We Pay 25% referral fee for Buyers and Seller Introductions
|
Difference between a referral and a lead.
|
Referrals are different than leads, but we're happy to compensate for both.
BUYER OR SELLER REFERRALS This is anyone you know and can introduce us to, that is considering Selling a Property or Buying a Property. BUYER OR SELLER LEADS
This is anyone that you "know of" that is looking to sell or buy a building OR any building that you know is about to go to sale (before it is public). A lead means no introduction is made. If you can endorse us, make an introduction or provide contact information - great! We will pay you 25% of the side of the transaction we get from your introduction.
If it's a lead you have, we will pay you 10% of the side of the transaction we get from your lead. |
Or just call us: 310.980.4562 (Peter)
|
How is the referral fee calculated?
|
This is a question that we want to make very clear - because the answer is it depends on whether the referral is a BUYER or a SELLER (or Both!).
For BUYER REFERRALS, the fee is equal to 25% of the cooperating agents fee paid by the Seller OR in some cases, the Buy-Side Fee paid by the BUYER. An example on a $2,000,000 transaction where the fee is 3% looks like this: 
For SELLER REFERRALS, the fee is equal to 25% of the sell side fee. All Seller paid fees are divided equally between Buy-Side and Sell-Side.
For example, on a $2,000,000 sale at 6% the total fee is $120,000. This is split 50-50 between buy and sell side, $60,000 each. 25% of the $60,000 on the sell side, or $15,000 is paid as a referral fee. 
For BUYER & SELLER REFERRALS (on the same Transaction) where the referral fee is paid for introductions to both the BUYER AND THE SELLER, the fee is equal to 25% of the total fee paid by the Seller.
EXCEPTION: We will make an exception to anyone who can make a referral where 3 conditions are met.
In this scenario, we will make the Sell side fee 4% and the Buy side fee 2%, so the referral fee becomes 25% of the majority side (equal to 1% of the entire transaction when the commission is 6%).
|
Are there any exclusions?
|
Yes. 1) A referral cannot be a referral to another Agent (We don't pay referral fees to people who refer me to other agents). The referral fee is strictly for introductions or information about owners of properties that are about to sell or list (that are not represented by other agents) or principals that are considering buying. 2) Any information that's public is not accepted. We are looking for insider information. 3) Any information on any deal that is publicly listed is not a referral. 4) A referral cannot be for any property or principal that we already know or are working with. If you're unsure if we know someone please ask before providing the referral. 5) We are not interested in "daisy chains" - or referrals of referrals (where multiple parties are referring the same entity). |
F.A.Q.s |
1) I have heard that CA Brokers cannot pay referral fees to unlicensed people?
This is a Myth. See this excerpt taken from this E&O insurance company (they know!). "In California, the Bureau of Real Estate and California law permit a licensed real estate brokerage to pay a referral fee for a real estate transaction to a person not licensed by the Bureau of Real Estate, only if the person who is to get such a fee was not soliciting on behalf of the brokerage. In short, this “finder’s fee” only applies if the unlicensed individual is solely limited to the introduction of a seller, buyer or both to a licensee. The caveat is that the “finder” is not involved in any negotiations as to the real estate transaction. In California, a “finder’s exception,” allowing an unlicensed person to be compensated for introducing parties to a real estate transaction, has been judicially approved since 1923. As explained by California’s Supreme Court in Tyrone v. Kelley (1973) 9 Cal.3d 1." Referral Fees and RESPA in California Real Estate Transactions Under California law, a real estate brokerage can compensate an unlicensed individual with a referral fee when a property sale closes—so long as the person who made the referral was not acting for the brokerage in an active or soliciting role. The referral fee may be paid if the unlicensed individual’s involvement was only to connect a buyer, seller, or both with a licensed agent or broker. *** The individual cannot take part in discussions or negotiations about the terms of the sale. (If you do this, you will be disqualified) California courts have long recognized the “finder’s exception,” which allows an unlicensed person to receive compensation for simply introducing parties to a real estate deal. This principle has been upheld since at least 1923. The courts have differentiated between a “broker,” who is involved in negotiations, and a “finder,” whose sole function is to bring people together to make their own agreement. The California Attorney General clarified in a 1995 opinion that brokerages may only pay referral fees to unlicensed individuals if those individuals did not introduce clients on behalf of the brokerage itself. RESPA (at 12 U.S.C. § 2607(b)) prohibits any payment or division of fees from settlement services in transactions with federally related residential loans on one-to-four-unit properties, unless actual services are performed. Therefore, if a finder is paid a referral fee in a transaction involving such a loan, this payment may violate federal law. California still allows strict “finder’s fees” in real estate, but they must not cross over into brokerage activity or violate federal underwriting restrictions under RESPA. All parties should carefully review their specific transaction details in light of these long-standing legal principles. 2) I am referring the Seller and the Seller is paying 6%, why am I not making 25% of 6%?
In California, there are 2 sides to every transaction, Seller side and Buyer side. If you're referring a Seller then we need to find a buyer to complete a transaction. That means that when we market through our network we offer a sub agent fee to anyone who brings the highest offer. The sub agent fee is 50% of the total seller paid fee. Therefore, we are not being paid the buy-side portion, most of the time. Even if we do find and represent a buyer through our marketing, we have incurred costs to achieve this. Thus we don't pay a referral fee on a party you are not referring or money we're not receiving. See the exception above on this page for listings with special criteria. |
Is there an agreement?
|
Yes. A referral fee agreement will be part of every opportunity and rules apply. Below is one that you can download, but for each deal, a referral fee agreement will be DocuSigned to the referrer. It's a standard California Association of Realtors Referral Fee Agreement and it is submitted to escrow and paid directly at the close of escrow.
| ||
