Referral/Commission without a RE license in Boston, MA?

Question

Hi everyone,

I'm a pharmacist at a hospital in Boston, MA and was wondering if I could collect referral fees (?) or commission based on introducing my coworkers (doctors, pharmacists, nurse practitioners, physician assistants, etc....all high income earners) to a real estate agent or broker. If so, how do I market myself and/or initiate a contract(?) with an agent or broker? Is there a standard contract/agreement for referrals with or without a license?

If not, and I have to actually get a real estate license first, how do I find a sponsoring broker specifically interested in this arrangement?

Are there brokers in the Boston area willing to sponsor someone (an agent if necessary) just for referrals?

Is there a way to avoid paying dues, fees, etc. to basically have an inactive RE agent's license simply to refer out to another agent/broker?

Thanks in advance,

Garrett

Russell Brazil · Answer

No, that would be illegal. You would need to be licensed.

Garrett Ro · Answer

Looks like I'm following @Erik Estrada's advice and just getting licensed here in MA. @Daniel McDonald It doesn't make sense for me to have more than one right now, especially if I'd be paying fees not to use it. But  @Bruce Lynn I'll definitely try to find the right broker with the least amount of fees. And thanks for informing me about RESPA @Christopher Jason Lloyd...sounds like I'll need to know that one for the exam. Thanks for all the advice everyone!

Christopher Jason Lloyd · Answer

Yeah, you will need a license to collect a referral fee unless you wanted to sell leads for a flat rate regardless of the end result.  For example, many realtors work with lead companies that the realtor pays a flat rate per lead or a monthly subscription - There are no bonuses or referral fees for a lead that results in a successful closing.  RESPA is what governs this.

Referral fees are a "no-go" but you could possibly start up and run an advertising business to sell leads as long as payment cannot be tied back to the successful closing of a lead provided.  Check with your attorney, but these types of businesses are all over the place.

Bruce Lynn · Answer

@Garrett Ro potentially you could get your license in every state.  In a way that is what Zillow has done....then they aggregate and sell back the data/referrals to agents.   On a smaller scale if you just want to do referrals you probably want to find a brokerage that does not require MLS access and has minimal fees for you.  My office for example the referral only agents have to be licensed, they can't actively assist buyers and sellers, but must refer out 100% of the business.  That's why I say agents should never retire.  They should have a lifetime of referrals and introductions.  We just charge a minimal fee to the agent and then take our same brokerage split as any other agent would get.   Depending on how good the referral is, you could potentially get 25-50% of the commission.   Potentially if ok with your broker you might could even do buyer/investor seminars at the hospital and invite all your contacts and your "team".   You team might be an active realtor, a home inspector, a title company...you give the seminar or maybe just the MC..and introduce your contacts to your team.  You earn a fee.   Good luck.

Daniel McDonald · Answer

Ya it’s complicated if you just want to do it for the referrals. Not every brokerage will be on board with that. Plus you’ll want to find one with no fees.

in regards to the mls you’ll pay for every state. I think you should focus on narrowing the list. It won’t be worth it to pay 1000s a year for a few thousand every now and then. Need to run the numbers.

Erik Estrada · Answer

Just get your real estate license and work out an arrangement with a realtor active and full time in real estate and the sponsoring broker. There are many real estate teams set up this way.

Russell Brazil · Answer

In nearly every state your license needs to be placed with a broker within 1 year of issuance. After that youll need to take prelicensing education and exam again.

Also keep in mind, as many people working strictly referrals do not take into consideration.....you will need to disclose all the fees to the client and they will need to agree to them.

Ive sat on several cases as a member of the board where consumers filed ethics complaints because they later learned the person referring them to another agent had not disclosed they were being paid to make that referral.

Garrett Ro · Answer

@Russell Brazil Thanks for the heads up....definitely trying to do this the right way.

@Daniel McDonald Thanks for the extra information. I don't have any RE contacts and am just going off of rumors, etc. so many thanks for the offer!

If I get licensed in multiple states (contemplating moving out of MA), can I leave one license "inactive" (to only pay for MLS access once? or is it by state?) or do I only have a certain timeframe to sign on with a broker before I have to take the exam again?

I hear brokers approach agents once they pass the exam...Should I wait for the onslaught before interviewing brokers? or is there a list of all agencies/brokers in Boston I can approach in advance to get a better idea?

Many thanks for any advice as this clearly is out of my realm of expertise!

Garrett

Daniel McDonald · Answer

Hey @Garrett Ro unfortunately to collect a referral fee you’d have to be licensed. I’m an agent in the north shore and the only fees I pay for my brokerage is the mls so it’s like $700/yr. You could find a situation like that. My referral fee is 25% the commission so in Boston that’s substantial for you. Could be worth it if you feel like you know enough people looking. I’m always happy to work with you or help where I can!

Referral/Commission without a RE license in Boston, MA?

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