Kathleen Daniels wrote an interesting post today titled "Simple Question: Agent Refuses to Pay a Referral Fee". Most of my business is dealing with referrals and naturally, I have been giving her post a lot of thought.
I also wondered how the question relates to the ActiveRain Community Guidelines which many of us have been reviewing for the 2016 Blog JUMPSTART Challenge - Grow Your Personal Best for YOUR Success
My personal viewpoint is that anyone who assists me should be rewarded. I have paid referral fees with no referral agreement and also for referrals three or four years after I have received them. In one case, I received a referral from an agent and the client arrived with friends who also purchased. I paid referral fees both for the client and for the purchase made by the friends.
This question can be answered in several ways. On one hand, we have the legality of the entire matter. On the other hand, we have the concept of ethics and personal responsibility. I feel that the code of ethics of the National Association of Realtors® and the ActiveRain community guidelines are guides for our ethical consideration.
I am not an attorney, so this is not meant as legal advice, but I looked at a copy of the California Association of Realtors® referral document and here is the language: "...upon recordation of deed or other evidence of transfer, it within 12 months, (or ∏__________) from the date of this agreement...".
I am afraid that most courts would agree that it is not within 12 months and no referral would be legally required. The two-year time-frame given in the example would give little protection to a referring agent.
As to the ethical consideration, I think that is much different. As members of ActiveRain and Realtors®, we generally attempt to hold ourselves to a much higher standard of responsibility to the public and to our fellow professionals.
- The ActiveRain community guidelines state "... being a part of any community requires a certain level of trust".
- "ActiveRain members must remain zealous in their quest to represent our industry in as true and professional of a light as possible, for both their fellow professionals and the consumers who access this platform".
- and, "The ActiveRain community and real estate industry as a whole will only be respected to the degree of character represented by the actions of its professionals. Do not conduct yourself in a way that disgraces your fellow members on this network".
I also believe referral agents, both the receiving agent and the referring agent, will find that their business will grow much more if they gain a reputation of going beyond the minimum required when working with referrals or any other aspect of real estate.
Another thought is the Golden Rule, "Treat others the way you would have them treat you."
It also seems to be a subjkect for the concept of karma. The Wikipedia encyclopedia makes the statement, "good intent and good deed contribute to good, and future happiness, while bad intent and bad deed contribute to bad karma and future suffering.
In summary, when dealing with referrals or anything else in real estate or in life we have choices. When we look at contracts and day-to-day situations, we must obey the law, but we do not have to follow community guidelines or code of ethics. They are different. Our choices will reflect our character and our personal sense of responsibility.
My belief is that by choosing to belong to the ActiveRain community, we are agreeing to hold ourselves to higher standards and that we should not use technicalities to avoid our responsibilities to other professionals and to the public.
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Gary Coles
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