When it sounds too good to be true, it probably is.
Many businesses that are “Peripheral” to the real estate sales industry want a piece of our action.
After all, we real estate sales professionals handle the largest transactions of most peoples’ lives, and while doing so build deep relationships with our clients.
We have a perceived influence over our client’s decisions.
To some degree, this is true.
My clients are House Buyers and Sellers who frequently rely on me to refer reputable and reliable products and services to support them during the transaction and for years after they close as they maintain and improve their homes.
So . . .
Just as Pharmaceutical Reps call on Doctors, House Service providers call on REALTORS to solicit referrals of their clients . . .
Alarm companies, contractors, roofers, cable and internet providers etc.
Virtually every time we close a house these days, we get a call from a vendor or 2 asking us to connect them with our clients and many offer us a reward.
On the surface, this sounds innocent enough if only we weren’t subject to this pesky little Federal Act – RESPA – Real Estate Settlement Procedures Act – which effectively makes it extremely difficult to make “Kick-backs” and “rewards” happen legally.
In other words, it’s probably AGAINST THE LAW for a REALTOR to accept financial consideration for referring a vendor to a client.
Some folks might “justify” this with “Full Disclosure to all parties to the transaction,” which gives me pause.
Why risk it?
What if something goes awry with the vendor’s product or service?
What if that vendor screws the client and leaves them hanging?
Who is that client going to expect to fix the problem?
Yep! They’ll call the person who got paid to refer that vendor and will expect to be satisfied.
My message to ALL Real Estate Sales Pros is: “Any time you get a call or contact from a company offering you money or referral fees, please run it past your Principal Broker before you do it – Lots of these vendors ignore the Law and it is OUR responsibility to KNOW the law and keep ourselves and our businesses on the right side of the law.
While I’m at it, all of the above may also apply to internet based “Lead Selling Companies” who might just violate the law on your behalf.
Your License to sell real estate is on the line when shady practices like this happen . . . that’s your livelihood and your reputation.
It’s veritable “TRUST DESTRUCTION” with the client.
Here at Pareto Realty, we stay on the “High Road” . . . ALWAYS!
Our “Vital Few” Real Estate Sales Professionals are ALWAYS in tune with the best practices that matter . . . the 20%
When in doubt, we err on the side of caution and trust.
Keep it safe out there . . .