Real Estate Agent Question

6 Replies

Hi @Shari Poole . I am both an investor and a realtor in New Orleans. Are you a licensed agent or a wholesaler?

Typically speaking, a licensed agent can only pay a referral fee to another licensed agent, and any and all payments of any kind to a realtor must be paid through the broker they hang their license with. But there may be exceptions and some states have varying rules, although RESPA is a federal rule.

See here:

I would suggest speaking with an attorney in your area to ensure you are in compliance with RESPA.

It depends if the lead is for the agent to buy for him/herself. So, here is the interesting thing: A Realtor cannot pay a referral to a non-licensed person if the Realtor represented one of the parties in the sale as a Realtor (i.e. listed the property, seller or buyer is a client etc.). BUT, if the Realtor is the buyer of the property and/or is assigning the contract and is not representing any party in the transaction, it may be OK to pay an assignment fee to a wholesaler. In my opinion, it is not OK (legal) for an agent to pay an unlicensed person for a listing or a buyer lead and since you said "part of their commission, I would assume that this is the case. As @Braden Smith said, speak to an attorney (specifically, a Real Estate attorney who is not involved in the transaction in any way).

Typically, at least here, an agent can pay for a “lead” ie, vacant properties, fsbo’s, etc. for Just the information.  But they can Not pay a fee contingent upon the property closing/collecting a commission.

@Shari Poole

"I was told multiple times it is not legal but had one agent tell me she called the grand pooba of ga reall estate and was told that rule is misunderstood and it is legal. So IDK"

Well as long as that agent and the "Grand Pooba" of Georgia Realestate are willing to stake their licenses on it then go for it. It is not you who would get in trouble anyways. This is of course assuming you are the unlicensed person looking to get a check after closing/listing. If you were the licensed agent asking if you could offer $100 gift cards to people for bringing you a lead, I would caution you. If you are one of the people getting the $100 gift card, then Party on Wayne.

EDIT: HAHA I didn't know Wayne posted when I submitted...

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