I am a new broker in Colorado. What regulations are there in regards to referral fees?
Can you give a referral fee to a mortgage broker/banker who gives you a client?
What about leasing agent, etc.?
Thank you.

You need to check your state statutes and also your license laws which will cover this scenario. A call to the real estate commission if you can't find the answer is best.

Don't depend on answers from anyone else. Saying I followed so and so's advice won't get a reprieve from your r.e. commission for a violation.

I second what super realtor said. Check with your state's RE commission.

In my state you can't pay anyone but another agent or broker a referral fee.

Wasn't that covered in your licensing course?

I know everyone is a "broker" in Colorado, but questions like this fall into the area of "pretty basic".

Here, the key is not Colorado law.

Under longstanding federal law, it is utterly illegal to pay a loan officer for referrals (or him to pay you for yours) anywhere in the United States.

RESPA specifically bars this practice and provides for criminal penalties (up to 1 year in jail) for doing so.

Here is the HUD quick summary: http://www.hud.gov/offices/hsg/ramh/res/respamor.cfm#HT

Steve, that is exactly what I was thinking too when I read this thread. It's a federal issue, not a state issue.

and the colorado re commission doesn't give legal advice like that. They've turned into being somewhat useless when you call them.

Commercial transactions are not covered under RESPA law.

So I am just pointing out that RESPA is not applicable to all transactions.

and RESPA says (or used to say) that referral fees are illegal if they are not disclosed. So, I guess if you disclose, it is legal.

Either way it is not worth the risk.

PS I have not read RESPA recently so it might have changed.

Like Super started mentioning, you can give referral fees to third parties for transactions involving 5 or more units, vacant land and other commercial properties. Referral fees to third parties for 1-4 unit residential properties is illegal, even if disclosed.

My mistake, all referral fees in residential real estate are illegal.

Go back to the original posting. . . it wondered about giving a "referral fee to a mortgage broker/banker".

Big "no-no" for residential transactions.

But, I think -- in this context -- the ban may go further.

I spoke with a banker friend earlier today. He said he was barred under federal banking regulations from getting or getting referral fees on commercial too. I suspect agents are not barred from giving but the lenders are.