Soaring Referral Fees and Bloodletting....

By
Real Estate Agent with Royal Shell Real Estate Inc BK3025297

Referral Fees that suck your business dry....

 

 

treadmill

I just read a post by an Active Rain Agent who had a client that was moving and a couple of weeks after her interview, she was contacted by the relocation company for a 38% referral.

Guess this is going to be a rant because I feel her pain. In 15 years in this business I have seen referrals climb from 20% to 33% most often in REO World. While I appreciate the business and I recognize that everything costs money, I'm amazed at the 3rd party fee's that continue to sky rocket. At conventions and conferences if anyone complains or even brings up the topic of the soaring costs of referral fees, the moderators are quick to point out that there can not be any discussion so that no one can be accused of price fixing.

Pretty darn convenient....damned if you do....damned if you don't.

The sad part is, if you decline the business, there are 20 people standing in line waiting to jump in your spot. Those 20 agents who are willing to sell out don't realize that there has to be profit figured in to your business model or else you basically have a job and not a business. Meanwhile, those with the overhead, the staff, the software, the infrastructure stay on the treadmill.

Where does it end?

Posted by

Janet Fetterman, Broker Associate, CAM

Sales Manager, Golden Ocala Golf & Equestrian Club

Janet@RoyalShellSales.com

www.GoldenOcala.com

386-299-6393  

 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Marty & Laurie Gale 05/27/2010 09:19 AM
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Show All Comments
Rainmaker
1,447,578
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

So true, why is it OUR commission they have to dip into --- why not the company that is doing the transfer?

May 27, 2010 09:15 AM #2
Rainmaker
358,512
Scott Hayes
(512) 786-8300 - Austin, TX
Realty Austin, Broker Associate

Anything about 33% is best left to a broker imo. By the time an agent pays that sort of referral fee, and pays any split or desk fee, it really is a job- and a low paying one at that.

May 27, 2010 09:44 AM #3
Rainmaker
67,166
Janet Fetterman
Royal Shell Real Estate Inc - Ocala, FL
Selling Luxury Lifestyles...

Michael- I agree!

Joan- Great question-the pie keeps getting smaller.

Scott- Yes it is- I'm with you on this one.

May 27, 2010 02:23 PM #4
Rainmaker
331,032
Andrew Monaghan
Your Phoenix Home Source - Glendale, AZ
CRS, GRI, EPro Associate Broker

Its all a business decision that you as teh business owner has to make, is it worth it, will you get other business and so on

May 30, 2010 03:55 PM #5
Rainer
21,876
Jesse Smith
Smith Realty, Inc. - Winter Park, FL

I agree.  They require everything to be task based for what appears to be "agent babysitting".  However, they keep taking and taking and taking from our commissions so that we have to have very minimal overhead or it could be a money losing business for us.  I, for one, know that I am working myself far too many hours per day/week. 

Sep 28, 2010 07:55 PM #6
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Rainmaker
67,166

Janet Fetterman

Selling Luxury Lifestyles...
Do you know why Estate Homes take so long to sell?
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