I recently received (as did many other agents, I'm sure) an email ‘offer' from a ‘referral agent' in California, who is billing herself as a ‘short sale expert'. She is seeking ‘fellow successful agents, brokers and colleagues' to assist as she has a ‘pre-qualified Short Sale Seller' in my area. Her ‘physical distance from your geographical area poses a challenge for me to complete this transaction successfully on my own without a local agent's contribution'.
Well, we all love referrals, don't we? I do, actually, like, often love referrals. But here's the kicker with this agent-her terms-‘50% referral split on both the sellers and buyers commission-the 50% split was affirmed by my Short Sale Specialist Team Leader/National Trainer'. Well, isn't that special? Here are my thoughts, affirmed by me:
•1) A 50% referral fee is more than salty-it's highway robbery
•2) Short sales, in most markets are three times the work for less money-and then give half of it away?
•3) Could it be her need for a local agent would be that pesky detail that she, um, doesn't have a license in my state?
•4) I don't care what her ‘Short Sale Specialist Team Leader/National Trainer' authorized; I can't imagine any broker with any sense authorizing a 50% referral fee.
She mentions her Internet marketing, including craigslist, postlets, etc, which I guess this gal, being from California, doesn't know the rest of us have figured out as well. For a long time in our industry, we have had folks who have managed to insert themselves into a transaction and collect a fee. Sometimes, these folks provide a valuable service-relocation companies come to mind. Sometimes, they just get in the way. And sometimes, like this example, they get way too greedy. Here's the math in my area: we're in the cheap seats, so to speak, and the short sale properties are selling for under $100,000. Even at $100,000, let's do the math: 5% commission assumed (at our last meeting of my State Association of REALTORS®, we had a lender who informed us that they weren't paying ‘those high commissions'), we have $5000 to play with--$2500 per side. After the 50% referral fee (on both sides!) we have $1250 per side. After any franchise fees and a broker split, we have an agent earning. . . three figures. For this munificent fee, the agent doing the hard work is to expect ‘continuous short sale expertise & support'; the agent is also to email marketing photos and MLS ‘soft copy' within '72 hours of signed referral contract; send weekly emails, and use a 3rd party mitigation company which has already been selected. Whew! So, for $500 or $600, as a self-employed agent, paying $3.50 for gas and all the other fees...you get to do all this and give Miss Sunshine State half the commission. I think you might as well sit at the closing table and ask: "Do you want fries with that?" In my humble opinion, this agent shows lots of brass-but no class.
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