I've recently had an excellent conversation with one of our fellow REIers that I wanted to post part of as a blog. I'm going to post it in two parts, so keep an eye out for the next piece of the puzzle. This fellow REIer had the following question about partnerships between lenders and agents. REI Member John Doe: "I'm planing to get my real estate license and i was just wondering...If i refer someone to a certain mortgage company would i be able to collect a referal fee from the mortgage company???" My Response: "According to RESPA (Real Estate Settlement Proceedures Act) you are NOT allowed to collect a referral fee. Some people do it, but they're risking their license. One thing, though, is that the broker can give you any gift that has their logo on it because that is marketing, not paying. He could also take you out for a meal because that's also marketing and building business relationships and not actually paying you. But I would never consider giving one of my partnering realtors a check that was in any way real estate related. Some of my referring agents are good friends of mine and I may have to write them a check from time to time to reimburse birthday or wedding gifts that we've split for friends and even then I get nervous because there are so many shady people out there and the gov't is really watching what we do closely. Anyhow, I tend to give my agents more business than they give me. And they make more money on each deal. So I never feel obligated to give them anything. :-) I hope that helps you out. Let me know if I can ever be of assistance to you in the future. Abe" I'm guessing that this will be of at least a small bit of help to most of you and a large bit of help to a few of you. If you're involved in a deal where the loan originator is agreeing to pay money to any of the involved parties, run. The first rule of thumb for us is that we're not allowed to do that. Now, I can give a credit to the buyer against the fees that I'm already charging him. So, for example, my fees are $995. If I want to tell the borrower that I'm sorry I messed up in some way and I'm going to make it up to him by only charging him $595, and personally taking the hit for that other $400, that's ok. But money can't be changing hands. That gets into some mucky waters and it's far too easy to slide down that slippery slope once you start down it. Please comment and grade liberally. I'd love to hear at least something from each person that reads this. God bless you all, Abe

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