Thread: How much of a referral fee would you offer for this?

I would offer them 30% or less. You could find a Realtor in the area that has never even sold a house before and offer them a 15% referral. All they have to do is send you some listings, and spend a few hours going through some houses.

As long as you can show them you have a strong buyer that is nearly certain to buy, why would they say no? I personally have sold many houses, but would still be interested in a similar deal, if nothing else to meet some new people and to learn from them.

Maybe that area is much different from the midwest where I live, but it seems that there is an agent just waiting to jump at a chance like that.

I am on the Outer Banks and if I had a family member or friend who wanted me to help them buy a house in Charlotte I would tell them it would be a huge mistake for me to try and help them in an area I am not familiar with.

Now it is your turn.

Watch out for the houses in peril of falling into the ocean, some areas have incredibly high erosion rates.

Houses in COBRA zones do not qualify for FEMA flood insurance. Private flood is very expensive.

Watch out for houses in VE zone. Again expensive flood insurance.

The elevation of the houses has to be considered along with the rental possibilities as some areas are conducive to good rental income while others are not.

At least 50% of the properties on the market right now on the Outer Banks are over priced and will not appraise.

I am sure the other coastal communities have the same issues.

Greg:

You make some excellent points.

We've been vacationing annually in the Outer Banks for the past 25 years. We always rent a 10-12 bedroom beach front home. If that was the type of property they planned on buying I would absolutely advise them to get a local agent for all of the reasons you mention. However, they want a 3BR condo to have exclusively for their personal use.

Having spent much of my life living in high rise condos and coops in the NE I well understand that they have their own set of issues including construction, location and management. The property they are most interested in has 3 units listed for sale. What's not mentioned is that an additional 54 are currently facing foreclosure or short sale which will have a tremendous impact on current value, future condo fees and assessments.

I think one of the biggest minefields to maneuver is price. With current sales (past 3 to 6 months) effectively non-existent, CMA's are essentially worthless. I'm thinking, that to mitigate the absence of valid CMA's, we should get an appraisal prior to making an offer on whichever property they select.

In the end though, if we encounter issues we haven't even begun to consider, I will certainly have the local agent become more involved in the process and increase their fees to be commensurate with their level of participation.

Oddly enough, after having spent so many years going to Duck and Nags Head they've decided to look at a much smaller community even though they've never even been to this town. My personal belief is, that after they visit this town this weekend, they'll eventually decide to look at at a beach front home in the Outer Banks. If I'm right, I will definitely get in touch with you. I'll also step away and let your local knowledge prevail.

Thanks for your insight. It's appreciated.

Originally Posted by Greg

I am on the Outer Banks and if I had a family member or friend who wanted me to help them buy a house in Charlotte I would tell them it would be a huge mistake for me to try and help them in an area I am not familiar with.....I am sure the other coastal communities have the same issues.

Absolutely crystal clear advice

Be vocal but go local

Real estate is a local business

Unless your skills are so exemplary, you market sense so keen, Refer the business for the 25 or 30 % referal.

By all means you are welcome to go shopping with them. To hold their hand and "help" them decide.

Let the referred realtor drive the bus!

I think that you could get someone to happily help you if you gave them 30% so long as you took on most of the responsibility and also wrote the contract. My guess is that your relatives are probably going to select the homes they want to see, so the other realtor does not have to do much work. If you are sure that they are going to buy, might it not be worth joining the association for a year? That said, it is true what the other poster said. Real Estate is local and they would probably be served better by a local agent. I took that position once with some good friends of mine and were horrified when I found that they went and worked with the listing agent. I think the key here is that they have expressed that they definately want you to be their agent. I think that if you have explained the possible downfalls of this, then you can move forward with a good concience. Best of luck.

Originally Posted by nc investor

I'm a broker in Charlotte NC. My sister and brother-in-law are looking for a vacation home in one of the NC coastal communities. They've asked me to be their buyer's agent.

The Realtor Assoc. in this coastal town does not have any reciprocity arrangements with any other NC Realtor Assoc.. The only means to gaining entry to properties is to call each listing agent for a temporary access code. This presents an issue if we see a property that is not on our list of properties to see then we have to hope to reach the listing agent by phone and get an access number.

The other obvious problem is getting comparable sales since I can't get access to their MLS.

I've suggested doing a straight referral to a local agent but they are adamant that they don't want me to hand this off to another Realtor. They want me to get a local broker to go with us just to open the doors.

I did speak with one local agent who told me he would give me a $500 finders fee on a $700,000 sale (the price range they're looking at). I thanked him for his generosity but had to decline.

So my question is what is a fair compensation to a local broker for accompanying us to get us into properties and running a comparable once they decide on a property?

We offer 10-100k for referrals for note buyers. Then again our notes range for 2-229 million. If that is something your interest in email me or pm me.
Contact@dlinv.com

In my area, I would offer 25% at least.

20% - 25% is a normal referral fee in NV.