Real Estate Fee

Choose your own local Broker to list directly with. Your relative getting a referral fee for sending your name and number to a Broker that they really have no personal knowledge of is not a good way to select a Broker to properly serve you and most that pay referral fees, do so because they cannot get enough business based on their own referral business. A referral fee is nothing but a “kick back”.

resident2

in About Brooklyn 10 years and 3 months ago

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mag | 10 years and 3 months ago

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Brownstoners, I already know the answer to my question…but would like to hear your opinion. We will be selling my mother’s (recently deceased) home. A relative popped up from Florida who suggested if he “refers” the listing to a NY broker, he would be able to collect a real estate fee. He is trying to tell me this is done “all the time.” Has any one every heard of this? I am afraid it’s the same old story, when there is money, people come out of the woodwork…

daveinbedstuy | 10 years and 3 months ago

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Most likely some no-name broker not affiliated with a good agency. And no, it is not done “all the time.”

mysteriousbrunette | 10 years and 3 months ago

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it sounds like a finders fee. you can collect up to 3 per cent without being licensed. lawyers have the authority to collect fees for real estate without a brokers license.

williamsburgguys | 10 years and 3 months ago

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I am a former Realtor (several years ago) out of state, and it was pretty common but was always worked out ahead of time and in writing. If I refer X to you, and X buys, you owe me this fee. Otherwise I’m not referring him to you and will search for someone else to send him to who will. It’s VERY common among in-company firms such as a Coldwell Banker broker in Georgia referring someone to a Coldwell Banker broker in NY. Sometimes the receiving end won’t agree, so you simply look for someone else who will and you will eventually find someone. But it’s not a given and if not in writing would be impossible to enforce since someone out of state isn’t a part of the same system. Usually Realtor boards are local or sometimes state based and some firms do not even belong to the national Board of Realtors.

rh | 10 years and 3 months ago

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Yes, this is a referral fee. I assume the relative is a licensed agent. Not sure how it would benefit you though, unless he’s trying to save you that percentage.

housepoor | 10 years and 3 months ago

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When I spoke to a broker about selling my deceased step-father’s condo on Florida, the first thing out of her mouth was “I can pay you a referral fee”. I wasn’t the executor so I don’t know if the executor (my brother, who is a lawyer and can act as a real estate agent) took the fee or not. I thought it was a pretty sleazy practice and was to the detriment of the other beneficiaries of the estate. One way or another, it will cost you (the seller) money. If the broker was negotiable on their fee, they won’t be if they have to pay your relative a cut. If the buyer is brought in by another agency, the fee split ends up being 3 ways and the incentive for the brokers actually doing the work goes down.

dorkofwindsor | 10 years and 3 months ago

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yeah, referral fees in general are not uncommon. Real estate, M&A, private equity, international arms and drug dealers, you name it. However in the case where there is an estate involved, one person is clearly benefiting above other heirs since the estate ultimately pays the fee. So, “it is what it is”. A conundrum as old as time. You could justify it to yourself as ‘the broker is giving up part of their fee to you in order to lock in their commission’ (there is a point), but you could also envision that from the brokers point of view – ‘i would be willing to cut my fee but instead i’ll just give the cut to you and you’ll stick it to the estate by getting more than your fair share’. When it comes to family relations, personally the litmus test (for me) would be if every person with an interest in the estate knew all the details about my arrangement, and would they be okay with it or would they think I am screwing them or being selfish? That matters to me, but clearly there are plenty who could care less.

mag | 10 years and 3 months ago

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Thank you for the replies. I am staying clear of this “fee”, it feels weird and I don’t appreciate being put in a situation like this with a relative. Feels sleazy.