Home Buying in 87107>Question Details

Steve Quinta…, Real Estate Pro in Albuquerque, NM

Does your broker get a referral fee from any vendor he asks you to use?

Asked by Steve Quintana, Albuquerque, NM Wed Apr 11, 2012

Some real estate brokers get a referral fee from vendors they ask their clients to use. Here is a recent example:

American Home Shield Corp. has agreed to pay up to $26 million to settle allegations that the company paid illegal kickbacks to real estate brokers and agents to market the company's home warranties. The company denied that the payments it made to real estate brokers who marketed its products violated the Real Estate Settlement Procedures Act (RESPA), and put a positive spin on the settlement, saying it "confirmed the compliancy of the company's new broker compensation practices," called ProConnect, with RESPA.

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Absolutely not. Even if it were legal our team only makes vendor recommendations to tried and true lenders, title companies, contractors etc. We are putting our reputation on the line to make sure our clients get the best service. We are also able to provide loyalty to those vendors by recommending them and that often gets our clients special savings or job priority.

When HMS offered warranty rebates we accumulated those and donated the full amount to a local charity each Christmas. Any agent that recommends vendors on anything other than their merits is doing their clients a disservice.
0 votes Thank Flag Link Wed Apr 11, 2012
They're not supposed to--whether it's home warranty companies, home inspectors, title companies, insurance companies, lenders, etc.

Having said that, there sometimes is common or shared ownership. That's the case where I'm at with the title company, an insurer, and a lender. We as agents are required to disclose this relationship. And, yes, I'm sure our parent company profits if those particular providers are used. However, the agents don't get any sort of referral fee. Most agents strongly encourage their clients to check with other providers. Usually it turns out that the related providers (in the case of the company I'm with) are very price-competitive and give good service. But clients are absolutely free to use whoever they want.

Hope that helps.
0 votes Thank Flag Link Wed Apr 11, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
It is very important to find a reputable Broker. Following the rules is critical in our business.
0 votes Thank Flag Link Wed Apr 11, 2012
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