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DON'T ASK ME FOR KICKBACKS!!!!!!!

By Shellie Alicia Carter

Real Estate Agent with REAL. | Realtyka, LLC 8900289

September 28, 2009 12:51 AM

I am so frustrated right now so I'm venting here on AR. After a couple of weeks speaking about business relationships with an area Realtor - I HAVE HIT MY LIMIT.

I am just like every other mortgage broker in the market - I NEED REFERRALS - but I am not willing to break RESPA guidelines to get them. WHY break compliance guidelines when RESPA rules will legally allow me to pay you.

If you didn't know - most Realtors do what federal guidelines describe as "the loan officer's job". The guidelines are very clear and very simple. So I told this guy that my company would let me pay him 25% of the commission. All he had to do was sign the new hire documents and agree to do his part on the deal. I said "you open the deal - I'll close the deal" and everyone would be happy.

BUT NO... that's just too simple.

So I told him that I wanted to start buying leads. 80% of my business is purchase business. I have the patience and compassion to focus on the needs of new home-buyers - my trainer said "work what comes naturally" - so buyer leads are what I buy for my business. But that also means that when I get these leads most of these people don't have a Realtor!!! Yea! now I can give a referral right? NO. He says he doesn't need leads! WHO DOESN'T NEED LEADS? I'm not talking about 50 cent leads. I'm talking about buying 20 to 40 EXCLUSIVE buyer leads every time we close a deal - that I would only refer to him but he turned me down!

Our conversation ended with him telling me how good he is - that he's been doing this five years longer than me - and while I was running my business in Chicago - that he was here in Jersey. "If you want to do business here in Jersey you better get over this goodie goodie thing" "This is what happens her"

WHAT??!!?? REALLY???

I am fuming - why did this [man?] just waste two weeks of my life - did he think that as I got to know him I would change something in my partnership program. God how hard is it - I want referrals - you give me referrals - and I will reciprocate with compliant compensation or referrals. COMPLIANT. I am so angry right now. It's time for a trip to Dunkin Donuts!!! ARGGG!!!!!!!!!!!

PS: this is not about the rejection - this is about me being clear from the beginning that I don't do kickbacks. I don't ask for them - I don't give them. The rules allow for compensation to be exchanged - so why sneak and do something the law already allows us to do. That's like a millionaire stealing shoes from Wal-Mart!

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Kathleen Cooper

Kathleen Cooper, Sposato Realty Group - Worcester, MA

Sposato Realty Group - Broker Owner

I didn't even know that mortgage brokers gave referrals or could pay a fee to a Realtor. After 5 years, I've found my first mortgage person that has actually reciprocated the all of the referrals I send out, with a referral to us of some new home buyers. Felt good to finally get and not always have to give.

Good luck!

Sincerely,

Kathleen

Sep 28, 2009 12:58 AM

Mary Strang

Viroqua, WI

I too have never know about this type of fee relationship or that it existed. I think you are taking the high road and making it clear to that party how you do business. I would bet you find out it is not the way things are done in that state. Most likely only the way that one party perceives it is done according to only his rules.

Sep 28, 2009 01:05 AM

Shellie Alicia Carter

REAL. | Realtyka, LLC - Maplewood, NJ

Thank you Kathleen - you're right - most mortgage brokers don't give referrals! This is not 100% accurate - but that's mostly because they are focusing on refinance business! Since I'm mostly purchase that means my leads often don't have a realtor. That gives me a chance to give just as much as I give.

And yes - realtors in some states are allowed to write mortgages - I'm not telling realtors to go out and become loan officers - but if you want the money you've got to do it according to the rules.

I am so glad you are in a good reciprocal relationshp. We can accomplish so much more together than we can apart.

Sep 28, 2009 01:09 AM

Teresa Cox King

RE/MAX of Orange Beach - Orange Beach, AL

Orange Beach and Gulf Shores, Alabama

I read this and then came back to see if others had comments that would help explain your situation... I had not heard about the type of referral fee you speak of either. You pay a 25% referral few to whom? (you called him "this guy") Another loan officer or a Realtor?

