somebody post it in craigslist ad// under "Free"

it probably ****ed off a lot of agents who saw the ad, that's why it was deleted by the author right away.. I saved it on my computer too and emailed the local realtor's association..also I emailed the author about it and he said that it's like a rebate.. that it is not illegal... I believe it is illegal.. at least here in CAlifornia

here was his ad in craigslist San Luis Obispo:


Diamond Properties 50% Buyer Rebates! $500 Free* *If you refer someone to this program, who uses Diamond Properties to represent them in the purchase of their next property, you will receive $500 within 30 days after the close of escrow on the home being purchased. You Won't Find This Great of a Deal Anywhere On the Central Coast! If you are a buying a home and your RealtorŪ is not giving you a rebate, you are walking away from thousands of dollars. If you are planning on purchasing a home from a cooperating builder or a home listed with any cooperating real estate agency, you can receive 50% of my commission. Take my business card with you when you view the home, and if you're interested in buying the home, give the sales person my card and say, "I'm working with this agent." Also, don't be afraid to ask how much commission they're paying to cooperating real estate brokers. It is normal for the listing broker or builder to split half of their commission with the buyer's agent. I (your buyer's agent) will then split my commission in half with you. Generally speaking, builders and real estate offices pay a buyer's agent a 3% commission on a home, so on a $500,000 purchase, you would be getting $7,500 cash back (my commission would be 15,000 and you get half). If you're buying a more expensive home, you can see how the amount of cash back greatly increases proportionally. Be Aware: Some home builders require that you have your agent with you on your first visit so it is a good idea to ask them on the phone before you go and I will be glad to accompany you there. However, other builders only require that you register/sign in and present your agent's business card on your first visit. You have to fill out an informational W-9 tax form that I can provide you with (this only asks for your name and social security number and is not sent to IRS). The information is used to file a 1099 (this informs the IRS that I paid you the rebate). This is required by the IRS in order for me to write you a check for 50% of my real estate commission. Email me and I will send you some of my business cards. If you have any questions please feel free to call or email me. $500 Free*

advertising a buyer rebate is legal in CA but advertising a $500 referral fee for somebody to send you business is illegal; for that matter, telling someone privately that you'll give them $500 to refer you business is also illegal

A new member joined this week "oakenfold" is his ID. He is a Law Enforcement Officer dealing with RE Crimes and Mortgage crimes according to his post and Signature. He is also in California. He may be able to shed some light on it?

thanks Jerry and REODayton

Thanks REODayton,

Commission/referrals given to unlicensed individuals are generally illegal if the referrer is giving this agent business in order to get the commission. What's sad is that the general public thinks its ok (which logically seems ok, right?), refers customers, the agent gets his commission, and stiffs the "referrer." This referrer has no recourse because the agreement was illegal in the first place.

The poster in Craigslist seems a little smarter by disguising his referral fee as a "rebate."

If it is a true rebate- then it's generally ok since it means the actual customer is getting the money back assuming its disclosed to the lender and all other interested parties.

Dear Oakenfold:
Why is it that loan officers working with a real estate broker must be licensed, yet loan officers working with entities licensed under Dept of Corporations do not need to be licensed to take loan applications?

Hi Calif Dreaming - Good question

RE agents are limited to the power of their brokers. Additionally the DRE only issues two types of licenses agents and brokers for real property resale. The DRE does not recognize the title of loan agent as an official "licensable" status.

The DOC deals mainly in state securities laws, some of which is incidentally secured in real property. The ability of unlicensed person working under CFLs to accept loan apps is just an added benefit in working for a CFL.

I don't think the San Luis Obispo broker was trying to disguise a referral fee as a rebate in his ad. I think it was only when he was challenged to explain what he was doing that he tried to rationalize it saying it was "like a rebate" to bpoaddict. Incidentally, the San Luis Obispo broker has another Craigslist ad running. He only mentions buyer rebates but is not advertising $500 for people who refer business to him -- at least not in that ad. As far as I can tell, he has been a broker for 4 months with no prior CA real estate sales license.

Sounds likes a referral to me. $500 to the referrer.

This portion, I believe, addresses the rebate.

Maybe I'm wrong but it is so poorly written, I don't even think he knows the difference between a rebate and a referal. Probably slept through class that day.

My guess it's a young guy whose broker just told him to "go sell some real estate".

Jerry the guy running that post is probably why the public in general has such a low opinion of our profession.

Clarification on two points as I understand them. Under DRE guidelines, you can pay a referral fee to someone not licensed as long as they are referring friends, family and existing clients. You cannot pay a referral fee to have them round business up for you. If you work with an owner of a car dealership, you can pay him a referral fee for referring his mother, secretary and Joe who bought that BMW last month, but you cannot pay him a referral fee to cold call the phone book and bring you a lead. I spoke with the DRE on this topic about 2 years ago, unless they changed their rules, I know this to be true.

With regards to CFL/DOC license requirements. CFL licensed brokers can pay non-licensed individuals to work files in a manner that the DRE would require a license for, but they cannot work DRE files, only files done under the DOC, and they must be paid a salary/hourly wage. They cannot be straight commission agents.

Not only that, but you can go get a CFL/DOC broker licnese in about 3 months time with no test to take, no experience required. All you need is a minimum net worth and a bond. Fill out some paperwork and wait a couple months, you're a licensed broker under the DOC. Some limitations over the DRE broker licence in terms of what lenders you can work with, however.

Who is DRE what is CFL and DOC?

Stab in the dark:

DRE = Department of Real Estate (Real Estate Commission in other states)

CFL - California Full of Lunatics

DOC -Department of Corporations

Hit the nail on the head!