Morning Dave,

Wise decision. Your professionalism will reap rewards abundant!

I have had the same thing happen to me and that is exactly what I did.  I figured if I didn't sing it the buyers could walk away and I would get nothing at all.

65% of a pig is better than no pig at all.

Dave If any member of my family needed real estate services I would refer them out.  But due to the circumstances I would not ask for a fee.  Heck, I'm not sure I would even refer them.... I know my family well.  :-)

Dave- That was a good decision.  You handled that very professionally.  Hopefully you will get more business out of that.

Dave you did the right thing.  A little less commission is better than none at all. I wonder why they didn't use the brother in law.  

Dave - You handled this in a good way.  I would have done the same thing.

I would have been tempted to ask if the nice helpful brother in law was going to rebate *his* referral fee back to them..but I digress :-)

Yes, I agree with your decision, however the brother really took advatange!  35%, I have never paid.  I had a simular situation............woked with a buyer for a long time, got close to puting a offer on a home, then her brother told her if she morves to a C21 agent he gets a big referal fee.  (I am at Keller Williams).  and he would split the fee with them!  I gracefully told them this was their choice, but we have worked so long together and I was the one finding the homes, I would hate to loose their business.  However they needed to decide NOW as this was only fair to me.  It was never brought up agian and they did end up buying from me with NO referal fee.

It's happen to us all on occassion.  Just take in stride!!

We would have agreed but at the standard 25% that we offer. I would have crossed over the 35% and countersigned at 25%. But not until we called and spoke to him directly with the client. That way there could be no confusion!

I'm appauled.  It is clear to me that both the clients and their brother took advantage of you.  If the brother was involved in this and instructed them to lie about having an agent to you then I feel disciplinary action should be taken against him with the Realtor board and/or real estate commission.  This is one of the reasons why in GA we have a written EXCLUSIVE buyer agency agreement.  I would have gotten one of those signed early in the process.  It is likely that these unethical people would not sign it and I would have been able to find out about this long before I wasted my time with them.  As far as him "splitting the fee with them" that is ILLEGAL.  There are ways that he can legally rebate money to them effectively; but to say that it is giving them part of the referral fee is illegal (at least in Georgia).  Now, I probably wouldn't have been in this situation because I would have had an agreement with them early on or I would not have spent time working with them.  However, if I did not have a signed agreement and I was in your position, my reaction would honestly vary depending on the price range of the home.  If it was a very expensive home I honestly might have swallowed my pride a bit and agreed to it.  If it was in a low price range, I would feel better about confronting the brother about this, reporting him to the authorities, and putting both him and the unethical clients in their place (albeit tactfully).  By agreeing to this you are sending a message that this kind of behavior is ok and you are increasing the likelihood that they and others will do the same again.  As far as getting referrals from them - good luck.  Do you really think these people will be loyal to you instead of their brother in the future.  Now their brother has a good gig.  They will tell all of their friends to do like they did so that their brother can repeatedly make 35% for doing NOTHING.  The truth is, they chose to use you over their brother because they felt that you were more qualified and knew their area better.  You had a chance to nip it in the bud by getting a signed agreement from them before you invested time.  They likely would have signed and you would have had some protection.

Fortunately this is not a common situation that you were faced with. You treated it very professionally and we would have handled it the same way.

Patty & Scott Carroll - RE/MAX Equity Group Vancouver WA

Why didn't the brother show up with the referral agreement?  You are such a nice guy!

Hey Utah Dave- Congratulations on being the bigger person. If I were the other agent I wouldn't have had the guts to ask for a referral but obviously he's not too much in the educate my friends and relatives I'm in the business department. 

I would have tried to get the referral fee down a bit, but at the end of the day, I would have signed it as well.  Just get the deal done and gain the experience like you said. 

I would have signed it as well. Something is better than nothing.

Dave...I believe and agree with you.  You handled a bad situation in a good way, keeping your head.  I think I would have made a call to the Agent and to the Broker voicing my displeasure, But, I also know that you may be working with this clown in the future.  The Broker should definitely be advised of the way his/her agent handled the situation and the amount of the Fee!

I think it is unprofessional of the other agent considering they had nothing to do with the referral.  You did the right thing though in the best interest of the client.  In the future you might want to call the other agent and maybe negotiate closer to 25%.  I think it is fair to tell the buyers that you can't offer a referral fee to anyone that is not licensed and therefor you will need to call him.  I feel bad for your clients.  It must have been awkward for them to bring you the form.  the other agent is probably new and doesn't know the etiquette.  He might actually appreciate a call so he doesn't offend agents in the future.

That was a great response. I probably would have went off the walls giving a response to that. That's crazy! People expect us all to give away our money, they think we are filled with it. Well we got bad news for them! :) We're not :)

The same just happened to my brother and I. We did the same thing. I think you did  a great job. After all it is about the client's experience and you helped two people and I think that is great.

