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Rainmaker
439,776
Mike & Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

Paying a referral fee is a sore subject with me ever since I had an AR agent try to cheat me out of a $20K referral fee...I think it is sickening that someone would try NOT TO PAY.  A referral agreement is a contract.

HOWEVER...agent A sent a referral to agent B that expired in 1 year.  That referral contract is dead.  Agent B does not need to pay.

Who cares how many referrals you gave them or your expectations or what you ASSume? 

If you want referral fees to go on forever, do not put in an expiration date.

Eve

Oct 11, 2017 02:51 PM
Rainmaker
3,821,681
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

if your referral agreement expired and said nothing about future sales or listings, no referral is due.... that's my opinion....

it's not like the cemetery and perpetual care!

Oct 11, 2017 02:50 PM
Ambassador
2,098,094
Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

If I were Agent A, I would not expect a referral fee from Agent B (per the Contract). However, if Agent B is worried about future referrals, they may, out of courtesy/respect, pay this time. 

If I were Agent A, I would change that referral expiration date to 3 years - most tenants will wind up with a 1-year lease and then go 1-3 more months (month-to-month) while they secure a purchase. That would expire almost all 1-year agreements in our area.

Oct 11, 2017 04:18 PM
Rainmaker
4,120,055
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Follow the terms of the written agreement.

Oct 11, 2017 03:43 PM
Ambassador
2,970,345
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams fox cities - Stevens Point, WI
Forestland Experts! 715-204-9671

A lot of ethical quicksand abounds when we refer for fees rather than to make sure the best agent goes to our referees.

Be specific with your referals and you will have less problems.

Oct 11, 2017 03:25 PM
Rainmaker
529,358
Brian L. Sirota, Esq.
Bristar Realty (Realtor/Attorney) - Orange, CA
For Solutions: (714) 501-7660

Your own facts indicate the referral agreement expires after 1 year, thus no referral fee is owed 2 years later.   

Further, in one breath, you discuss fees from multiple referrals as a professional courtesy, but in the previous breath, you discuss a definite referral arrangement.   It sounds like you're fishing for alternative theories to argue for a fee, when none seems to be owed.

I say this as someone who's generally very liberal and generous with such fees, but not when there's bad faith involved.

Oct 11, 2017 02:54 PM
Ambassador
1,782,634
Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

    Professional courtesy and "the right thing to do" mean absolutely nothing when it comes to getting paid.  It has to be in writing, before the expiration date.

Oct 11, 2017 03:44 PM
Rainmaker
315,510
Peter Mohylsky
BETTER HOMES AND GARDENS REAL ESTATE - Destin, FL
Your Bucket List Broker in Destin, Fl..

This sounds like  a test question.  I got lost in the a's and b's.  Follow the Golden rule.  It is a good guide.  25% is a standard fee in this industry.  

Oct 11, 2017 02:43 PM
Ambassador
1,131,452
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Pass your test, find a broker, work with the broker on this.

Oct 11, 2017 02:43 PM
Rainmaker
190,560
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

There is obviously no conractional obligation. But I agree - what is the right thing to do? If that agent has been providing you with additional referrals, I believe giving a referral back honoring the original terms of the contract is going above and beyond what is expected. But if the shoe were on the other foot, how would you feel about someone doing this to you? 

Oct 11, 2017 04:56 PM
Rainmaker
664,153
Thomas J. Nelson, Realtor,CRS,e-Pro
Big Block Realty 858.232.8722 - La Jolla, CA
Co-Host of Mail-Right's: Real Estate Agent Podcast

If you want a relationship with this agent: yes. 25% of one of the deals.

If you do not care about the relationship, then the agreement expired and you're legally clear.

Many agents forget these agreements default to 1 year unless they alter it.

If it were me, I'd pay on one transaction, 25% to keep the givers gain karma, but that's me. I do not think you owe on more than one deal, but the spirit of that agreement had no time limit if you want the relationship to continue.

Oct 11, 2017 03:11 PM
Rainmaker
1,144,754
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

Legally Agent B had all rights not to pay any referal fees since the contract expired. 

