Can an Architect pay a referral fee to Realtor for sending him clients?

  • September 12 2011 - Osprey
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Answers (9)

It should be different from state to state regarding violation, and I thing it should be all right as long as it did not create a conflict of interest between both parties.
  • June 08 2012
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Profile picture for sunnyview
Please explain how it would be a RESPA violation. Agents pay other agents for referrals all the time, so I don't understand why another professional can't pay if it does not touch the lender side. 
 
What about if the house is already sold or not listed by the agent that is making the referral? That would have nothing to do with a sale at all. Could you pay for a referral then?
  • September 16 2011
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Profile picture for PukonYukon
pretending there is no mortgage or closing.  or that you aren't even building a NEW house but would be redoing/changing an existing home that the person now owns.

the question would be whether or not the agent can accept the fee.  - contact the local board to ask.    what if a realtor sent a client to a carpet cleaner- could they accept a fee from them?
and then is there a architecture organization that prohibits you from paying referral fees to people?  (doubtful).

safe thing to do might be to send them customers.


  • September 16 2011
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It is a RESPA violation clear and simple, read the Dodd-Frank Act.
This issue has come up already for Home warrenty companies that pay a referral fee. While one would think it is not related, the givernment considers it a violation, and architect would be no different.
  • September 13 2011
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The question posted has nothing to do with a closing of a federally regulated mortgage or RESPA laws.
  • September 13 2011
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Profile picture for wetdawgs
@Lucy:  How is an architect referral related to loan closing?
  • September 13 2011
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Section 8 of the Federal RESPA laws prohibits anyone from giving or receiving a fee, kickback or anything of value in exchange for referrals for services relating to the settlement (or "closing") of a federally regulated mortgage loan (i.e., most mortgages). In my experience and understanding of RESPA law, ANY referral to homebuyer or seller clients (IF the referrer is not a licensed real estate broker/salesperson) - in which the clients or the folks they're selling to have a mortgage from a lender that's federally regulated - appears to be explicitly prohibited. Violations of RESPA law are subject to civil and criminal penalties. Big red flag!!
  • September 13 2011
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Profile picture for Connie Klemme
probably the best source would be to contact the local board to ask if it's against their rules and then contact the state commission or department to make sure it's not against the law (mls rules and laws...not same thing)
because while it would see to many of us (and many in your area) that it should be OK, it could very well be and no one has bothered to read all that fine print- but you can be sure whoever it is at the MLS that is charged with enforcing rules will know and same thing at the state commission/department.

this probably isn't one of those places where forgiveness is better than permission.   Two phone calls should have a definitive answer for you.
  • September 12 2011
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Profile picture for sunnyview
Good question. Since I have seen that happen in my area first hand, I would tentatively say yes. I know that there are restrictions on lenders, but I haven't heard of any formal restrictions on agents receiving referral fees. I would think that as long as it was not prohibited by law or their RE Board, it would be ok as long as it did not create a conflict of interest.
  • September 12 2011
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