Referral fee?

I have been asked to find a real estate agent by a relative who wants to sell the house I had
rented for some years (I recently moved out so it could be sold). My relative lives some distance away.
The property will sell easily to a developer for about $1mill.
I know a good real estate agent locally. Can I ask the agent for a cut/fee if my relative agrees to engage them?
Thanks.

 

Pleased I’m not your relative.

But yes you can ask the agent for a cut.

 

The agent would need to disclose the referral fee to the relative

 

Yes. In NSW this would be done on a Section 47 disclosure, and the relative would be asked to sign the disclosure along with the agent.

 

Gosh...

 

Why? How does it adversely effect my relative?

 

Are you swayed to refer to the agent who will give you the biggest kickback?

 

No. I said I know a good agent and my relative can choose her or not.
It's helpful if you stick to the property chat. I can go elsewhere for moral judgement.

 

Thanks.

 

Thanks.

 

Just like any referral - you may be lucky enough to get a box of chocolates or flowers. Oh! I have assumed that you are female and may prefer these gifts over a case of twisttops. How judgemental of me.

Don't be expecting $$$ as a kickback from the agent.

 

Others have pointed out the clear conflict. You also potentially increase costs for your relative (your payment may decrease the chance of the agent giving a better deal to the relative on their commission) . If you don’t want moral judgments, act 100% in your relatives best interests and don’t ask for a monetary payment.

 

Might be best asking your relative to compensate you for the leg work.

 

Take 20% of the REA commission, clearly whatever cost you give to the agent surely won’t be passed onto your relatives...

Why would you want to profit and cost your relative for your opinion.... it isn’t like you are doing anything else but saying a name.

With a relative like you it must be hard to keep friends as I wouldn’t be friends (or relative) if you tried to pull this stunt on me... if you sold it or actually worked for it then I can understand compensation.

 

I give a lot of referrals to other real estate professionals. A great example would be conveyancers & solicitors, there's a couple that I like and I send them as much business as I can.

I've never asked them for a referral fee, they've never offered one. Conveyancers and solicitors don't really reciprocate much with referrals of their own as by the time they see a client, the finance has probably already been decided.. I do get the occasional referral back, but it's very rare and often people whose finance is already in trouble (not exactly prime business).

I send them the business because they're good at what they do and I want my clients taken care of. I use them when I transact property myself and I pay them fairly (although they do give me mates rates, but they often do that for my clients as well).

The referral is simply done out of mutual respect and care for the people we're dealing with. No ulterior motives.

If you want moral judgement, it's simple. I wouldn't entirely trust a referral from someone expecting to profit from that referral. Remuneration for doing work is fair. Remuneration for giving a name isn't work and is inherently conflicted.

 

Yeah - There are many people on PC who recommend and refer out of mutual respect and care for the parties we know and deal with. We just want them looked after and know if they get a great service they may see my referral as my professional reputation at stake.

I actually get offended and wont consider anyone who asks me for a referral arrangement and likewise I'm sure they may be offended if I did same. Never do and never will.

Thats the thing with PC...If you stick your neck out and the majority dont agree someone will judge you. PC is where you get praise or a kick in the pants. An open forum of divergent ideas. Hopefully abuse free.

 

100% agree. I've never paid a referral fee - there's WAY too much of that in real estate. I prefer that my clients know any recommendation is genuine and not because they're getting some pocket money to throw clients my way.

 

the concern is, if the agent you recommended performances well and get a good price for your relative, it is all good then.

however, when things go pear shape for whatever reasons ( market, timing, purchaser, finance .....), and your relative didn't get what he thought he would, and then later on found out the agent paid you a fee, then it is not hard to arrive to the assumption that " you recommended the agent because the agent paid you a fee", how will your relative feel then? he might think you sold him to the agent. and the words might get around in the family, not a good look, isn't it?

 

Same here. I make $0 from the people I refer to for my clients.

SA legislation goes one step further and it is illegal for a real estate agent to request or accept payment from a conveyancer/solicitor for referrals.

I have also had selling agents offer me referral fees (10-25k) for introducing a buyer to one of their new builds, which I decline. Not that I would generally look at OTP apartments in the CBD anyway!

 

How about the rule in Melbourne, does NSW and VIC do apply same disclosure?