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So WHY do I owe you a referral fee?

Real Estate Agent with da Vinci Realty in Evergreen, CO

February 02, 2010 02:05 PM

I need to hear from my Activerain colleagues regarding an incident that I experienced today.

Quick background: I helped a nice couple buy a home in the Front Range community of Conifer, Colorado 4 years ago. Tragically, 1 year later, I had to offer my condolences to the husband as his wife unexpectedly died. I was excited to hear, in April 2009, from his fiance who needed my help with remodel suggestions for his Conifer home. He was such a nice guy and I was so happy he found someone new to move forward with. For the next 8 months I communicated with her about ideas and potential market values. Yesterday, I got an email from her giving me a heads up that I should be in contact with her daughter in Wisconsin regarding putting her original home on the market in Evergreen. Now that she was married and living in Conifer, she didn't need that second home.

When I called her daughter today, who was a Realtor, I was shocked by the conversation. The daughter, who has been in the business for 5 years, explained that she has helped her mom buy and sell many homes. She would want to see my market analysis, any contracts and be involved in all decisions. As inconvenient and cumbersome as that is, I was fine with it as I deal with many family members who offer their opinions. What I didn't expect was for the daughter to say in order for me to work with her mom, I had to be open to paying her a referral fee of 25%. ARE YOU KIDDING ME!

I tried to clarify and paint a picture that it may be a little inconsistent to ask for a referral fee when there wasn't a referral and to remind her that I called her per her mother's request. I told her I was in communication with her mom for several months regarding her real estate needs. That didn't make a difference. She was expecting 25% no questions asked. After spending a few hours thinking about it, I made the personal and business decision to advise my past client's new spouse that her daughter's request for a referral fee was unreasonable and not how I want to start a relationship. It was no win-win.

I need to know from you all when it became OK for a Realtor to act so selfishly that they would demand a referral fee for doing nothing other than being a family member or friend. Are Realtors that desperate for income that they would stoop that low. No wonder society looks at our profession as one click above a used car salesman. I've worked my butt off trying to dismantle that negative impression and bring a professional image to this industry. AM I OFF BASE FOR BEING SO ANNOYED???

Share your thoughts and experiences...please!

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Yolanda Hoversten

Self Employed - O'Fallon, IL

Broker - O Fallon, IL Real Estate

I think your last sentencet could have been left unsaid. The flu can kill you, whereas the 25% can't or can it? lol

Feb 03, 2010 05:28 PM

Bob Krus

Keller Williams Foothills Realty - Evergreen, CO

What About Bob? For All Your Real Estate Needs!

Chris, I'm in your area and, yes, I'm desperate enough to pay the referral fee - and maybe even pay you one too. I'll put up with the daughter's input (she may have some good ideas) and build a relationship that could bring business for years to come. Call me. Let's get that house sold!

Feb 03, 2010 06:24 PM

Bill Carroll

Corcoran Real Estate - Westhampton, NY

IN REAL ESTATE, REPRESENTATION IS EVERYTHING

The daughter is at fault in that she neglected to educate her mom on the necessity to preface any and all real estate conversations with " by the way, my daughter is a realtor and handles all my transactions". I think that would have changed the whole tone and you may have seen things differently. That said, there is no referral fee due as it stands.

Feb 03, 2010 10:51 PM

Jon Budish

Resident Realty - Fort Collins, CO

Since you were already working with the client before you knew about the daughter, I don't think you owe her a referral fee. If it wasn't her daughter, you wouldn't even consider it, right?

Feb 04, 2010 07:17 AM

Dan Cronin

Ocala, FL

Wow, great topic and even better responses!! I don't have anything different to offer to the discussion but I sure learned a ton reading it all. My initial reaction would have been the same as yours. But after reading the great comments, I tend to fall into the BB, Jason Crouch, and Satar camp. I love David Monroe's outside-the-box ideas as well. Again, thanks for the great discussion!!

Feb 05, 2010 01:48 AM

Shelly Whitworth

MorSystems.com - Carmel, CA

It seems like a lot of people are having to just let this referral thing happen, I can't believe people can bully their way into getting paid for nothing!! So so so wrong.

GIMME YOUR LUNCH MONEY!

