Agent Referrals Agreement

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Agent Referrals Agreement

Dennis Kelly
Rental Property Investor · Long Beach, NY · Member since 2014 · 36 posts · 7 votes

Does anyone have a process they follow in regards to referring listings to agents? Not so much Property Management but leads for Wholesaling and Flipping. I’ve been getting leads that are in good shape and more geared towards end users that I want to refer to agents.

What’s a reasonable % or fee you would ask from their commission split? And what would be the best way to be paid out since kick backs are technically illegal?

I was thinking handing them the lead and if they close it then they'll send me a % of their commission split after the sale for “marketing efforts”. Do you think an actual contract needs to be put in place when handing them the deal or trust your relationship with the Realtor?

Let me know what you think or practice.

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Payton HaightBusiness Member
Real Estate Agent · Columbus, OH · Member since 2021 · 124 posts · 86 votes
1y

Hey Dennis, Where are you finding deals? In NY only or out of state as well? If you are getting enough leads, the 'easiest' option may be to get your real estate license. Not sure NY (or other states you may be working in), but in Ohio brokers/Realtors cannot pay a commission to unlicensed individuals. Perhaps someone else has a legal way of setting this up so you can be compensated for providing good leads.

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  • Payton HaightBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2021 · 124 posts · 86 votes
    1y

    Hey Dennis, Where are you finding deals? In NY only or out of state as well? If you are getting enough leads, the 'easiest' option may be to get your real estate license. Not sure NY (or other states you may be working in), but in Ohio brokers/Realtors cannot pay a commission to unlicensed individuals. Perhaps someone else has a legal way of setting this up so you can be compensated for providing good leads.

    [email protected]380-324-0445
    4Reply
    • Dennis Kelly
      OP
      Rental Property Investor · Long Beach, NY · Member since 2014 · 36 posts · 7 votes
      1y
      Quote from @Payton Haight:

      Hey Dennis, Where are you finding deals? In NY only or out of state as well? If you are getting enough leads, the 'easiest' option may be to get your real estate license. Not sure NY (or other states you may be working in), but in Ohio brokers/Realtors cannot pay a commission to unlicensed individuals. Perhaps someone else has a legal way of setting this up so you can be compensated for providing good leads.

      Only in NY, seems the easiest way is to utilize my license and collect referral fees that way.
      3Reply
  • Marian Huish
    Real Estate Broker · DC MD, VA & NV · Member since 2014 · 512 posts · 292 votes
    1y

    Peyton is correct @Dennis Kelly-  if you want to receive a share of commissions, you need to get licensed as a Realtor-  all commissions, even for referrals, need to go through your Broker.

    3Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    It might make more sense to just get your real estate license and list them yourself. 

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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    1y
    Quote from @Dennis Kelly:

    Does anyone have a process they follow in regards to referring listings to agents? Not so much Property Management but leads for Wholesaling and Flipping. I’ve been getting leads that are in good shape and more geared towards end users that I want to refer to agents.

    What’s a reasonable % or fee you would ask from their commission split? And what would be the best way to be paid out since kick backs are technically illegal?

    I was thinking handing them the lead and if they close it then they'll send me a % of their commission split after the sale for “marketing efforts”. Do you think an actual contract needs to be put in place when handing them the deal or trust your relationship with the Realtor?

    Let me know what you think or practice.


    You must obtain your license. Currently, practicing real estate sales without one is illegal. There are referral companies that focus entirely on directing leads to real estate agents. While you might manage to operate without a license for some time, if someone reports you, you risk being sued or fined.

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  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    1y

    If you don't want to get your license you can set it up as a marketing company and provide leads at an "x" cost per lead. The best way for you as others noted is being licensed. You can scale and be a able to provide multiple services to sellers. 

    2Reply
    • Dennis Kelly
      OP
      Rental Property Investor · Long Beach, NY · Member since 2014 · 36 posts · 7 votes
      1y
      Quote from @Caleb Brown:

      If you don't want to get your license you can set it up as a marketing company and provide leads at an "x" cost per lead. The best way for you as others noted is being licensed. You can scale and be a able to provide multiple services to sellers. 


       thanks for this info!

      1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    1y

    It's illegal in every state Im aware of for a licensed agent to pay a referral fee to an unlicensed individual.

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