The same situation when you change the broker. 

However.... it is a good example how it works in real estate, the referral contract can not be expected to go forever. Agent B was working 3 years to get those sales. 

Oct 11, 2017 11:48 PM
Ambassador
3,249,929
Jeff Dowler
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

The agent should be disappointed and angry that they set up a written referral agrement with a 1 year expiration to begin with. There is nothing due after 1 year

Oct 11, 2017 08:22 PM
Ambassador
3,220,502
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

If the agreement expired then nothing is to be expected on either side. That is why we puts things in wrting in real estate and have expiration dates.

Oct 11, 2017 05:11 PM
Rainmaker
477,958
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

I agree with Debe. Karma is a hairy bitch in situations like this. Agent A's statute of limitations ran out. To boot, the client obviously liked Agent B, doing multiple transactions with them. Agent B, however screwed themself by creating ill-will with A.

Oct 11, 2017 05:04 PM
Rainer
390,948
Steve Higgins
RE/MAX Kelowna - Kelowna, BC

The proper thing to do would be to refer the client back to you if they needed a Realtor provide you guys have a good working relationship, which it sounds like you do if you have continued to refer to him/her. We pay a 25% referral fee 

Oct 11, 2017 05:03 PM
Rainmaker
435,588
Gloria Valvasori, ASA
Better Homes and Gardens Real Estate Signature Service - Streetsville, ON
Outstanding Service Since 1987 416-717-6331

You pretty much answered your own question.. the agreement is dead.. so no referral fee is payable in my view.

Oct 11, 2017 04:47 PM
Rainmaker
1,359,973
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

I agree that if the referral has expired nothing is due.

Oct 11, 2017 04:46 PM
Rainmaker
1,975,315
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Waxhaw/Fort Mill Area Realtor

You want a referral paid... you need to outline circumstance, terms, etc. in advance. 

Oct 11, 2017 03:53 PM
Rainmaker
2,150,934
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Many good answers.

Oct 11, 2017 03:49 PM
Rainmaker
1,349,091
Sandy Padula and Norm Padula, JD, GRI NMLS#1483386
Realty One Group - Carlsbad, CA
Presence, Persistence & Perseverance

As others have already written. Hope you pass your test.

Oct 12, 2017 06:33 AM
Rainmaker
1,011,686
Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

I can understand Agent A feeling a bit disappointed that Agent B did not take the initiative to send along a referral fee. However, the agreement specifically stated after a year, the agreement was no longer valid. So Agent B has no obligation to do so.

If Agent B wants to get more business from Agent A, he/she should go ahead and send along a referral fee.

In the interim, Agent A should decide if he/she wants to keep giving Agent B business, and should adjust his/her agreement documents' expiration dates accordingly.

Oct 12, 2017 03:20 AM
Rainmaker
604,073
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

I'm just 1 month past the referral expirtation on a succesful high-dollar sale. As the referring agent that did a lot of hand holding with my long-time clients that were relocating, I think the other agent should honor the fee. So far no sign of that happening though...

Oct 12, 2017 02:49 AM
Rainmaker
278,880
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

First thing to do is read the referral agreement and find out the terms.

Second, follow those terms.

Oct 12, 2017 08:01 AM
Rainmaker
403,030
Nathan Gesner
American West Realty & Management - Cody, WY
Broker / Property Manager

I'm a Property Manager and get referrals from other agents all the time. I haven't created a standard referral form yet but this is what I currently offer - in writing - to anyone that refers an owner to me for property management.