Feb 05, 2010 05:29 AM

Barbara Todaro

RE/MAX Executive Realty - Retired - Franklin, MA

Previously Affiliated with The Todaro Team

Chris....is it justified? no....was it handled properly by any of the parties? no ...,,should you pay it? yes.....dont' fight over a few bucks....it's not worth losing a client....it's not worth the bad mouthing...it's not worth losing a listing....she's a real estate agent and the mother should have said up front, list my house and pay my daughter a referral fee...I think you should pay the money....greedy will be attached to your name.

Feb 07, 2010 08:36 AM

Chris Vinci

da Vinci Realty in Evergreen, CO - Evergreen, CO

CRS, CLHMS, CMAS 303.679.0360

Thanks for the comment Barbara. I am surprised you suggested "greedy" would be attached to my name. My decision had nothing to do with how much I was giving up for a referral. I would have certainly shared my commission for a REAL referral. The fact that this agent made such a request, authorized by her mother, after the fact, tells me both had little respect for me. Couple that with informing me she would be personally involved in all aspects of any contract or negotiation, I foresaw this relationship being tainted and painful down the line. No listing, no client is worth sacrificing my business practice or integrity. To accept this demand from this daughter/Realtor, is to encourage her unprofessional tactics. I'd rather not attach being a pushover to my name. Will my decline change the daughter's approach...doubtful, but I'm not living in her skin.

This thread has been very interesting to follow. The majority feel the agent was wrong for asking after the fact. The decisions to keep the listing or not have been fueled by mixed motivations. There certainly is no wrong or right decision. Luckily, in my situation, I had the luxury to walk away with my head held up high. I imagine this post has helped to many agents in similar situations as it seems this is a common practice when family is involved in one's real estate transaction.

Feb 08, 2010 08:18 AM

Andrew Monaghan

The Monaghan Group - Glendale, AZ

CRS, GRI, EPro Associate Broker

She has no right to the referral fee, it always amazes me the way agents try to shake us down.

Feb 08, 2010 08:33 AM

Andy Parker

Azalea Realty - Cutten, CA

I think that is just wrong. My brother in law started looking for a property in Idaho (I'm in California) and although I was disappointed that he didn't let me know, I never considered pull that b.s. That is positively lame. Maybe the daughter should fly out and do the whole transaction, that way there would be on referral fee.

Feb 11, 2010 04:52 AM

Jeanna Martinez

RE/MAX Access - Schertz, TX

I'm with Jason - sorry but imho...it's all about service and taking care of clients. (i.e. your client's new fiance) Who wouldn't look out for their child (I certainly would...with no regrets)? I would also pay the 25%, do a fantastic job and secure all future referrals from this family (25% referral to daughter included).

Sorry to be in the "unpopular" group!! :-)

Feb 11, 2010 04:33 PM

Randy Landis

Retired in Samar - Tupelo, MS

Overseas Retirement Consultant

Fortunately, Procurring Cause also extends to referrals. Do what you will. The opportunity to teach this agent a lesson exists. Do what you will.

Feb 28, 2010 04:00 AM

Fortunately, Procurring Cause also extends to referrals. Do what you will. The opportunity to teach this agent a lesson exists. I would take the high road at whatever cost. Do what you will.

Feb 28, 2010 04:01 AM

Vick The Broker Olympus Executive Realty

Olympus Executive Realty INC. - Orlando, FL

Home Of The Top Producers

Chris, I'm glad you stood up for yourself, I had this happen to me on a 450K condo purchase after spending a week with this mature couple, The son calls out of no where from Vegas and asked me for a 1% referral fee of total transaction! Unbelievable!

May 31, 2010 08:40 AM

Anonymous

Stephanie

Getting ready to put my deceased mother's house on the market. My brother who is a realtor in another state wants a referral fee. The broker that my mom requested we listed her house with stated commision would be 4 % with no referral fee, or 5 % with referral fee. My brother is very upset and said that is unethical and illegal. He can't base his referral fee on whether he pays a commission or not. He wants to speak with the realtor directly and work it out so that commission is 4% WITH referral fee. While I do not want to upset my brother I am hesitant to give him brokers name. Beside, the 4% without referral fee is better for all 7 siblings involved. - Yes, my brother will also be getting a fair share of the profit from house when it is sold.

