I think that 25% referral fees between agents is too high.

Sure, during the hey-day when you took ’em out, showed ’em a few houses or took the listing and waited for it to sell and went to the closing, no one complained.  I have always had an issue with a 25% referral fee and have made it my own policy to only ask for 20%, as an incentive to the agent I was referring to.  After all, if you have two referrals, one at 25% and one at 20%, what does human nature lead many to do?

Another thing that lead me to believe that 25% is too high, has been all the out of market agents who had put websites together, fishing for “Hamptons” buyers and sellers – JUST so they could capture them and turn them around and refer them to a Hamptons Agent.  With an average sales price of $1,500,000, that turns into a referral fee of $11,250 JUST for passing on a name – no thanks…

Now, with business being more challenging and both buyers and sellers requiring more time and effort (and expertise) to put a deal together, I am going to be requesting a 10% referral fee. As an Exclusive Buyers Broker, the clients who have listed with me over the years are going to get assistance in finding the absolute best fitting listing agent for their properties, and I want that agent to be motivated to do a bang-up job for them – 10% is fair. 

In addition, I always tell my referral clients that I am getting a fee for referring them – it’s part of transparency and full disclosure, folks. There have been a number of times where buyers or sellers (in the days I was a listing agent) were never told by the agent who referred them to me that they would be getting a referral fee. They JUST made it out like they were doing their relative, friend, etc a favor.

Let’s be open, honest and generous with each other.

What do you think?

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