Been there.  Had that happen. 

Dumped them.

Dave--Kudos for taking the high road. 
question...did you share this experience with the brother/realtor's broker?  It would seem that the broker may want to know about the practices of their agents.  A broker would not want to have the reputation of having unprofessional agents.

www.FindHomesKansasCity.com

Dave - I'm with those above who gave you a thumbs up for your decision.  From this transaction many more may follow!

Dave, I look at these things individually and as a business decision. I would look at the referral percentage, property value range, approximate my time in helping the client, likelihood of future or referral business and then make a decision. Most of the time I try and look at it from an hourly rate. If I can't justify what I perceive as the hourly, then I can't take the business - my time is too valuable. Sometimes if it's close, I can chalk it up to marketing cost and do the deal.

Dave,

I agree with your decision and approach.  You will gain in the end.

Really, I see what you are saying about the laws of abundance. I think you handled it with great tact and business-like decorum. It's stories like this that truly shine a light on the Good Realtors and ... the other kind.

Dave,

I would have had to think about it.  I would have called the brother and gotten his take on the situation, to see if he even understood it.  I give and receive referrals at 25% but may have offered him 10% on this one.  I would have asked if he was going to give them the credit on the PSA for his portion.

First meeting with the buyers, I get a signed buyer agency agreement which would have solved this issue.  After it is signed, I explain to my clients that "now it's like we are married, we don't date any other realtors."  And I get their agreement.  This would forestall the question of a relative, I think.  

List and Sell (once again, I think Lenn is correct)     Gary @ RentonHomeFinder

Yes, I would do the same thing - and have, more than once.   Professionalism wins over greed in the long run every time.  I wouldn't be surprised to see you reporting a referral from this buyers or the other agent in the next year.  Go Dave!

Very good Dave. You did a nice job.

Very good Dave. You did a nice job.

While it would feel really good to receive a 35% referral fee, I think it is too high for someone to come in wanting almost at the end.  However, I must say that something is better than nothing so I would have acted in the same manner.

I would have done the same under those circumstances, especially if you already have spent time with them.  I'm sure it was a measure to keep the peace in their family, and the brother might have been upset if they had asked him to refer them to someone else (and someone they didn't even choose themselves).

You might have tried to negotiate it down a bit, or suggested that the brother provide a closing credit to them, but well...

I did the same thing before.  After my client and I set everything up for showing (she contacted me and never mentioned a relative or agent) I get the call. The agent.... a relative is in the midwest and never showed property or anything .... just was rude and said that my client was supposed to let her refer her to someone here but instead wanted the referral. Well, the transaction closed and I asked for a testimonial and haven't heard hide nor hair from client or agent relative.  I won't do this again.

I think, I would have asked for a more firm commitment for referals as I was bending over to accommodate and service them.  Knowing me I would have probably spoken to the brother prior to signing the document to justify the 35%.  

I read through a lot of the replies and am trying to contrast that to somewhat similar posts regarding the work required to help customers. In many other post agents complain bitterly about being low-balled for fees and all the work required to close a transaction.  If I read this post correct.  It is not really 31.5% that you would earn as you must split with your broker, using a 50/50 split.   Is that good or bad? Or is business so slow that any amount will work until the market turns around?

I agree with Matthew. Although I feel you were professional about it and that you will make some thing out of this, I'm tired of everybody trying to stick their hands in my pocket. I have given large gifts to my clients, loaned my commission so they can purchase a home, given cash to help with mortgages and moving expenses, now what I learned is that takers, take and take and take. Today I wouldn't do it, although in the past I would have because it's not about the money to me, but it is to them. I have let people go because when I did do such things it was because I care, I don't do it now because I've learned to care about myself. That agent should be ashamed of himself. (I know he's not, but he should be) It would have been better if he asked for only 25%, 35% is just too much to give to someone for not doing anything but collecting a check. You're a good guy.

You were in a catch 22.  You couldn't say "no", as they would have just gone to their brother and had him sell them a house.  But I am sure that saying yest to 35% sucked.

Handled with great integrity. With actions life this, our industry will soon have the favourable reputation that it deserves.

People never cease to amaze me and money is an ugly motivator for many. Congratulations for make lemonade out of lemons! I would have to agree that you made the right move!

Good job - very nice way to handle this situation!

that is a good way to handle it. not so sure i would've done that but after reading your post i think i may just consider it if i ever have this. i have actually been on the other end. my uncle wanted to see a home and made an appointment with the listing agent before he called me..the agent was livid when i called her and refused the fee....hmmm maybe she should've read your post.

I would have done the same thing under the circumstances.  However, if it happened after the home was under contract, I'm not sure if I would be willing to do this.  It's all about timing. 

