Blanket out of country referrals - any thoughts?

[southernbc]

Hello all, I have recently been approached by a realtor (who seems to be legitimate) from Florida. Offerring 5% referrals (paid by the developer on ground breaking) for customers I refer, if they end up buying in the luxury condominium where he is trying to sell. I was hoping if there is any with experience with this type of finders fee/referral that you might share some of your experiences with me.

I have checked online deep enough that I think the Realtor in question is acting in good faith, but I have concerns as to the type of transaction as well as the legal risk/obligations which may attach. Any of you old dogs out there ever run into this before? I have asked my broker and she is going over the facts, but has not seen this type of thing before, it does not hurt to seek out experienced information in any case.

The summary is: The Realtor in question contacted me by phone requesting the right to email me some information. He indicated this was not a general cattle call but I had been chosen from my standings within Coldwell Banker as well as my independant internet presence and that I would be the only realtor offerred this opportunity within my office if I accept. If I understood that statement properly, I think he has contacted a multitude of brokerages offering this "opportunity" to one Realtor in each office.

Is there any potential pittfalls to this kind of referral which I should become aware of?
Thanks in advance for your insightful comments.

Have a Great Day!
Don Mann

[ericbramlett]

I'm not an "old dog" but I would think there's nothing to lose as long as you have everything in writing ahead of time. Is that 5% of total commission or 5% of purchase price? If it's 5% of purchase price, I'd think it sounds a little too good to be true. 5% of total commission sounds pretty light.

[southernbc]

It is supposed to be 5% of the total purchase price BUT I am afraid of invoking agency obligations in a deal where |I have no specific knowledge.

[Bob Crain]

This is new construction. 5% is not that uncommon and there is almost no paperwork for you to do. You need to have a written referral fee agreement signed by him and the developer before your clients sign their purchase contract.

In California, most builders require a registration form to be signed when YOU show up at the model homes WITH your clients. Make sure that this company doesn't have the same requirement. If they do then Get it in writing that you do not need to be with your prospects the first time they show up.

[Benjamin Dona]

Great advice SD!

This is very common here in Florida. Many developer/builders are offering up to 7% in order to try and move excess inventory.

Don, just be sure your referral is signed by the developer/builder/broker (the person who is actually going to pay you the referral fee) and not just the agent. Then just like SD said, get the registration situation in writing too. It's a sticking point with many developer/builders here and you'll want to make sure there is no confusion on that issue.

[southernbc]

Thanks for the input I will make sure I follow your advice if the opportunity arises.

Are you aware if there is rules governing advertising of this type of transaction "by the referree" as in posting on my website.