A realtor keeps contacting me with potential tenants, what is the proper/legal way to turn them down if I don't want to give referral fee? Thanks!
What I have done is simply say "I am more than happy to show the property to your client, however I want you to understand up front I am marketing this property myself, have received a high degree of interest doing so, and don't pay realtors any type of referral fee". If they're working in the best interest of their client, they'll still show it to them IMO. If not, plenty of other fish out there.
The above assumes you're having a good level of interest in the property. If you're having difficulty finding a tenant you might want to consider a referral fee.
Not sure why you would pass on potential good tenants because you don't want to pay out a couple of hundred dollars. You don't have to pay them 75-100% of the first months rent like a typical property management deal. Most co-brokered deals in the PM industry between realtors pay significantly less. Offer to pay them 10% of the first months rent if it works out. You can still show it and run them through your processes.
List in your Ad "No Agents No Agent Fees Paid"
DISCLAIMER: I am not familiar with rentals in NJ or an area with tons of rentals. I am also primiarily not a rental agent, so when I call it's normally a favor for a friends kid or something and I am just looking out for their best interest. So if an agent that deals with rentals as a primary and is in an area like NY or NJ says something contrary, trust their take on it.
I would recommend saying something along the lines of: You are welcome to setup a time but your client will be responsibile for any fees associated with your services. We discuss our fees all the time and me going back and saying "There is another location that fits your criteria, but if you are interested you will have to cover my fees" is not something we are scared of. Most times the client says "Yeah no thanks, what else do you have". I have heard though that tenants paying is common in some areas as well though.
@Mark Benevento it won't hurt to call the Realtor back, see what type of prospective tenant they have, it may be exactly someone that fits perfectly in your property. Then day, I'm willing to pay xxxx dollars for the referral if they qualify and move in
Thank you all for the feedback! I appreciate your help.
Our Texas buyer/tenant rep agreements have a clause that states the broker will attempt to collect the commission from the seller/owner, but if he's unable to do so, the client agrees to pay the specified commission. I doubt it's used very much, but it is there.
I usually have a realtor or 2 contact me on behalf of a client although all of my ads ask them not to. I will always show an apartment to anyone interested- but frankly I think very little of the realtors who contact me. I would never be concerned about a referral fee because I would never for one instant consider paying it.
This is not the 1980's, they are not tapped into some stream of information that the every day joe isn't. Furthermore, there is no legwork involved. Lastly, in NJ (unlike NYC) you have a realtor because you are looking for a house, so any lease will likely only last a year, IMO.
I had a realtor send me a great professional couple this last go round. Man I wanted them so bad- apparently they told the realtor that they loved the place, but I didn't hear this until a day and a qualified tenant later. I am better for it.