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Referral fees

Discussion in 'General Property Chat' started by Keen as, 15th Feb, 2016.

  1. Keen as

    Keen as New Member

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    I'm thinking of asking some realestate agents and buyers agents to pay me referral fees if I send them clients so I can save faster. Is it possible? Would I get paid cash or gift card?
     
  2. Big Will

    Big Will Well-Known Member

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    I don't know what business you run but don't take this the wrong way...

    If you are not good enough to get paid enough doing your job and require paid referrals to increase your profitability then maybe you should look at your business model.

    The REA by law needs to disclose you are getting a referral fee and all this would do is reduce the clients trust with you and lower the trust with the REA. After all if you were the client whose referral would you trust more a person that is getting paid or one that isn't?

    If you were looking after your client's best interest then the REA will likely refer business back to you, more business more profit.
     
  3. Xenia

    Xenia Adelaide Property Manager Business Member

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    You can only be paid for a real estate transaction if you have a real estate license, that includes everything, property management, referral fees, commissions, finders fees, everything.

    Only a licensed land agent can receive money in a transaction involving real estate.

    $20,000 fine in SA for receiving any money referring to a real estate transaction without a license.

    You also need to be able to invoice the agency. Set up with ABN etc...

    There are legal ways agents can get around it, I'm not going to discuss that here but contact individual agents you want to work with and see if they have an established referral program.
     
  4. RPI

    RPI Property Lawyer, Town Planner Business Member

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    Never been paid a cent for referrals and have given out enormous amounts of them.
     
  5. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Many agents will offer a gift card etc for referring new business from private individuals. There is nothing illegal about that, its pretty common.

    What is illegal is professionals developing a referral kickback that is not disclosed (eg rea's getting kickbacks from conveyancers etc) which make the referral not an arms length transaction.
     
  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    You're thinking of Land and Business (Sale and Conveyancing) Act 1994 s24G, whereas this scenario described would actually come under s24H which is $5,000 max penalty if it's done illegally. Doing so legally is fairly easy / common, though.
     
  7. Xenia

    Xenia Adelaide Property Manager Business Member

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    Me too
    I refer lots of people to buyers agents, conveyancors, accountants and mortgage brokers and do not receive anything back.

    I do expect clients to be referred back however otherwise no relationship exists.
     
  8. Keen as

    Keen as New Member

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    I'm not a real estate agent or conveyancor or mortgage broker or accountant or anything like that. I'm a labourer trying to save up for a house. Just wanted to know if a real estate agent might pay me a referral fee if I send them new customers b'coz I have lots of friends that will buy places soon. And would my friends know I got paid a referral fee or gift card or whatever?
     
  9. RPI

    RPI Property Lawyer, Town Planner Business Member

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    Different scenario. I have seen some agents do so but then only low value gift cards.
     
  10. Big Will

    Big Will Well-Known Member

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    A referral of a buyer for a REA is basically worthless as buyers are not loyal to the REA.

    Give you an example;

    Agent 1 (refered) doesn't have the 4b 2b 2car house that ticks every box including price for your purchasers. Does the purchasers go no I will wait until the REA gets to list the right property?

    Agent 2 this agent is the biggest ahole in the whole world but has listed the perfect property for the purchaser do they purchase it still? Lets pretend it was no as they don't like the agent what if their budget was 500k and this house usually goes for 500k, would the purchasers buy at 480k, 470k? 450k or 400k?

    Buyers are not loyal to a REA, vendors are what the REA agent wants, as you cant sell something you don't have but if you have the stock then the buyers have no choice.

    Buyers agent might be different but how many FHOB are going to be wanting to ustlise a BA for 10k when saving is already very limited?

    Talk to any of them by any means but I would look for more creative ways of generating money.
     
  11. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Generally no because you are referring buyers not sellers.