Boise Real Estate’s Referral Agents
As the Boise real estate market slows, many agents are dropping their real estate licenses or going inactive.
Some, though, are hanging on and moving to companies who allow them to be “referral agents”.
What is a “referral agent”?
It’s an agent who is not actively practicing real estate as a full-time professional, but rather referring friends and relatives to another agent in their office.
In return, they receive a referral fee from the agent who actually works with the client.
That referral fee is usually 20-30% of the commission the agent receives at closing, and is often not disclosed on the closing statement because the broker pays the referring agent outside of escrow.
This is perfectly legal, but I think the public would be better served by full-time professionals instead of agents who are working on the fringes of real estate.
February 28th, 2009 Posted in Inside Real Estate
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2 Responses to “Boise Real Estate’s Referral Agents”
By Paula on Apr 7, 2009
The public would be better served by full time agents? Don’t your agents enjoy receiving a “few fish” once in a while in addition to fishing for clients on their own? And isn’t the client better served when put in the hands of a good agent? (someone who matches up well with the client). So what is wrong with the referral agent receiving a commission if they are the one who found the fish and brought it to the agent? How is that any different than you handing money to an ad agent for running an ad to bring a client? Or money to the grocery clerk for your food? Maybe the fee/commission should be considered an advertising fee for word of mouth, rather than looking at it as “giving up some commission?” I would think a referral agent would be looked upon as a “friend in the business” who is feeding agents fish to fill their baskets with more than they could get on their own. Especially in this economy. Maybe we need to re-think how we view the referral agents and the pay stucture and have some gratitude around both…since they are helping us feed our families in these tough economic times? Just a thought.
By Phil Hoover on Apr 7, 2009
I believe the real estate profession is populated with far too many agents and that our clients are best-served by dedicated, full-time, experienced professionals.
One problem with so-called “referral agents” is that they expect to be paid a referral fee for doing nothing more than passing along a name of a potential client to an active agent.
Then, they collect their referral fee without disclosing that they just happened to recommend the active agent because they expected to get paid.
Real estate fees should be transparent and appear on the closing statement with upfront disclosure to the party being referred.