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Steele Propp Licensed Real Estate Agent,  Minneapolis,  MN

Date: February 2, 2008

This seems that it would definitely defy RESP’s  section about

 (a)Business referrals.  No person shall give and no person shall accept any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.

Our broker had the company lawyer speak to the agents about this and he indicated that as agents, we are not to give or get anything to induce a client to buy or sell their home.  We are not to give anything for referrals from other people also. Fines can be up to $10,000 or imprisoned for not more than one year, or both.

Unfortunately this has nothing to do with RESPA.  That deals with mortgages not real estate transactions.  Just because there is a mortgage in the transaction doesn't mean RESPA covers the real estate agents.  This regards lenders and title companies.  It will only involve you as a licensee or company if you are taking "bribes" of one sort or another from lenders or title companies.

However, along a similar line there are some places where giving a "kickback" or "referral fee" to unlicensed people is illegal under the state real estate statutes.  In Minnesota the exception is for principals to the transaction.  I can't pay someone who is unlicensed for leads but I can pay any amount of my fees to either party to the transaction.  Even the one who is not my client (full disclosure, of course).

As always, check your own state statutes.  It seems most have this exception for principals.

But as to RESPA, your broker is way off base as is your company attorney.  Not uncommon.  This prohibition is regularly misread by real estate people and attorneys.  Just had a course taught by an attorney that regularly works on RESPA violations.  Said it was one of the most misunderstood areas out there.

Sorry.

 
Steele

Steele V. Propp
Foreclosure Specialist/ Loss Mitigator
Bank Owned Property Division
Schatz Group GMAC Real Estate
1009 Mainstreet
Minneapolis, MN  55343
(612) 325-6764 Direct Line/Cell
(952) 938-2593 Office
(952) 938-3831 Fax
mailto:SteeleP@aol.com

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Paula Bean Licensed Real Estate Agent,  Orlando,  FL

Date: February 2, 2008

Whether it is an A16 violation or ethics violation or not, it is VERY bad business. I market my listings to REALTORS because that is predominantly where you get your sales. I put high co-brokes, I do my job, I thank them profusely. I tell their clients how lucky they are to have them as their agent, I'll help with whatever I have to do if the BA can't do it, and they trust me because they know that I won't try to steal their clients. Not only that, but I've had some of their clients call me and ask 'if I use you, can I get a better deal since you have the listing?" My answer is always NO. Then I call the BA and tell them what they did. One of these guys was supposedly a good friend too. What goes around, comes around. This results in more showings of my listings because I've built up a reputation with the highest number of people that can help me move properties in less DOM. The 'one time shot' buyer that you double dip is not worth the money you will lose by getting a bad reputation with the agents in your area. Not to mention that it's a tacky and unprofessional way to get business. Use me, not because I'm good but I'll pay you? lol. yeah, that would be the agent I would want to use to help me with one of the biggest investments of my life. >>>I had a student ask me a question the other day that has me thinking, and I'd like other input on it. As a buyer's agent, she went to show a listing in the MLS, listed through another company. It was a scheduled appointment (listing agent knew she and her client would be going through the house). Throughout the house were, for lack of a better term, 'ads' promoting the use of the listing agent as a buyer, e.g. "Buy through Agent X and receive up to $10,000 in benefits!" "Buy though Agent X and get a free home inspection!" All of the information indicated that these benefits were available only if the buyer uses Agent X. She asked: isn't this a violation of Article 16--I'm in there with my client, and the listing agent is trying to entice my client to dump me and go with him...so..what do you guys think?
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