Does loyalty to the broker change because an agent's personal property is involved in a sale? This real estate agent needs a gentle reminder about who she works for.
A Florida real estate agent writes:
"I am a licensed active FL real estate agent. I have my home to sell in Massachusetts and I referred my husband to a specific agent. Am I legally entitled to receive a referral fee and not go through my broker here as it is my personal residence? Thank you."
Realty Times responds:
I'm not sure I understand your question. You want a referral fee without reporting it to your broker? Is that it?
Typically, brokers will allow their agents one transaction a year on the house, depending on your arrangement. While it's understandable that you can be confused as to how things work, being an independent contractor and not really an employee, your association with the broker is designed to bring revenues through the brokerage, including referral fees.
You're an independent salesperson and by statute, not able to collect fees for yourself without going through the brokerage. So my question is: How are referral fees usually handled at your brokerage for agents? I'm sure your broker would like the referral fee to pass through the brokerage so he/she can book it as revenue, and would be happy to turn the fee over to you, but that depends on you and your relationship.
But just to be sure, we asked Florida attorney Hank Sorenson for his opinion.
"Chapter 475, Florida Statutes governs how and in what manner brokers may accept commissions," says Sorenson. "Section 475.42(1)(d) states that '[a] sales associate may not collect any money in connection with any real estate brokerage transaction, whether as a commission, deposit, payment, rental, or otherwise, except in the name of the employer and with the express consent of the employer.' Nothing in those statutes exempts personal residences in Florida (much less foreign states) from following those rules."
He suggests, "Although Massachusetts law of the issue would have to be consulted, there may be other methods to accomplish your goals. Instead of pursuing this from a referral fee aspect, you should promote a simple reduction of the list side commission by whatever the referral fee amount would be. The net would be the same and then there would be no concerns about referral payments at all. Another approach would be just to have the reduction credited the seller’s side of the HUD at closing out of the local broker’s commission. If Massachusetts law prohibits any seller credit then the referral fee route may be the only one available. In that event, you should talk to your Florida broker to determine the company’s policy on personal sales."
What worries me about your question is if you have the happy, working relationship you should with your broker. The reason I ask is that usually when someone wants to cut someone else out of something it's because the relationship has no value. Maybe it's time to have a sit down with your broker about expectations. Explore what you need to help you bring in more business with his/her help. It's not easy to start over in a new state, but there have to be better ways than saving a few dollars off your broker.