Realtors- You won’t read this...

54 Replies

I am considering bringing a realtor onto my team to help homeowners who want to list their property with a realtor do that. 

Realtors: If you had an investor who was consistently giving you leads and you were closing 1 per month, what do you think would be a fair way to compensate the investor?

Fee? If so, how much?

% of commission? If so, how much?

Any other way?

@Ben Gabin At least here in MA - and I think in most states - it's illegal for a licensed person to pay an unlicensed person any sort of commission, finder's fee or anything along those lines.


@Ben Gabin

NY laws doesn’t allow me to compensate non licensed individuals. However, one hand washes the other and I might drop your fee if you plan to buy a pocket listing through me. But that lead needs to be qualified and ready to buy yesterday.

I once got a $10 gift card to Hollywood Video from an agent as a thank you.  Kind of dating myself there.

If someone was feeding me deals, I'd I don't know, think outside my legal box for 2 seconds and let a $500 gift card to Home Depot fall out of my pocket or something. 

Not raising my opinion of licensees today as creative problem solvers,  guys. 

That would be a waste of time for most brokers/agents. The good ones generate their own business so they can keep it all if the principal broker. If they are at another company as associate broker/agent then there is usually a split with the brokerage.

Residential properties tend to fall under RESPA (real estate procedures and settlement act). If you want to sell leads then that is a different business entirely and you need to analyze the large companies that already do this online and their legal structures and processes they use to cover their butts.

Thank you all for responding. 

Say I were to create a company where the real estate agent and I were on the same team. He/she handled MLS deals and I handled the rest. And we created that from their deals, I got 25% of their commission.

Would that be illegal?

Originally posted by @Ben Gabin :

Thank you all for responding. 

Say I were to create a company where the real estate agent and I were on the same team. He/she handled MLS deals and I handled the rest. And we created that from their deals, I got 25% of their commission.

Would that be illegal?

Yes that too would be illegal in most states. 

 

like everyone else has stated, get your own license. If you have two brain cells to rub together it's not difficult, keeps you out of any possible legal trouble, and you can refer all you want and get a cut of the commission or list yourself. I hang my license with a brokerage where I pay $70 a month and no commission split (~$400-$500 for E&O per close), adds up to maybe $1500 a year for everything excluding E&O but that would just be deducted from profits.

@Ben Gabin

The agent would still have to have a broker who supervises them and allows agent to hang their license under their agency.

If you are an investor buying and selling houses then maybe the agent reduces his commission on your deal for the referral.

Otherwise as many pointed out you collecting a fee or check will get you into trouble with the states Dept of real estate.

Originally posted by @Jason D. :

@Ben Gabin ifni were an investor that could funnel one on market sale per month, I would get my real estate license and make the 3% commission myself.

True That. an automatic 1 deal per month is worth getting your licensre

 

Originally posted by @Lee S. :

like everyone else has stated, get your own license. If you have two brain cells to rub together it's not difficult, keeps you out of any possible legal trouble, and you can refer all you want and get a cut of the commission or list yourself. I hang my license with a brokerage where I pay $70 a month and no commission split (~$400-$500 for E&O per close), adds up to maybe $1500 a year for everything excluding E&O but that would just be deducted from profits.

we have it good on the west coast with pay to play brokers.  other parts of the country are stuck in 1970s broker splits and just don't know any better.

 

@Ben Gabin ,

I feel like having an agent on your team is an asset. I feel that sending your agent leads is one form of compensation to your team member. I wouldn’t look for a kickback.

Originally posted by @Jay Hinrichs :
Originally posted by @Lee S.:

like everyone else has stated, get your own license. If you have two brain cells to rub together it's not difficult, keeps you out of any possible legal trouble, and you can refer all you want and get a cut of the commission or list yourself. I hang my license with a brokerage where I pay $70 a month and no commission split (~$400-$500 for E&O per close), adds up to maybe $1500 a year for everything excluding E&O but that would just be deducted from profits.

we have it good on the west coast with pay to play brokers.  other parts of the country are stuck in 1970s broker splits and just don't know any better.

 

I did not know this, thanks for the info.  I looked into signing on with a traditional broker but I just couldn't justify the cost for what I do.  Would have been 4-6k a year plus commission splits.  I would do that if I had no choice but happy to have the options I do. 

 

Originally posted by @Lee S. :
Originally posted by @Jay Hinrichs:
Originally posted by @Lee S.:

like everyone else has stated, get your own license. If you have two brain cells to rub together it's not difficult, keeps you out of any possible legal trouble, and you can refer all you want and get a cut of the commission or list yourself. I hang my license with a brokerage where I pay $70 a month and no commission split (~$400-$500 for E&O per close), adds up to maybe $1500 a year for everything excluding E&O but that would just be deducted from profits.

we have it good on the west coast with pay to play brokers.  other parts of the country are stuck in 1970s broker splits and just don't know any better.

 

I did not know this, thanks for the info.  I looked into signing on with a traditional broker but I just couldn't justify the cost for what I do.  Would have been 4-6k a year plus commission splits.  I would do that if I had no choice but happy to have the options I do. 

 

My wife goes middle of the road she pays flat fee of 10k per year in January she cuts the check . no fee per deal and in some years she might do 30 transactions or more.

but she also has a transaction coordinator that gets 400.00 a file.. this is an independent agent not with the brokerage..  And many starting out in real estate that have good skills but lack the financing .. transaction coordinating is a great gig.. make money and learn from the ground up how to do transactions.. I bet my wifes coordinator makes over 100k a year working from home on her computer.. 

 

Originally posted by @Jay Hinrichs :
Originally posted by @Lee S.:
Originally posted by @Jay Hinrichs:
Originally posted by @Lee S.:

like everyone else has stated, get your own license. If you have two brain cells to rub together it's not difficult, keeps you out of any possible legal trouble, and you can refer all you want and get a cut of the commission or list yourself. I hang my license with a brokerage where I pay $70 a month and no commission split (~$400-$500 for E&O per close), adds up to maybe $1500 a year for everything excluding E&O but that would just be deducted from profits.

we have it good on the west coast with pay to play brokers.  other parts of the country are stuck in 1970s broker splits and just don't know any better.

 

I did not know this, thanks for the info.  I looked into signing on with a traditional broker but I just couldn't justify the cost for what I do.  Would have been 4-6k a year plus commission splits.  I would do that if I had no choice but happy to have the options I do. 

 

My wife goes middle of the road she pays flat fee of 10k per year no fee per deal and in some years she might do 30 transactions or more.

but she also has a transaction coordinator that gets 400.00 a file.. this is an independent agent not with the brokerage..  And many starting out in real estate that have good skills but lack the financing .. transaction coordinating is a great gig.. make money and learn from the ground up how to do transactions.. I bet my wife coordinator makes over 100k a year working from home on her computer.. 

 

that's nice. I think the main reason I don't want to do more as an agent is I hate the paperwork, not to mention the work is very similar to being an investor except you make way less money per transaction. My brokerage also offers a similar option, I think it's 2-3k with unlimited transactions and no E&O. This is excluding my board and MLS fees which I included in the $1500 above. I may switch to that in the future if it makes sense.

 

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