I'm not a broker/agent, but I spent my formative years living with one. Here's the situation-
I'm thinking of moving to Newtown, about 50 miles from my current residence in Oldtown. I drive around Newtown on a Saturday, meet broker Bob on open house and find that he is really sharp. After researching Bob's experience I decide he will represent me. Bob sets me up with email notifications for new listings. We talk a bit through email, and eventually spend a day looking at a few homes I am interested in. At some point I tell Bob that my dad is a broker in out-of-state Geezertown and was also a broker in-state in Moneytown about 80 miles away, but that he isn't licensed in-state anymore, otherwise clearly I would be using him. Bob later verbally confirms that I am working with him, and not my dad.
My father is a semi-retired top producer and the self-proclaimed "Babe Ruth of Real Estate". Sometime after meeting Bob I call my dad to ask what he thinks about my proposed move to Newtown for better schools for my kids, and he says its a great idea, [u][/u]and he can refer me to a top producer agent in the area. I say thanks dad, but I already found an agent at an open house, who happens to also be a top producer. I don't usually look for agents at open houses, but this time it worked out.
I am a little surprised that my dad is even able to refer someone to an agent in Newtown, where he has never been and knows nobody. My dad tells me he can refer clients anywhere in the United States through his referral network, and he is a pro and can identify other top producers in the area. I thank him and indicate that if it doesn't work out with Bob I will get a referral from him next time. Although, it seems a little strange because I thought a referral was when you had a good experience with someone you refer more business to them, and my dad has no experience with any of the agents in Newtown. In the past I connected my sister-in-law who was buying in Moneytown with my dad for a referral to an agent there (dad still knows the agents there). My dad had moved away from Moneytown, otherwise my sister-in-law would have worked directly to my dad.
My brother hears I am moving to Newtown and thinks he should move there too. I tell him how I got lucky finding a top producer in the area. He asks for Bob's first and last name so my dad can refer my brother to Bob and get thousands of dollars in referral fees. This doesn't sit well with me, it seems unethical. I share this with my brother and he seems to get it (his wife definitely got it), but says he isn't about to screw dad out of thousands of dollars. I don't want to screw dad out of money either, but dad didn't refer Bob to my brother, I did. My dad isn't the type to worry about a few thousand dollars, so I call him up to figure this out. My brother may have been misrepresenting my dad.
Dad lays in to me, but not about the money. He is offended that I didn't ask him for a referral in Newtown in the first place. I argue that I was unaware he could make such a referral, and how would I know given my dad has zero experience or contacts in Newtown.
Dad proceeds to call Bob a dope (who he knows nothing about), and me a financial idiot for buying my current house in Oldtown, and the other houses I have bought over the past 10 years. All of these transactions have been in different cities across the US, and I never lost a dime right through the financial crisis. Not trying to brag, just stating a fact - I was positive on transactions in 2003, 2005, 2006, 2007 and 2009. By the way my dad says all those agents are incompetent too.
I never got a referral from my dad for any agent I worked with over those years. Had I known this was even possible, I would have asked for my dad's help. I think there is some deep seated anger that I didn't reach out to him over the years for a referral that I did not know could even be made.
He goes on to explain that I have no respect for his professional opinion, and that he does extensive research before making an out-of-state referral, and even calls and interviews potential realtors.
Dad is a hothead. I have seen him get aggressive with brokers/agents, so now I am getting worried he is going to destroy my relationship with Bob if he calls him. I suggest my father use his infinite wisdom in real estate to select the best realtor for my brother, and if after he does all of his research and interviewing they still end up with Bob, then so be it.
A few weeks go by. We haven't spoken. I call my mom, also an agent, and she explains that this referral game is standard business practice. How is it that a person such as myself finds a realtor and recommends them to someone else, but then that person's dad gets a referral fee? I feel like my agent is getting screwed. I would like my dad to get the money, but not by screwing someone.
The definition of "referral" is-
To direct to a source for help or information: referred her to a heart specialist; referred me to his last employer for a recommendation.
Apparently in real estate a broker can "direct someone to a source for help or information", even after that person has already been connected with that source of help or information through someone else. Really? Is there is a different definition of "referral" for real estate purposes?