Realtors- You won’t read this...

Specialist · Hendersonville, NC · Member since 2018 · 159 posts · 23 votes

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?

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Jason D.

Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes

@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.

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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
7y
@Account Closed 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.
8 Reply
John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
7y
In Florida it is illegal to pay a non-licensee a fee or Commission
0 Reply
Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
7y
@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.
0 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
7y
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.
6 Reply
Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
7y
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.
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Jason D.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@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.
10 Reply
Tony Gunter
Investor · Canton, GA · Member since 2014 · 727 posts · 500 votes
7y
@Ben Gabin
Jason has the right idea. Get your license and take full advantage of the situation. It’s not like obtaining your license is difficult.
1 Reply
Account Closed
OP
Specialist · Hendersonville, NC · Member since 2018 · 159 posts · 23 votes
7y
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?
0 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
@Ben Gabin why not just get licensed?
0 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y
Originally posted by @Account Closed:
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.

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Bob Okenwa
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
7y
@Account Closed
As others have stated, it's simpler to just get your license. It takes a few days/weeks to get through the course and once you pass a few tests, you can take care of the deals on your own.
0 Reply
Bob Okenwa
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
7y
@Account Closed

As others have stated, it's simpler to just get your license. It takes a few days/weeks to get through the course and once you pass a few tests, you can take care of the deals on your own.
0 Reply
Tim Johnson
Lender · Grand Rapids, MI · Member since 2018 · 703 posts · 446 votes
7y
@Account Closed
Any form of monies is against the law if your unlicensed.
As a lender I can't even pay referral fees, we can do co marketing with brokers and thats about it.
You legally cant give out anything of value.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
illegal.. you can own the real estate company though and hire a broker .. that's what I would do.
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1 Reply
Lee S.
Northern, CA · Member since 2014 · 674 posts · 444 votes
7y
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.
0 Reply
Account Closed
OP
Specialist · Hendersonville, NC · Member since 2018 · 159 posts · 23 votes
7y
Got it.
0 Reply
Luciano A.
Developer · Houston TX · Member since 2018 · 423 posts · 400 votes
7y
@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.
0 Reply
Account Closed
OP
Specialist · Hendersonville, NC · Member since 2018 · 159 posts · 23 votes
7y
Got it. What about becoming a referral agent?
0 Reply
Tim Davids
Real Estate Broker · NW Indiana · Member since 2014 · 99 posts · 30 votes
7y
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

1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
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.

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Barry Pekin
Specialist · Purcellville, VA · Member since 2015 · 1k+ posts · 841 votes
7y
@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.
1 Reply
Lee S.
Northern, CA · Member since 2014 · 674 posts · 444 votes
7y
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.

0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
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..

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3 Reply
Lee S.
Northern, CA · Member since 2014 · 674 posts · 444 votes
7y
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.

0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Lee S.:
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.

that's why Lori has the transaction coordinator she writes the contracts the coordinator makes sure every thing is signed and all disclosures are done and that all dates are adhered to etc etc.. then if she is in the field or whatever she can contact the coordinator day or night and send docs where they need to be sent.. help with scheduling etc.. its a great service for top producing agents that's for sure.. so I guess end of the day she might pay 20 to 25k a year .. but this still represents less than 10% of her income.. so anyone who has a six figure business like she does and only has 10% fixed costs.. that's not bad.. And the other thing for her is being in it for a few decades she spend ZERO on marketing its all referral .. you work very hard in the beginning then with the computer these days you keep touching your clients and if you do a decent job they are going to refer business to you.. So its all organic .. its pretty cool really.. whereas those in the wholesaling game are constantly spending money to create income.. it never stops. your only as good as your marketing campaign and your ability to close.

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