This may have happened to you.

You have a client, buyer or seller, who signs up to do business with you. You do what they asked you to, sell their house or help them buy one, and suddenly just before the deal closes the "Relocation Fee Fairy" (RFF) taps you on the shoulder with her magic want and says: "Great job, by the way those are our clients too, we get a 35, 40, even a 50% referral fee from you for the privilege of working with ‘our clients'.

Back in the old days there really wasn't much you could do except scream, holler, or cry before you paid up because the RFF would tell you if you didn't pay, ‘your clients' would not be able to collect their relocation benefits or some other such story.

After too many visits from the RFF Realtors got together to fight back and now we have some options other than getting out our checkbooks.

First (and this one is best of all for me), some state Realtor organizations have sponsored legislation to make even asking for such after the fact referral fees illegal; my state (Tennessee) is one of them.

Since 1999 in Tennessee it is illegal for:

1. "Any person or entity to solicit or request a referral fee from a licensee without reasonable cause, defined as an actual introduction of business and either the existence of a sub-agency relationship, a contractual referral fee relationship, or a contractual cooperative brokerage relationship.
2. To threaten to reduce or withhold employee relocation benefits or take other action adverse to the interest of a client of a real estate licensee because of an agency relationship.
3. To counsel a client of a real estate licensee on how to terminate or amend an existing agency contract."

Our state association of Realtors led the charge in getting this law passed; another great example of RPAC dollars and Realtors at work.

Since losing the fight against getting this law passed in several other states (and believe me they tried ;-) ) the Employee Relocation Council (ERC) decided it was in their best interests to switch rather than continue to fight so they funded a sub-group called "The Coalition" and got together with ARELLO, (The Association of Real Estate Licensing Law Officials) to come up with a unified policy and procedures to deal with after the fact fees.

The first and best thing they did was to simply issue a policy statement that says essentially we won't try to collect any more after the fact referral fees if we don't ask up front and actually refer the clients to real estate licensees. They also asked their member clients to sign this pledge which I believe most of them did including Cendant and some of the others including the big players.

http://realtytimes.com/rtapages/20000420_erc.htm

Second they developed and implemented a mechanism for real estate licensees to file a complaint at no charge if they feel they've been unfairly visited by the Relocation Fee Fairy, here's a link to the website to make that happen (no charge to the complainant)

A third solution, even if you're contacted up front by a relocation company, is to simply negotiate their fees with them.

All things in real estate are negotiable and that includes referral fees.

I've negotiated a couple down from the 35% & 40% they asked up front to 15 & 20% before they ever gave me their transferee's name so I know it can be done.

Three solutions to make your visit from the Referral Fee Fairy a more pleasant experience.

So before getting out your checkbook do some research, you may be in a stronger position than you realize.