Referral Fees to Unlicensed Individuals

I am not sure what year this was established but $50 today will not even buy a couple a dinner at Chili’s and when somebody sends me a $1 million referral you would feel pretty silly sending a $50 gift card or a cheap bottle of wine. Maybe the amount should be updated for 2018. It’s been $50.00 for the past 16 years I’ve been licensed.

If someone sends me a referral that I might make $30-40,000 or more the $50 is an insult to the individual that send business to me and probably would never do it again so if its the governments idea to make sure there aren’t many referrals this works real good. Once I get my commission check that’s my money and shouldn’t I be allowed to spend it however I want, this won’t even allow me to send a couple out for a nice dinner which nowadays can easily cost $200-300.

I was always under the impression that a broker could rebate a fee to the buyer of a property. Inasmuch as they are a party to the transaction they need not be licensed.
Does this still apply?

Real-Estate Investors get leads and properties from other investors all the time, what’s the difference?

Real estate investors get leads and properties from each other all the time, what’s the difference?
Every investor is not licensed why would they be, a lead/referral same thing. I don’t get it.
Please explain.

I’ve never questioned the rule, however what is the reason for the dollar limit to an unlicensed referring person? What about an entity, a relocation company? Is a relocation company a real estate licensed (What)?

All these comments that indicate that most have no clue about what the rules are. Where are the sponsoring brokers for these licensees?

Meanwhile, politicians both state and federal are increasingly using their offices to peddle influence with no oversite. while hard working self employed realtors have to follow antiquated rules these fat cats snark at. I agree the rule acts more like a restraint of trade. While we’re discussing silly, let’s put a $50 limit on lobbyists and tie the repeal of that rule to the repeal of this silly $50 limit that applies to Realtors.

What is the difference in paying for leads? That’s a referral isn’t it?

What? How disappointing! This needs to be changed.

I agree!! It needs to be changed. I once had a referral on a new built tell me, that the builder would had given her $500! When I explained that it was a TREC Rule & I could lose my license she didn’t believe me I had to show her in writing. Last I heard from that client!

A referral is defined as “an act of referring someone or something for consultation, review, or further action” The question is whether TREC is concerned about my “Action” after the referral is given, or the result that ends in a commission. As we all know, not all referrals sent my way end in earned income. The ethical question is whether the gift is for the action of another person giving me a lead/referral, or is the gift based on me receiving earned income? I agree with TREC that we as licensed agents can’t share commissions with non-licensed individuals. But what… Read more »

So let me get this right. It’s ok to pay companies like Zillow, websites, etc. a respectable fee for a referral but the non licensed person only gets to receive $50. Embarrassing.

A little history of this rule. TREC had a problem with people setting up “referral” companies without a license. They were acting as real estate companies but calling a commission a “referral” fee. Using the $50 limit in Texas law for gifts to State officials they passed a rule to stop these posers. I was at the several meetings where they needed to stop people from getting around the license requirements but allowing a token thank you for a lead. So you can blame a group of unlicensed people trying to beat the system. Just FYI

An agent posted on Nextdoor yesterday offering to discount her fees including making references to the 6% that all other agents charge and offering to pay a “very generous referral fee” to anyone who referred their friends or family to her. I sent her a private message warning her this is not allowed. She replied that a gift card is allowed. But I question this—especially offering an incentive to get referrals. I give gift cards to people after they refer me someone but do not promote that I will give a gift card if they refer! I sent this to… Read more »

Does anyone know if this applies to Assisted Living Communites?

So I have a question about this… according to what I have read, you can offer a fee to a licensed individual in any amount for a referral. So you can advertise to licensed individuals that you offer referral fees?

You cannot offer a fee to an unlicensed individual and can only give them a gift worth $50 or less after the fact can you advertise that you give gifts worth $50 or less for referrals from unlicensed individuals? Just trying to clarify what I can and cannot say to people who are offering to refer to me.

For clients that haven’t closed yet, I know I can share any amount of my commission at closing no problem (subject to the 2% investor rule, of course), but if that commission share “is made with the expectation of receiving valuable consideration” (per TRELA), is that still allowed?

TREC says the buyer can get any portion of a Realtor’s commission as Rebate. Is the in the case of even when the buyer is unlicensed

“Referral Fees to Unlicensed Individuals.”

Who in their right mind is going to give referrals for only $50?!? That’s a joke!