Thursday, January 22, 2009
Referral Fees and Foreclosures
Dear Sue,
My cousin, whom I have always liked, recently got into real estate. I think that he is a really good guy so I felt comfortable referring my good friend from work. My friend bought a house through him and raved about him.
Since that escrow worked out so well, I thought about referring other people I knew. Since this was going to take up some of my time, I asked my cousin if he could give me referral fees for sending him clients. It seemed like it would be a win-win for both of us.
He told me that it was illegal. I have never heard of such a thing. Is he just being stingy or is this true?
Skeptical Sally
Dear Sally,
Are you a licensed broker? Are you a licensed real estate agent that has your license with a licensed broker? Were you the buyer or seller in the transaction?
If the answer is yes to anyone of the above, you may receive a referral fee, otherwise your cousin is correct. It is illegal.
A real estate agent is prohibited by law to pay a non-licensed person a referral fee unless that person is a principal in the real estate transaction.
The law further states that a real estate licensee cannot pay a referral fee directly to another real estate agent because commissions must be paid through real estate brokers.
Regarding the referral fee, your cousin’s hands are tied. Why not refer to him simply because he provides good service?
Dear Sue,
I never thought that I would be one of those losing their home. I feel like such a loser!
I lost my job last year and have been using up my savings to make my house payments and pay my bills.
It looks like I made a big mistake trying to hang on to my home while its value was declining. When I asked my real estate agent what she thought my home was worth, I discovered that I no longer have any equity.
Foreclosure is looming. I have heard about all kinds of new foreclosure laws but I need to know where to go for the facts.
Please advise!
Destitute Debbie
Dear Debbie,
The current housing crisis is affecting almost everyone! Many hard working, highly principled and well- intentioned individuals are suffering. Try not to define yourself by these hard economic times.
The best thing that you can do is arm yourself with knowledge and seek the advice of a trusted attorney.
The foreclosure laws were modified in September of 2008. California has implemented special timelines for loans originated between 2003 and 2007. For specific information and how these new laws pertain to you, I again recommend that you consult your attorney. It is a matter of good Home $$’s and Sense.
My cousin, whom I have always liked, recently got into real estate. I think that he is a really good guy so I felt comfortable referring my good friend from work. My friend bought a house through him and raved about him.
Since that escrow worked out so well, I thought about referring other people I knew. Since this was going to take up some of my time, I asked my cousin if he could give me referral fees for sending him clients. It seemed like it would be a win-win for both of us.
He told me that it was illegal. I have never heard of such a thing. Is he just being stingy or is this true?
Skeptical Sally
Dear Sally,
Are you a licensed broker? Are you a licensed real estate agent that has your license with a licensed broker? Were you the buyer or seller in the transaction?
If the answer is yes to anyone of the above, you may receive a referral fee, otherwise your cousin is correct. It is illegal.
A real estate agent is prohibited by law to pay a non-licensed person a referral fee unless that person is a principal in the real estate transaction.
The law further states that a real estate licensee cannot pay a referral fee directly to another real estate agent because commissions must be paid through real estate brokers.
Regarding the referral fee, your cousin’s hands are tied. Why not refer to him simply because he provides good service?
Dear Sue,
I never thought that I would be one of those losing their home. I feel like such a loser!
I lost my job last year and have been using up my savings to make my house payments and pay my bills.
It looks like I made a big mistake trying to hang on to my home while its value was declining. When I asked my real estate agent what she thought my home was worth, I discovered that I no longer have any equity.
Foreclosure is looming. I have heard about all kinds of new foreclosure laws but I need to know where to go for the facts.
Please advise!
Destitute Debbie
Dear Debbie,
The current housing crisis is affecting almost everyone! Many hard working, highly principled and well- intentioned individuals are suffering. Try not to define yourself by these hard economic times.
The best thing that you can do is arm yourself with knowledge and seek the advice of a trusted attorney.
The foreclosure laws were modified in September of 2008. California has implemented special timelines for loans originated between 2003 and 2007. For specific information and how these new laws pertain to you, I again recommend that you consult your attorney. It is a matter of good Home $$’s and Sense.
# posted by Sue Thompson @ 12:25 PM 
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