Dave, With out a doubt I would have picked up the phone and called the brother before agreeing to any thing. The buyer and brother do not have the authority to get a referral agreement signed, only the Broker does. So brother would need to do some 'splainin' first. If everything went well during that conversation I MAY be willing to pay some sort of a referral.

Of course the truly professional way to have handled this would have been to follow up "No, I don't have an agent." with "Great!!! Let"s sit down and go over this buyer broker agreement so the next time someone ask you that question you can proudly say...Yes, I'm working with Utah Dave!"  

Wow.  I rally dont know what I would have done in your position.  I have not been in the industry that long (less than 2 years) and I have been lucky enough not to be in the position,Yet.  I think I would have called the other agent, at least, possibliy his broker as well.  Or I would have asked my broker to call his so that it may even carry more weight then just another agent calling.    

I probably would sign form and I love the way that you handled it saying that you were only doing this for Them.  Makes you sort of hate-well thats sort of strong, makes you think--gosh he is not only Lazy  (since he didnt even bother to call or bring by the referral sheet- which to me personally is one of the worse charcter flaws that you can have except being a lier.  I can deal with people that dont know what they are doing since you can always teach them, but Laziness goes deep! )  but he is also sort of unethical.

Good Luck!  I believe in the long run you will win and the brother will be an agent of the past........

Take Care & Have an Awesome '08!

You can do anything with your own time that you want; but if you are the Principal Broker and it was a Salesperson or Broker working under you, then I'm afraid this turns into a management issue, and you have to protect the interests of the Agent in your Office who sincerely invested his/her time with the expectation of not having the carpet pulled out from under them.  I've seen many Agencies lose good Salestaff because they did not vigorously protect their interests.  That's where a good Policy Manual comes in handy - one that is dynamically growing as new and previously unanticipated issues are encountered.

So who's Ox was being gored, your own .  .  .  . or one of your Agents ?

I'm on board with Bryant.  Clients should never have to be involved in or dealing with referrals from other agents.  Pretty unprofessional.  I'm guessing the brother sent the form along with the relatives because he didn't have the guts to call you.  I would have thanked my clients for the form and called the brother immediately.  Why were they working with you and not the brother?  Seems like there is something fishy going on here.  If you called the brothers broker right away - he would have to explain to the broker what is going on. 

Wow.  I rally dont know what I would have done in your position.  I have not been in the industry that long (less than 2 years) and I have been lucky enough not to be in the position,Yet.  I think I would have called the other agent, at least, possibliy his broker as well.  Or I would have asked my broker to call his so that it may even carry more weight then just another agent calling.    

I probably would sign form and I love the way that you handled it saying that you were only doing this for Them.  Makes you sort of hate-well thats sort of strong, makes you think--gosh he is not only Lazy  (since he didnt even bother to call or bring by the referral sheet- which to me personally is one of the worse charcter flaws that you can have except being a lier.  I can deal with people that dont know what they are doing since you can always teach them, but Laziness goes deep! )  but he is also sort of unethical.

Good Luck!  I believe in the long run you will win and the brother will be an agent of the past........

Take Care & Have an Awesome '08!

Hi Dave,

It is disgusting that they did that. You did the right thing.  Unfortunately there are too many relatives with licenses not really "Working" in Real Estate.

Good Luck

Kevin

White Plains, NY

I like your thinking Dave. You are making 65% and thats alot better than 0 %.

The payee will appreciate this gesture and you will get future referrals, thats all that matters.

Eddy

You handled it beautifully.  Well done.

I don't pay 35% to anybody unless I'm getting a pre-approved buyer on a particular property and the referring Realtor is from out of town.

You are a true professional.  We need more like you in our industry. 

Happy House Selling!

very professional. that was a good way to handle a shaky situation. 

it would have been nice to get it all, but you did the right thing.

Dealing with family doesn't always work.  Having the brother ask for 35% referral fee is incredible unless he gave every penny to them. Strange that the brother didn't find them a house and give the real estate commission as a credit...or negotiate a reduced seller agent commission so the buyers could get the house for less.  Although I'm not sure that is legal....

From all of the responses Dave, you hit a nerve.  How about this response..."I am very pleased you brought this to my attention, your honesty is appreciated.  I will always reciprocate honestly.  I'll bet you got put on the hotseat from your relation when he found you were working with us.  Here is what I will do.  Justice does not require me to pay him anything since he did nothing in this transaction.  It's sort of dishonest for me to pay him.  What I propose is to give you a 35% rebate on our fee since it was no doubt difficult for you to come to me with this request.  Now you can keep the money for yourself or give it to this other licensee.  That is your choice." 

"65% of a pig is better than no pig at all."

I love Bacon!

I did have a similar one not long ago.  I also gave the referral fee.  It was less than 35% though.

Very nicely handled.  I hope I would have handled it as well - without biting my tongue !

