Posted by John Merchant on November 11, 2005 at 15:15:24:
If you can provide the Mich agency rule # or statute citation that so states, I’d appreciate it…and so would other with MI situation.
Thanks
Michigan…Illegal to give money 4 referrals?.. - Posted by Peter
Posted by Peter on September 19, 2005 at 14:57:31:
Hi.
I am currently investing in Michigan. I am planning on a new marketing strategy where I would have a referral fee written on my business cards. This referral fee would say something like: “This card can be worth $250. Find out how on the reverse side.” On the back side, I would tell the potential bird dog that I will give them $250 for any lead that they will provide me with once I close on the deal.
Now, I’ve read and heard a lot about this being illegal. I am just an R.E. investor and I am not licensed to be a broker, loan officer, or any other R.E. profession.
My question is, can I do this, is it legal?
Thank you so much for all your help.
Peter
Not illegal to pay it - Posted by William Bronchick
Posted by William Bronchick on September 26, 2005 at 21:22:44:
You don’t need to be licensed as an agent to give referrals, but it may
require a license to GET referrals. Getting a referral fee depends on
your state license laws on finder’s fees. Finder’s fees for referring a
lead is generally ok. If the finder does any pre-negotiating and/or his
fee is contingent upon you closing with the seller, it MAY be
considered a brokerage.
Reality check: who’s going to rat him out to the real estate
commission, you, the investor who got the great lead?
Re: Not illegal to pay it - Posted by Peter Kolat
Posted by Peter Kolat on September 26, 2005 at 21:54:12:
Thanks for your reply Mr. Bronchick.
So, in regards to your response, I can give anyone a finder’s fee for any kind of lead. But, to make the fee contingent upon closing would be illegal, right? Also, can I write that offer on my business card?
Is there a website where I could look up the law for this particular subject in my state, Michigan?
Reality check: who’s going to rat him out to the real estate
commission, you, the investor who got the great lead?
Personally, I wouldn’t rat him out but he might mention it to a wrong person, (just to help them make some extra money) and that person being a disgruntled REA might rat me/him out to the R.E. commission. Just a scenario.
Thank you for your valuable time.
Peter
Re: Not illegal to pay it - Posted by William Bronchick
Posted by William Bronchick on September 26, 2005 at 21:57:49:
No, not illegal to pay a finders fee of any kind. Can be illegal (not
criminal necessarily, but unenforceable) to RECEIVE it.
Re: Not illegal to pay it - Posted by Joe
Posted by Joe on November 11, 2005 at 10:44:49:
I just passed the Michigan Residential Builders Licensing examination. It is illegal for me to give discounts or any other consideration to customers who refer other customers. May be the same for you, I don’t know.