Posted by Rick E.TX on January 10, 2003 at 20:54:53:
I spoke to an agent that is looking for houses for her buyers. In trying to find out how we could both make money helping these people, she told me that the law allows her to give no more than $50.00 for the lead/referral. I’m not convinced that she is right. I know that beginners are often directed to do bird-dogging to get started and I believe this is what I am trying to do for her.
Maybe there’s a vague detail I’m missing. Or maybe she doesn’t really know what she’s talking about.
I don’t know the laws in Tx but I can tell you in Ga as an agent I can not pay anyone any fee for finding properties for me. My broker can only pay other licensed real estate brokers a fee for finding properties. What you can do though is find a property, get an option to buy it, then if the agent’s buyers like it excerise your option and flip it to the buyers.
that agent is absolutely correct…(assuming the agent is in texas as well) a licensed salesperson or broker may not compensate a non-licensee with a gift of more than $50 value for leads or referrals…
it’s in the texas real estate licensing act.
(2) “Real estate broker” means a person who, for another person and for a fee, commission, or other valuable consideration, or with the intention or in the expectation or on the promise of receiving or collecting a fee, commission, or other valuable consideration from another person:
(I) procures or assists in the procuring of prospects for the purpose of effecting the sale, exchange, lease, or rental of real estate; or
(J) procures or assists in the procuring of properties for the purpose of effecting the sale, exchange, lease, or rental of real estate.
to do either of these things , a person must be a licensee.
direct compensation of $50 is not even authorized , but an appreciative gift of not more than $50 in value has been deemed to not be “Compensation” by the big brains that make and interpret the law.
Zack, I’m in GA and received a lead from an agent. She said “don’t worry about me, help the seller”. When I close this deal, what is a reasonable referral fee. I would like to compensate her in some way.
Are there rules about Agents taking fees from an investor? Sort of like the corporation ethics of “candy or other edibles is an acceptable gift, but something expensive is a bribe”
You can pay her as much as you like as long as you disclose it in the contract(probably need an addendum if you already have a contract signed)and show it on the closing statement. The attorney MUST make the check out to her broker and not the agent directly, but as long as you do those things, you can pay her as much as you want.