I think it should be illegal for ANYONE to pay or receive a referral fee.
In today’s competitive market, where listing fees have gone to about 5% or less, are we doing the consumer any good by paying between 20%-35% of our commission to another agent? Does that keep fees artificially high for sellers who were referred?
Personally, I’d like to see that restriction added to RESPA.

Why would RESPA have an interest in one professional providing business for another professional in the same line of work? Just asking for discussion's sake.
If you figure out how much you spend annually in getting clients, you decide for yourself whether it's worth it to you to pay another professional for a qualified lead. If it's not worth it, negotiate the referral fee down or don't take the referral.
Why would you dock the seller - or the buyer - for the fact that someone handed you their business? This is something you would be grateful for, and you would realize that you did not have to perform marketing in order to get this client, and that someone else could have easily handled this client and taken the shared commission.
--A

It should be a federal law, not state and RESPA gives current authorization to pay broker to broker referral fees.

It certainly would take the wind out of those lead selling companies, who use our listings to market to buyers and sell those leads back to us.
Do you know of any other profession that sells leads to each other besides ours?
Is that a professional way of doing business?

How competitive can I be if the seller does not understand the referral business.
One seller who was an American Airlines referral did not understand why I couldn’t list his house for x%, but he still wanted his 100k extra Advantage miles which cost me a 30% referral fee. Obviously I did not get this listing which was taken at 4.5%
By not having to deal with referral fees, it would level the playing field for agents and assure that the referred client gets an agent based on competence and not the highest fee.

Wow you guys are doing 4.5's up there!

That must be a tough market.I would never do a 4.5.

NEVER, say NEVER!!

Why on earth did you sign up for the AA referral service. If the program doesn't work for your business model, why on earth do you participate?

A law against legitamate referrals isn't going to help you run your business any smarter.

Major Real Estate Companies such as ERA, C-21, CB, GMAC and independents etc. have obligations in their franchise/contractual Relo agreements to service clients that have contracts with their owners to provide this service.
For the individual agent it's not a choice, either you work the referral, or you look for a different company.

What makes you think having to pay referral fees will increase your income?

I don't understand why listing fees are going down in your area. In my area we are turning away listings and charging a higher listing fee than before due to the fact that it is now a seller's market and our marketing costs have risen along with the increased time on market. We are also focusing on 12 month listing agreements vs. 6 month listing agreements.

You made the choice to work for a company where you are obligated to pay these referral fees.

There are probably dozens of other brokerages in your market where you would have more control over your business.

However, I'm willing to bet that one of the reasons you work with your brokerage is that you are promised leads.

Passive lead generation is the cause of your problem, not referral fees.

When I get my CRS, I intend to work with others with the designation to insure that my clients get superior service. I also would like to be paid for professionally advising them on what agent to use.

Referral fees are not your problem. Your business model is your problem.

Since I'm a CRS myself, I do CRS referrals. However, I'd rather do them on a "handshake" or lunch than a referral fee.
Wouldn't it be great to deal with each other on a professional rather than financial way?

Well if you start passing laws, that lunch date with your fellow CRS might be illegal as well.

Anyway, I think we would agree at a certain point referal fees get excessive, and that lead generators are a great way to seperate new agents from their money.

However... it shouldn't be illegal.

"I don't understand why listing fees are going down in your area. In my area we are turning away listings and charging a higher listing fee than before due to the fact that it is now a seller's market and our marketing costs have risen along with the increased time on market. We are also focusing on 12 month listing agreements vs. 6 month listing agreements."
I don't know where you are, but on the FOX and CCN news it's a BUYERS market. What's killing the market is the listing fee, most sellers are taking their homes off the market, there is no BUYER that will pay almost 7% interest and for what, sellers greed? Forget it.

rwilson99, I’d rather deal with you on a professional than financial level. Since you chose financial, I probably would not do any referrals with you.

Dan McGonagle, what's your favorite cocktail?
Relax!
There is lots of competition out there. Many new agents with new ideas of how to get rich quick, offering "if I don't sell your house in 89 days I'll pay you $10,000” etc.
Many other gimmicks are offered to the public making us look like the Swami on the late Johnny Carson show. (Sorry I regress)
Our professional image is at stake and the new snake oil salesman has arrived to convince the public that they have the magic potion.
One agents listing marketing piece I looked at this weekend said: “72% of all sellers are not satisfied with their agents”. Are you the one in the majority? Do we need to drag down the rest of our competition to feel successful?
I hope not. Lets bring professionalism back into this business.

Not True,
If you do not want to be on the referral team that is your choice. Company referrals are great and I have never had a problem in paying the referral fee. You get a qualified buyer with a deadline. Life does not get better than that!

[QUOTE]Originally posted by pikes peak:
[QB] [QUOTE] Major Real Estate Companies such as ERA, C-21, CB, GMAC and independents etc. have obligations in their franchise/contractual Relo agreements to service clients that have contracts with their owners to provide this service.
For the individual agent it's not a choice, either you work the referral, or you look for a different company.[QUOTE]