Sep 28, 2009 01:10 AM

Shellie Alicia Carter

REAL. | Realtyka, LLC - Maplewood, NJ

Clarification... This guy is a New Jersey licensed Realtor - and - I am NOT PAYING A REFERRAL FEE ever under any circumstances.

Realtors are allowed to be Loan Officers too. [on conventional loans] RESPA guidelines define the job description of a Loan Officer - and details the minimum requirements a Loan Officer must meet in order to earn his/or her pay. If someone wants a kick back to me I say note and teach them the rules.

I told the Realtor that I would teach him the guidelines and show him how to meet his obligations, but he doesn't "have time" to do that. So I wished him well and told him we shouldn't talk any more because it's clear we don't agree on this issue.

Sep 28, 2009 01:21 AM

Shellie Alicia Carter

REAL. | Realtyka, LLC - Maplewood, NJ

Mary - I know that the majority of NJ business professionals are doing their business. This is a problem everywhere. I just can't think of a reason why I would put my business on the line over a few dollars!

Sep 28, 2009 01:31 AM

Pat O'Reilly

RE/MAX..214-289-6176 Irving and all of Dallas Fort Worth - Irving, TX

Thanks for the post. I would always take the high road. I know times are tough but is it worth fines or losing your license??

Sep 28, 2009 01:47 AM

Carol Hanson Sheehy

Prudential Florida Realty - Naples, FL

I worked in Corporate America for years prior to switching to real estate in Florida. I have been shocked at how many times people challenge you with unethical ideas. You have to take the high road, the other roads only lead to trouble.

Sep 28, 2009 01:50 AM

Carol Hanson Sheehy

Prudential Florida Realty - Naples, FL

Sep 28, 2009 01:50 AM

Carol Hanson Sheehy

Prudential Florida Realty - Naples, FL

Sep 28, 2009 01:50 AM

Tom Boos

Sine & Monaghan Realtors, Real Living - Grosse Pointe Farms, MI

Providing the very best of service to Sellers and

I agree with you that kickbacks are a major "no-no". I would never ask a loan officer for one and I would never work with a loan officer who requested some "compensation" for his referral.

Sep 28, 2009 04:43 AM

Shellie Alicia Carter

REAL. | Realtyka, LLC - Maplewood, NJ

Pat - Carol - Tom,

Thank you very much for your comments. I'm cool calm and collected now and focused on being a productive business professional.

Sep 28, 2009 05:26 AM

William Collins

ERA Queen City Realty - Scotch Plains, NJ

Property and Asset Management

Shellie,

Thanks for the post. Most real estate agents are not clear on the guidelines governing such relationships. Then, there are those who have forgotten there oath to uphold The ethics of our association.

Oct 02, 2009 04:45 PM

Renée Donohue~Home Photography

Savvy Home Pix - Allegan, MI

Western Michigan Real Estate Photographer

I hate hate hate when lenders offer me a kickback! I tell them I just need good lending sources to get the JOB DONE!! I don't want any more money on top of my regular paycheck!

Oct 07, 2009 01:50 PM

Shellie Alicia Carter

REAL. | Realtyka, LLC - Maplewood, NJ

Thank you William and Renee.

Every good realtor that I've worked with has only wanted to know one thing... "can you close my deals". Last time I checked that was the most important thing. When we give each other business we need to trust that we're going to do everything possible to make it to the closing table. At this point I am not frustrated any more... I am giving my all to my business and doing it well.

God bless.

Oct 10, 2009 05:37 AM

Russel Ray, San Diego Business & Marketing Consultant & Photographer

Russel Ray - San Diego State University, CA

Home inspectors often get asked to pay referral fees to Realtors, but doing so is against every home inspector trade association's Code of Ethics.

I just like to refer good people, and they usually like to do the same.

Best wishes!