Glad to know you'll pay a 35% referal fee if I send any buyers or sellers your way. : )

Dear Dave,

KUDOS to your team For acting professional as you did.

As for my comment, i probably would not have taken it just for the principle of it (REALTOR 101). It is this kind of clientele that put us realtors in the dump, taking advantage of our time and talent just so they can have more. My gut feeling is that this same buyer is taking you for a ride. If he is renting in one of the houses that the agent is selling, he could have just as easily used him. The 35% referral may not even go to the other agent's pocket but rather as this buyers payment for breaching his rental agreement. If this is the case the buyer had both of you duped....If not, then this buyer is just greedy and feeding on some realtors' desperation to have something, even a little thing!!!!

Dave,

I think you did the right thing. I love creating raving fans and clients for life. It always pay off in the end

dave

I agree, you did the right thing.  I look at the situation this way, I'm not losing 35%, I just made 3000 dollars. then it doesn't look bad at all. 

Dave,

I think you handled it perfectly and with class. It's difficult to do but it's certainly happened to us before. More then likely, they did not know a referral fee could be done until their Brother told them -- which obviously would have happened from the start if their brother would have told them in the first place.

You did the right thing... it may have stung a bit.  Hopefully this guy is for real! :)

You were taken advantage of, but chances are the client would have just gone on to the next agent and done the same thing to them, until they found someone willing to go for it!

"Utah Dave"...

Well first of all...I am big on nicknames. I love it when a Member comes with a nickname.

It saves me from having to nickname them myself :)

Anyway...I love the way you handled that...Let's just call that money well spent :) 

TLW...ROAR!

This is an unfortunate situation, but it sounds like you handled it in a professional manner.  Sadly, it's this kind of story that gives all real estate professionals a bad name.

We all agree 35% is ridiculous.  I commend you on taking it like a gentleman and probably would have done the same thing. 

I do think that to hinder this type of activity, we always need to make it clear that the requested referral percentage is outside our experience (it may be a violation to indicate it is not typical or normal or customary).  If brother-in-law is gouging us, his family has a right to know.

I also think planting a seed like "He must really be planning a great house-warming gift" might make it worth the extra fee :)

Dave, You did the right thing and were very professional in the way you handled it. I would have been tempted to call the brother and let him know after the deal was done how unprofessional he was, however.  He should have never had them handle his business for him.  Good job on your end and I hope you do get some nice referrals from them in the future!

Dave, You did the right thing and were very professional in the way you handled it. I would have been tempted to call the brother and let him know after the deal was done how unprofessional he was, however.  He should have never had them handle his business for him.  Good job on your end and I hope you do get some nice referrals from them in the future!

After reading your post and the responces given, I agree with what you did but I also think 35% was way to much for them to be asking for.

That is so annoying! My first response would be to kick and scream! After calming down I would probably do it and take advantage of their referal business more than ever. I would feel like they "owed" me. I don't know, after reading that, it made my stomach hurt.

 Sounds like the brother set it up, you do all the work and he get's 35%. Bravo on your response.

Dave,

I definitely think you took the right approach.  When you put your clients before the money you will always come out on top.  Those people will bring you more business than the 10-15% extra you paid that agent.  I do however think the agent took advantage of the situation.

What what a bunch of really great comments.  Yes, In life I believe we dont get what we deserve....we get what we negotiate.  We had someone recently do this to one of my agents a few months ago and my agent didnt give them anything and they didnt get the deal.  I feel good about being professional and not getting emotional about it.  Thanks for all the comments and other great ideas.  What an awesome panel of brainstorming and thoughts!

100% of nothing is nothing. If you say no you probably lose the client.

Get a video testimonial with them saying "My own brother is an agent here... I used Utah Dave because I wanted the best."  That would make it worthwhile...

You got to do what you got to do in this market. Hard to say what any of us might do in a similar situation as each person is unique and situation different. You seems to have made lemonade out of lemons and that may be all you can hope for.

Good call, I have had the same experience, but not for 35% (ouch)  I also believe the more you give, the more you get  :)

cheers!

Dave,  You took the high road, that says much about your character.  The other agent put the client in the middle (related or not, WRONG!), that says all we need to know about his character.  

Who hasn't had something similar happen to them?  It is so frustrating.  By the huge # of responses it is clear that this practice is way too widespread.  Maybe, just maybe, instead of Realtor ads saying, "Now's a Great Time to Buy," they could pass regulations stating that all referrals must be given in advance of the first substantive meeting between the agent and customer.  Unfortunately, it probably wouldn't change things, as people like this will play games no matter what.

Finally, a question, would you have workd with this guy if his brother had referred him to you in the beginning?  I would guess the answer is yes, so you certainly did the right thing. 

Good decision, not something to get greedy over, and repeat business has lots of potential.  However, if it was a "tough" client, it would have been a good situation to part ways or push the issue.