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How can one reward referral partners?

I have recently struggled with the issue of good referrers and how to reward them. It is one thing if the referrers are real estate agents, appraisers, title companies, and other industry insiders as it is advantageous for you to perform well because they are probably resulting in the business too. But how to reward good friends that continually send you the business.

Technically if you tell them you will take them out to dinner or buy them a gift card of some sort to say thanks you are giving them a "kickback". RESPA clearing defines Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed.

That all being said how can you say thanks more so then just saying thanks to good family members, friends, and coworkers that are out there passing your name to everyone under the sun? I am looking for creative ways to do this that would be deemed legal? I know people break this rule time and time again, but I was curious if someone had figured out a good way to work around this rule.

Thank you in advance for the insight?

Posted by Todd Eastman on 06/04/2007 10:44 PM

Comments (4)

referrals, kickbacks, respa

4 Comments on How can one reward referral partners?

A great question to pose... I've been struggling with this myself. Will wait for the responses.

06/04/2007 10:48 PM

by Pasadena CA Real Estate - Irina Netchaev (Keller Williams International Realty)

Hi Todd:

I have been around and around on this one. I attended a RESPA class at our local Women's Council of Realtors and something came up that made me think..."I could do that!"

Hold tight because this isn't going to be cheap, but it's a good one!

As long as you don't send kickbacks...you can send like kind gifts to EVERYONE on your mailing list. I sent gas cards to my entire client base in Top Producer when the gas started to go up. I sent free oil change certificates to all my database. I send gifts TO EVERYONE...

Not only does it thank the ones that send referrals, it makes the ones who don't, think that they SHOULD send me some. I have noticed a definite increase since we instituted the general gifting policy and it's fair to everyone.

Good Luck:

Lania DeMers, Broker/Owner, Rocky Mountain Realty Company

06/04/2007 11:02 PM

by Lania DeMers, Broker Rocky Mountain Realty Co. (Rocky Mountain Realty Co.)

Keith,

If you don't mind, I'd like to pose a question on YOUR blog to Lania.

Is is acceptable to send something like this to let's say 20% of your client list, yet not all? My top 20% are those that continually support me in business, those are also the folks that I invited to my last client event. No gifts, cash exhanged hands, I just had an event for the holiday.

I hope you don't mind that I posed the question. Hopefully we can all learn from this.

06/04/2007 11:28 PM

by Orange Co. Real Estate~Lynda Eisenmann, Broker-Owner, CRS,CRB,GRI,SRES, Brea, CA (Preferred Home Brokers)

Personally I don't look for anything from a mortgage rep. other than good service to my clients, don't rob them blind with hidden fees and produce what you say your going to. "Gifts" to agents for business should really consist of nothing more than maybe a nice dinner out - what better way to repay them and be in our face again for more business.

With my clients as an agent, I do do special things for past clients ... not all 500+ of them but my "A" list and I believe there are no laws saying I can't. I send them pies at thanksgiving with a note... a gift card if they refer me a client and I do a photos with santa for all my past clients.

Hope some of that helps...

06/05/2007 09:15 AM

by Desiree Daniels New Jersey Real Estate (609) 448-2222 (RE/MAX Tri County)

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