I think we can all agree that we love referral business. After all when someone refers someone to you it feels like a pat on the back saying you've done such a good job. When a referral comes from out of town it's even better because you have to figure that you're reputation is now expanding to areas further than your own city. Having mentioned these two examples of referrals I think we can also agree that none of us would have a problem extending and paying a referral fee. After all we didn't have to generate that lead.
But what if a buyer wanted a referral fee for using you as their agent? So here's the situation that I'm curious to get some thoughts from all of you here on AR. In a recent transaction we represented a couple on the selling side of the transaction in which the wife has her license. Her full time job is as a civilian defense contractor but she does have her license hung with a small brokerage of about 3 people. As we started to discuss putting an offer that they liked the issue of a referral fee came up because the wife is licensed.
My feeling is that in order to receive a referral fee you should make a referral not just enter a transaction and receive one just because you're licensed. Better yet if you want an even bigger referral fee, why not do your own transaction and keep all of the commission? I thought of this and only one thing came to mind. The wife had little to no experience and wasn't comfortable doing the transaction herself but felt entitled to get payed for doing absolutely nothing.
I don't agree with this line of thought and I was wondering what everyone else would have done. Should someone who is licensed automatically get a referral fee if they buy or sell a home? Issues like these are sure to come up more and more as former agents cut down to part-time or get out of the business all together. I can't wait to see some of your comments on this post.
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