Profile picture for 8266Fountain

Is it common for a referral fee to be paid to the buyer out of escrow who then pays it to the agent.

A friend who is a licensed agent for whom I arranged to receive a referral fee on a Real Estate transaction in which I am the buyer is now requesting that I ask the primary agent/broker who is representing me in the transacation that I receive the referral fee out of escrow into my name and then pay my agent friend the fee. He says this is common practice. I say it's not, it's cutting out his Broker out of a share of the referral fee and therefore its illegal. Who's right?
  • November 14 2013 - Los Angeles
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (7)

Profile picture for CraigWhite1
The referral fee should go directly from escrow to your friends broker. It's NOT common practice for any buyer or seller to pay a referral fee to any agent out of their pocket. That's cutting the broker out of their % .
  • January 02 2014
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Technically, referral fees are paid through escrow from one broker to another broker and then to the agent.  
  • December 06 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Simple answer. You are right. Any referral fee must go to the agent's broker, not to the agent.
  • November 15 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

An agent can give some of their commission as a concession back to THEIR buyer, but not outside of the transaction. Agents cannot pay someone or give a kickback for a referral to anyone that is not an agent or recieve a fee from another affiliate for the business. Agents can send another agent a referral and get the "referral fee" IF they complete a transaction.
  • November 15 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I believe that finders fees can be included in the HUD-1 and as long as this fee is not going to the borrowers name.  Everything should be legal, as long as it is disclosed and shown in the HUD-1.
  • November 15 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

If you don't have a RE license I don't think that you can receive any fee at all --- please check the BRE website.
  • November 15 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

All Commissions (referral fees) must go to the Agents Broker.
  • November 15 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.