Agent Betty refers Owner Jones for property management. I send Agent Betty a referral agreement with the following guarantees:

  1. If Owner Jones signs a one-year management agreement with me, I will pay Agent Betty a small referral fee for bringing me the new Property Management business.
  2. If Owner Jones decides to list the home for sale and it has been less than five years since the referral for Property Management, I promise to refer them back to Agent Betty for selling.
  3. If the Owner chooses to stay with my office for the sale and it has been less than three years since they were referred to me, I will notify Agent Betty of the Owner's decision and offer our standard sales referral fee.
  4. If it has been more than three years but less than five, I will still refer Owner Jones back to Agent Betty. If Owner Jones chooses to stay with my office, I will notify Agent Betty of the decision but I will not offer a referral fee.
  5. After five years, I am under no obligation to refer Owner Jones back to Agent Betty, notify Agent Betty of a pending sale, or offer any referral fee.
Oct 12, 2017 06:07 AM
Rainmaker
2,343,059
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

If the contract expired, nothing. If you will do future work with the agent who refers a great deal of clients, you may want to offer a referral. But if it is long after the closing, the damage may have already been done to get future referrals. 

Oct 12, 2017 05:39 AM
Rainmaker
2,470,602
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Roy Kelley nailed this one!

Oct 12, 2017 05:27 AM
Rainmaker
3,224,243
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

The referral agreement is 2 years past the experiation date so no fee

Oct 11, 2017 05:44 PM
Rainmaker
2,156,557
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Find happy and if you have to think about it, you have an additional issue. 

Oct 11, 2017 05:36 PM
Rainmaker
752,582
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

 

That is the way it went. It is a cruel world.

Oct 11, 2017 03:32 PM
Rainmaker
3,787,692
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

If I were agent A, I would not have a year limit on the referral agreement.

Oct 12, 2017 06:34 AM
Rainmaker
3,606,767
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Others have answered.

Oct 12, 2017 06:08 AM
Rainmaker
2,263,303
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker

Per your stated facts no referral due. If agent A would have maintained contact he may have had an opportunity 

Oct 16, 2017 05:43 AM
Rainer
152,742
Caroline Gerardo
Eagle Home Mortgage, LENNAR HOMES Home Loans - Newport Beach, CA
C. G. Barbeau the Loan Lady

Only what is in writing matters in real estate. Agent A should have kept in contact with tenant- sent holiday cards, emailed, called a few times. Tenant is out of the area and out of mind. If Agent A did not maintain the relationship it is not up to Agent B to circle back and send some money. However, Agent B will get no more referrals.  Next time send a referral with an agreement to pay x $ year 1 X $ on year 2 and 3. Let it go. Find new referral source. If send listings and buyers to agents who don't reciprocate with business (they give my name out to  4 others and the business is one-way silent - then no more referrals. 

Oct 12, 2017 01:52 PM
Rainmaker
2,261,585
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Will be a interesting subject.  Always have a deadline in your agreement that all parties are on the same page.

 

Oct 12, 2017 11:03 AM
Rainmaker
908,169
Ryan Huggins - Thousand Oaks, CA
www.HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I stick with the letter of the contract.  I referred a friend recently who bought with that agent.  The contract stated buy in one year and that transaction has been completed.  Per the contract if she buys in 366 days from when it was signed, I do not get anything.  If she wins the mega lottery and buys up half of San Diego before the 1 year mark is up, I'm going to be a very happy man!

 

Now with that said, if someone was referred to me and they bought within that year I would pay per the contract.  If they bought again after that contrat expired, I'd most likely send a small thank you gift card to the referring agent.

Oct 12, 2017 08:28 AM
Rainmaker
607,107
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

As you said, no contractual obligation. However, I sense some moral obligation - maybe you could take the agent out to dinner or give a gift certificate, to maintain good will, but not a referral fee - no obligation there.

Oct 12, 2017 07:21 AM
Rainmaker
1,254,917
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

There is no obligation to pay a referral fee after the expiration date. The referral agreement is a contract with an expiration date whereby the agreement expired. You should have negotiated a longer period of time in the original referral agreement.

Oct 12, 2017 06:40 AM
Rainmaker
565,222
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Yes, referral fees should be paid. 

How much? Not a penny more that specified.

Is it the referring agents best practice to stay in touch with their referred contact to insure they are informed of the status and concerns of their friend. 

MORAL: The neglected relationship always goes bad.

Oct 12, 2017 06:32 AM