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dan332

Paying a referral Fee to neighbors

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Is there anything that is illegal about advertsing to homeowners in a neighborhood that you will pay them a referral fee if they help find a buyer or seller? I dont want to be accused of "practicing RE w/out a license"!

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I don't think so, Dan. Far be it from me to know every nook and cranny of the real estate code, but that sure seems like a stretch to be accused of brokering real estate without a license.

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Is there anything that is illegal about advertising to homeowners in a neighborhood that you will pay them a referral fee if they help find a buyer or seller? I don't want to be accused of "practicing RE w/out a license"!

Depends on your state. In Florida, it is not illegal to pay such a fee. It is, however, illegal to accept it, meaning that the homeowner, not you, is practicing brokerage without a license. The question is, who is going to report you?

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I am not qualified to give legal advice, so heres my opinion

 

I would think that if you did not have a specific house you were trying to get sellers/buyers for there would be no problem. You're just soliciting information. Anyone can do that

 

I don't think it would be a problem if you were looking for buyer referrals for a particular house as long as you had that house under contract so you are a principal. I mean, FSBOs can do whatever advertising they like because they own the place. With a signed contract, you are a principal too, so I don't see why you couldn't do this referral from neighbors thing.

 

Randian had a good point of who's going to report you. In looking to what could go wrong, the only person I could see reporting you is a disgrunted realtor that hate investors. But if you either had no house and were just trying to get a seller/buyer list or if you had a house and were under contract as a principal. What could they do.

 

Good question!

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We'd be hanging doorknockers where one side would say "we have a house in YOUR neghborhood on RTO so if you have any friends or family you'd like close by, this is a good deal, etc.." The other side would say "If you know of anyone needing to sell their place and they are having a tough time, call us, we have a solution" In both cases offering a fee when we find a T/B.

 

Since we'd hang these on all doors, even those with a Realtor sign out front, we'll probably piss off some realtors.. thats why I asked.

 

Thanks to all for great input... will probably try this and see what happens!

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Personally I've never found referral fees to work anyway. People will readily refer you just because of what you do, you don't need to pay them.

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People will readily refer you just because of what you do, you don't need to pay them.

 

 

...applies to chicks as well. :lol:

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Hey everybody,

 

My opinion is do you get in trouble for tipping a water. but on the other hand does is have some simularities to white water (somebody gets a kick back)....

 

I give them but I don't advertise....

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Hey everybody,

 

My opinion is do you get in trouble for tipping a water. but on the other hand does is have some simularities to white water (somebody gets a kick back)....

 

I give them but I don't advertise....

Tony?!?! :D What the?!?!?

Welcome back, bro. Always good to hear from you. Hope all is well with you and the family. :lol:

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All is fine we just moved, into the new house. I mentioned it like in January. it worked out well we didn't close untill june and worked on it for 3 month. which kept me in my old house just over 2 years.....to those who don't know that means tax free $$$$.

 

Never in my life would I have thought we would have this nice of a house. And I can never thank MC enough for his encouragement when I started back when the board had less then 60 members, now there is over 4500 (happy b-day pinkerton & DanielleSnyder).

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All is fine we just moved, into the new house. I mentioned it like in January. it worked out well we didn't close untill june and worked on it for 3 month. which kept me in my old house just over 2 years.....to those who don't know that means tax free $$$$.

 

Never in my life would I have thought we would have this nice of a house. And I can never thank MC enough for his encouragement when I started back when the board had less then 60 members, now there is over 4500 (happy b-day pinkerton & DanielleSnyder).

I appreciate the kind words, Tony. That's the best payback of all! :D

And, yeah, you are one of the oldtimers around here, aren't you? Sixty members? I think I had hair back then! :lol:

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Is there anything that is illegal about advertsing to homeowners in a neighborhood that you will pay them a referral fee if they help find a buyer or seller? I dont want to be accused of "practicing RE w/out a license"!

 

You can pay anyone you want a referral fee. You can advertise it, you can paint it on your truck and you can fly a plane that writes it in the sky. It's ACCEPTING a referral fee that can be an issue if you're not a principle.

 

And yes, referral fees work. They work especially well a second time with people after you've come through for.

My two cents,

Adam

PS Tony? WTF? Where have you been?

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Adam,

 

I've pretty busy, stopped in here and there from the library (computers been down for 9 month or so [i am lazy]). I have been busy with a couple of rehabs a sl/o turned sub2, rehabed my new house it was built in 1973 and never touched since.

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Adam,

 

I've pretty busy, stopped in here and there from the library (computers been down for 9 month or so [i am lazy]). I have been busy with a couple of rehabs a sl/o turned sub2, rehabed my new house it was built in 1973 and never touched since.

 

Well, it's good to hear you're alive and still kicking it with the REI. :D

 

SLO Turned Sub To = Tax Advantage

 

Cool stuff!

Keep us posted on your endeavors!

Adam

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