Mar 17, 2011 06:03 AM

#206

Hi Stephanie,

Your brother is demanding exactly what has caused so much discussion in this thread. The only way he should earn a referral fee is by actually referring a Realtor he interviewed and believed will provide your family with excellent service. He should then keep in contact with the agent to make sure they are doing what they promised. He shouldn't impose his advice to the referred agent as he isn't licensed in that state. By staying in the loop with the agent he referred, he is showing an effort to help your family and is justified a portion of the listing agent's commission.

If he is just asking an agent to pay him a referral fee when he didn't initiate the relationship, I have to say that his actions are pretty dishonorable. He is forcing an agent to accept a job with a stipulation of paying a family member just because he is a Realtor. That sets a bad precedent in the relationship.

I hope you see the rationale behind my comments and confirm it by reading some of the opinions above.

Thanks for posting your situation. I wish you good luck with the sale. Sorry for your loss.

Chris

Mar 17, 2011 06:59 AM

Michele Hanigan

Keller Williams Realty Plano, Texas - Dallas, TX

Realtor - Dallas & Plano Real Estate - (214)738-5555

My knee jerk reaction is tell the daughter to take a long walk off a short pier. Then I thought about it.

Point 1.) maybe you mentioned it, but what was the value of the property you were getting to list? I could be considerably more forgiving of one's greedy demand's if the property was financially well worth my time in the long run!

Point 2.) Could this negative situation been morphed into a positive situation? ie: by working with the daughter you might stand a good chance of gaining additional trust & admiration from not only one side of the family (his), but now also the new wife's side of the family, as well as the daughter's side in a whole other state. Additionally, I now smell a potentially lucrative networking opportunity here with the Realtor daughter. She's obviously out to make money, so maybe by making her money while helping her family will always be a deep seeded positive memory for the family. Why would any of them even think of ever using another Realtor again?

And don't get me started on the potential referral's she may be able to send from other Realtors in her Wisconsin office. (Although I feel pretty certain she'd inquire about a referral fee from the referrals!)

To spare the dignity issue, which I totally get, maybe offering to meet in the middle on the commission split was an option? I'm just saying'.

So all that said, was the Realtor daughter greedy? My opinion, yes. Does she deserve it? Probably not. But 0% of 0% is still 0%.

Jul 10, 2011 08:44 AM

Hi Chris,

I am #209 with the out of state brother that felt he deserved a referral fee.

The good news is we sold the house. Sales Agreement states "Seller will give to the purchaser 10K Closing cost at time of closing" Brother insists we are due a refund because he states 900 series of numbers on Hud1 statement are not considered closing costs. (Daily Interest charges, mortgage ins premium, Prorated items, taxes etc.)

Our lawyer has told me to stop second guessing ourselves and that we did everything right.

As I am one of 7 siblings, I want to ensure them that everything was handled correctly.

Care to comment?

Sep 01, 2011 06:28 PM

#209

Inna Ivchenko

Barcode Properties - Encino, CA

Realtor® • Green • GRI • HAFA • PSC Calabasas CA

I read all comments and still don't understand, why the client did not mention that her daughter is a real estate agent and she must .....control the sale?

So, what the end of that story? Did you sell the house?

Apr 05, 2013 05:40 PM

Vicki Carroll

I'm surprised you were offended, If I read this correctly, the fiancee was asking you for your advice on the remodeling of the home you sold to her fiance and his late wife. That was the house you worked with them on.

She then decided to sell her home in Evergreen, and to give you the listing, subject to your giving her Realtor daughter a referral fee. This is a property you had not previously worked with her on. If mom wants her daughter's oversight, and daughter wants a referral, this is a listing you would not have had, and is a bonus to the property you initially sold.

Daughter may not have formally referred you, but there is a relationship between her and her mother, and daughter is an expert whom her mother trusts. Mom wants her daughter compensated for her oversight.

Mom apprarently trusts you, but would prefers the oversight. If that is what the listing comes with, take it, and be grateful for being the agent the mother chose to include. Anyone else read it this way?

Aug 15, 2013 08:44 AM

#211

So WHY do I owe you a referral fee?

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