Can someone help me understand commission and HUD settlement (fee, contract, approved)
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I've never seen a referral itemized on a HUD-1 and I've seen hundreds of HUDs.
And I've also seen hundreds of HUDS so it could be market/state specific. My brokers never cut the referral check, the title company ALWAYS does. When I receive referral fees from other parts of the country, it's about 50/50 as to whether it comes from the broker or the title company. You can't say it's NEVER on the HUD.
.......and at the end of that meeting, the local agent tells us that she has faxed over to our family member the referal contract........
The only reason she told you about it was too see your reaction and to give you a heads up that your family member had extorted (as 1insider so aptly put it) her for part of her wages.
Otherwise in a genuine referral situation, the agent may have said something complimentary regarding the referring agent, nothing more.
Yes referrals in real estate between licensed agents are legal, common, and usually beneficial when it is a true before contact is made referral, not an extortion.
Anyone who would stoop so low as to even think about doing that, was not going to credit it back to you.
Quote:
Originally Posted by 1insider
To my cynical mind, it's more probable that your relative had no intention of giving you the money and she unfairly extorted the referral from your agent.
Perhaps. But none of us online cynics can say for sure because we don't know the person involved, nor could we read her mind if we did. But I suppose it's more fun to try to foment discord.
As for the plight of "hard-working agents", I think they can fend for themselves when it comes to referral fees. It's a business decision whether referral fees are paid or not.
regarding your question 'would it have been disclosed'
There would have been no disclosure (other than the heads-up you got), unless it would have shown on the HUD-1 closing statement.
If it was on the HUD, it is possible the person from the title or attorney's office that would go over the HUD with you would mention it as a payment to ABC Realty, but that could sail over your head as to what that was or who it was really going to.
If on a HUD, it is sometimes a line item all its own; however sometimes there is only a breakdown descriptive (on the left side) of the line item which is for the full Listing Side commission amount.
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Last edited by gv28; 08-26-2014 at 04:55 PM..
Reason: I’m not going to give up my cynicism until someone pries it from my cold dead heart :)
And I've also seen hundreds of HUDS so it could be market/state specific. My brokers never cut the referral check, the title company ALWAYS does. When I receive referral fees from other parts of the country, it's about 50/50 as to whether it comes from the broker or the title company. You can't say it's NEVER on the HUD.
I didn't say it's NEVER on the HUD. I said I've never SEEN it on the HUD because I have never seen it. I'm in Florida for what it's worth. Referral fees are predatory, ALWAYS. If an agent cares about their client, they'll not chisel out a piece for themselves unless they contribute to the process. That doesn't include a handoff and a disappearance.
At this step in the process it would be very presumptuous of you to mistrust your family member,Bc so much more needed to take place or happen in the financing process for any of those arrangements to even fall through the cracks; Not to mention,not everything on a purchase contract is always acceptable or approved to satisfy a condition to close or fund a loan for a buyer, so no worries, there are no quick ninjas maneuvers any family member can do to squeeze a quick buck.lol! Most lenders wouldn't approve a referral fee to a non licensed person anyways. It's against most laws in most states, but not all types of transactions.
No matter who it comes from
Folks it's illegal! Bird dogs fees,spiffs cmon why would you think that Bc the title company gave it to you, then it's legal?!?!!!what a dumbass! Commissions are how money legally paid in any R.E.S.P.A. Regulated transaction(real estate settlement procedures act) do some research fool
Around here, referral fees to other agents are common, but they don't usually show up on the HUD. The logic is that the listing agent and the selling agent are receiving the funds as agreed upon by the seller (who is usually the one paying the commission to the listing agent, who in turn shares it with the buying agent.) What those agents choose to do with their earnings is up to them.
I don't blame you, I would have a REAL problem with a family member intruding in the middle of one of my financial transactions uninvited. If you had already listed with the agent, then your agent should have told the family member to go pound sand -- it's not a referral at that point, it's more of a shake-down. If you hadn't listed with the agent, then I can only imagine the pressure brought to bear by the relative: "Hey, give me a referral fee and I won't recommend my friend from college instead of you." I will assume that the family member meant well and did not intend to profit at your expense -- but I'm with you, it would still leave me a little wary.
The commission disbursement to the listing agent and the buyers agent would have been disclosed. But the referral fee is typically paid through the brokerage, and I do not think it would show up on the HUD
That's how we do it here too. Referral fees generally get paid from the brokerage directly.
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