew one of the agents that we most likley will be having list our home. Thanks for any input.
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Old 11-28-2007, 02:07 PM
 
Location: Venice,florida
23 posts, read 62,212 times
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Default Referral

Yes, this is common for a referral fee. The problem that i have is, this agent is supposed to be a friend and offered to help, but should have disclosed the fee to you. Such greed, some friend.
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Old 11-28-2007, 02:15 PM
 
42 posts, read 104,776 times
Reputation: 21
It seems like real estate agents should have a legal obligation to disclose referral fees. Real estate sales isn't a profession in the same sense as medicine, law or even securities sales but you would think that a regulatory body would require disclosure.
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Old 11-28-2007, 02:17 PM
 
5,527 posts, read 6,142,537 times
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To me it sounds that the "friend" represented them self to you as a "friend" making phone calls but to the listing agent as your "agent" requiring that they get a cut in order to get them your business. The selling agent will most likely be the one to pay them but still....that's a friend you can do without.
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Old 11-28-2007, 02:36 PM
 
Location: Durham, NC
2,461 posts, read 5,527,821 times
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Seems some real estate agents misuse the term "friend". When I moved from AZ to CO, my listing agent in AZ told me he had a "friend" in the Fort Collins area he would refer me to. I was fine with that as our agent in AZ was top notch as both a buyers agent when we moved there and as a seller's agent when we moved away. Well, I later learned from his "friend" once she was our buyer's agent in Colorado that he "knew" her through a professional network that they paid to be members of. I was very appreciative of her honesty about it. Had my agent in AZ not been so great in all other respects, I would've filed a complaint with his broker over his dishonesty.
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Old 11-28-2007, 02:38 PM
 
252 posts, read 569,044 times
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Sometimes agents refer and don't ever get a fee or ask for one. They usually get one though.
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Old 11-28-2007, 03:26 PM
 
3,155 posts, read 7,054,382 times
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Quote:
Originally Posted by sunnie741 View Post
Can anyone in real estate answer my question. We are in the process of listing our home. A friend who we know, not locally offered to call some local agencies and see about getting us an agent to represent us. We then found out that this friend might actually being now getting a cut of the comission that would be going to the listing agent (25-35%) from the sale of our home. Is this a standard practice? We just feel that the friend only did that to profit off the sale of our house, especially since we knew one of the agents that we most likley will be having list our home. Thanks for any input.
Our real estate agent in Portland referred us to an agent here in Durham that she prequalified for us. She spent time on the phone making sure the agent was seasoned and would be a good personality fit for us. BUT instead of keeping the 25% referral fee she credited that to us at closing. My agent in Portland worked that out w/ the Durham agent prior to me working w/ the Durham agent. It was a nice little chunk towards closing cost. Our Portland Agent did this because we were repeat customers and we had referred some business to her. And she is a really kind person who we do consider a friend.
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Old 11-28-2007, 03:46 PM
 
1,408 posts, read 5,529,169 times
Reputation: 605
a referral fee between licensed agents is perfectly legal and in my area (MA) is common practice. Now having said that, if it was me and my friend didn't fill me in on how my friend is going to benefit i would be upset. Not at the idea of my friend getting a portion of the commission but because my friend wasn't upfront and honest and I would say something.
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Old 11-28-2007, 05:30 PM
 
Location: Charlotte
12,647 posts, read 9,154,381 times
Reputation: 1674
Full disclosure, Full disclosure, Full disclosure.....the best rule, and here's why - would you have been hurt if the friend had told you they would be trying to find the best agent they could to represent you, and it was a normal practice among agents to pay a referral to the referring agent?
Why pay?
Because many of us are grateful for the call from the blue, regarding a client who has a relationship with a Professional and who has handed that trust to us, it's priceless, why not pay?
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Old 11-28-2007, 05:34 PM
 
Location: Bloomington IN
2,094 posts, read 2,912,611 times
Reputation: 3221
It's common practice, but as walidm said it should be disclosed. I ran into a situation this year where the seller didn't realize the "friend" would be getting a fee. She was kind of mad about it.

On the other hand this year I gave up a sizable referral fee when one of my clients moved across the country. I could have tried to convince them to use only one agent in a big area, but it really didn't work and wouldn't have been fair to them.
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