We pay 25% referral fee for Buyers & Sellers

Rules apply.  See rules below.

The Difference between a referral and a lead.

Referrals are different than leads, but we’re happy to pay you for either.

BUYER TIPS
This is anyone that you know or “know of” that is looking to buy a building.  Knowledge of a deal, without knowing the Seller or Buyer is a lead. 

Knowing a Buyer, providing us their contact information, introducing us, and recommending us as the agent to work with is a Referral.

SELLER TIPS
This is anyone that you know or “know of” that is looking to sell a building (a lead) OR any property that you know is about to go to sale (also a lead),

Knowing a Seller, providing us their contact information, introducing us, and recommending us as the agent to work with is a Referral.

If you can endorse us, make an introduction and provide contact information, we will pay you 25% of the side of the transaction we get from your introduction.

If it’s a lead you have, we will pay you 10% of the side of the transaction we get from your lead.  A lead means no introduction is made.

How is a Referral Fee Calculated?

This is a question that we want to make very clear – because the answer is it depends on whether the referral is a BUYER or a SELLER (or Both!).

For BUYER Referrals:

The fee is equal to 25% of the cooperating agents fee paid by the Seller OR in some cases, the Buy-Side Fee paid by the BUYER.  We have no control over what is being offered to the buy side on listed deals.

An example on a $2,000,000 transaction where the fee is 3% looks like this:

 
Price and fees table for real estate transaction.

For SELLER Referrals:

The fee is equal to 25% of the sell side fee.  All Seller paid fees are divided equally between Buy-Side and Sell-Side.  

For example, on a $2,000,000 sale at 6% the total fee is $120,000.  This is split 50-50 between buy and sell side, $60,000 each.  25% of the $60,000 on the sell side, or $15,000 is paid as a referral fee.

Fee structure for $2,000,000 transaction

For BUYER & SELLER Referrals (in the same transaction):

The referral fee is paid for introductions to both the BUYER AND THE SELLER, the fee is equal to 25% of the total fee paid by the Seller.

Price breakdown: $2M, 6% fee, $30K referral.
EXCEPTIONWe will make an exception to anyone who can make a referral where 3 conditions are met.
  1. Condition #1: The referral is to a Seller only.
  2. Condition #2: The Seller will pay a 6% commission.
  3. Condition #3: We can sell the property in dual representation (we find the buyer).
In this scenario, we will make best efforts to make the Sell side fee 4% and the Buy side fee 2%, so the referral fee becomes 25% of the majority side (equal to 1% of the entire transaction). No guarantees, if the escrow drags on forever or the seller renegotiates our fee, this  exception can be nullified.
Fees breakdown for a $2,000,000 transaction.

Send Us a Referral

Person holds chalkboard with 'Exclusions' written on it.

Are there any exclusions?

Yes.  
1) A referral cannot be a referral to another Agent (We don’t pay referral fees to people who refer us to other agents).  The referral fee is strictly for introductions or information about owners of properties that are about to sell or list (that are not represented by other agents) or principals that are considering buying.

2) Any information that’s public is not accepted.  We are looking for insider information.

3) Any information on any deal that is publicly listed is not a referral.

4) A referral cannot be for any property or principal that we already know or are working with.  If you’re unsure if we know someone please ask before providing the referral.

5) We are not interested in “daisy chains” – or referrals of referrals (where multiple parties are referring the same entity).

Are there any exclusions?

1) I have heard that CA Brokers cannot pay referral fees to unlicensed people?

This is a Myth.  

See this excerpt taken from this E&O insurance company (they know!)

“In California, the Bureau of Real Estate and California law permit a licensed real estate brokerage to pay a referral fee for a real estate transaction to a person not licensed by the Bureau of Real Estate, only if the person who is to get such a fee was not soliciting on behalf of the brokerage. In short, this “finder’s fee” only applies if the unlicensed individual is solely limited to the introduction of a seller, buyer or both to a licensee. The caveat is that the “finder” is not involved in any negotiations as to the real estate transaction.

“Likewise, a broker can split a real estate commission with any party… provided that the party receiving the split fees does not perform any services requiring a real estate license.”

In California, a “finder’s exception,” allowing an unlicensed person to be compensated for introducing parties to a real estate transaction, has been judicially approved since 1923. As explained by California’s  Supreme Court in Tyrone v. Kelley (1973) 9 Cal.3d 1.”

2) I am referring the Seller and the Seller is paying 6%, why am I not making 25% of 6%?

In California, it’s customary that a Seller pays the fee to us for finding the buyer of his property and then making sure that his transaction is done legally and ethically.  That means that when we market through our network we offer a sub agent fee to anyone who brings the highest offer.  The sub agent fee is 50% of the total seller paid fee.  Therefore, we are not being paid the buy-side portion, most of the time.  Thus we cannot pay a referral fee on money we’re not receiving.  See the exception above on this page for listings with special criteria.

Is there an agreement?

Yes.  A referral fee agreement will be part of every opportunity and rules apply.  Below is one that you can download, but for each deal, a referral fee agreement will be DocuSigned to the referrer. It’s a standard Referral Fee Agreement and it is submitted to escrow and paid directly at the close of escrow.

We look Forward to Hearing from You.