I'd like to know what everyone feels is a practical referral fee for short sale listings?

I belong to Broker Agent Social and the fee is a standard 30% of the listing side, (less out of pocket costs).

I'm starting a new marketing campaign here in Central Calif (The Valley), and it will be generalized enough to apply to other areas, once it's rolling.

I could have a lot of referrals to give out if it works! (I've tried other dream machines for marketing and some work and some don't, so I don't want to start cheering yet).

I would also have marketing, negotiation and listing tips that have been developed over the years for short sales.

I first worked with short sales in 1991. I worked with the team that invented them thru computer modeling for a Sacramento bank that was losing buckets of money. I was their rep in the Fresno area. So I know of what I speak.

My last question is more technical. Is there any prohibition on giving referral fees to licensed agents in states where I am not licensed? It's important to not break any state or federal laws, in a rush to help someone.

Please comment on my questions or share other ideas.

 

Vic Pasnick, Realtor,

Fresno Association of Realtors,

Broker for A La Carte Properties

vicpasnick@hotmail.com 

 

Views: 115

Replies to This Discussion

Hey Vic,
There could be an odd ball state somewhere but I believe it is universal that realtors can offer and recieve referal fees from any state to state.
Andy
Around here and other places I know of, the standard referral fee is 25%. Period.

Additionally as far as I know as long as the referral comes from a licensed agent/broker there should not be a problem in passing along a referral. The only thing that is required is a W-9 for the company you work for to receive the referral.
Hi Vic,
I am a Broker in Central Massachusetts and to my knowledge there are no prohibitions on paying referral fees as long as the fee is payed through the Brokerage company that the agent is a member even if they are themselves brokers but working under another's broker license. My office will gladly pay a 30% referral and help any client that you reffer to us. Thank you.
Maybe we should be charging more... LOL...

But seriously, I know most asset management companies will charge 1% on REO listings, and there are some out there that charge 30%. The good thing about listings, as I'm sure many of you know, is that they will also yield buyer leads and buyer sales as well. Either way, 25% is fair, I've always felt it is and will always keep it that way.
Well here is what Vic said - 30% less out of pocket expenses.

While I have to keep track of my costs for IRS purposes, I don't want to justify what I am spending to an agent that I have a referral to/or from. They may not like what I am spending. If I spend more to get a particular property sold - due to some unique feature, location or condition. So then they get less money and then complain when they only net say 15% because my carrying costs were more. Nope don't want to go there.

So, I like flat referral fees of 25%
Thanks all. I guess the bottom line is that what goes around comes around, since referral fees work both ways. The consensus seems to be 25%. Now to certify that it's legal, to pay outside of the licensee's state, THEN.... try to get the marketing going so there is actually something to refer to other areas!!

Vic
You can absolutely pay referral fees to agents/agencies in other states. We do it all the time.
It looks like 25% is the winning bid. I've had a delay in building the new short sale web site, as my designer, a retired engineer, has had to resign to focus on his health. Is there any "canned" or semi-canned customizable site(s) available drectly for short sales?
I have another question. Is anyone having success with the $3000 relo money that is supposed to come from HAFA? I've gotten uphill static from banks, and so far only one client has actually scored the $3000.

Vic, The Short Sale Specialist Network is based around referring listings to agents in other states for a Referral fee!  As far as HAFA goes, I've only gotten that money once or twice, I have gotten less than that on several occasions.  I think ALL lenders should do that regardless on owner occupied homes, as they wind up paying $3,000 in cash for keys deals after they foreclose. 

 

Take it from somebody who knows, generating short sale business across the country is no easy and inexpensive task.  I spend 3X as much as I did two years ago to produce the same amount of referrals.  It is WAY to competitive now unfortunately.  One of the reasons why we are gearing up to start working directly with lenders.

Mike- I have a potential referral in Patterson CA. It's about 100 miles away, and if I can find a short sale specialist, I'll refer it when the time comes. They have been turned down for a mod, but are trying again, and will probably need a short sale. How do we use this network to cross reference agents?

Vic

Hi, Vic, I service the Madera, Fresno, Tulare and Kings Counties, as probably you do too.   If you have a referral in these areas I will be glad to take it for 30% minus expenses, but would rather take it for a flat 25% for your financial sake, considering the economy in the central valley. Call 559-360-4940 or pafrealtor@yahoo.com

Hi,

I need to refer a short sale specialist in the Boise Idaho area.  If you're good, please let me know!

 

Thanks, Rob

 

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Discussion Forum

Short Sale Marketing and Referrals

Started by Victor Pasnick. Last reply by TOP END Properties Jan 2, 2013. 13 Replies

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