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Ambassador
5,471,316
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Its a racket set up to sell more licenses and more memberships in the Realtors assn.

Oct 25, 2019 09:56 AM
Rainer
124,434
Karen Climer
Demetree School of Real Estate - Orlando, FL
Teaching people to pass the real estate exam

Why is it?  Because the legislators of that state voted on it and made it a law.

I can't speak for all states, but I know in Florida if there's a law, it's because the legislators passed it.

Oct 25, 2019 11:14 AM
Rainmaker
4,145,160
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Is this a theoretical question?  Or something new from the Utah School of Real Estate?  

Oct 25, 2019 09:42 AM
Rainmaker
904,752
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

You talking bird dog fees?

Illegal in AZ and probably most other states.

Talking lead gen companies?

Not necessary if you properly market yourself, do a stellar job, lather rinse repeat. Your praises will be sung by those you do not need to pay.

A time WILL come when YOU, the exceptional, consistently successful agent, really don't need to do a lick of marketing (though you will for your clients) to draw business.

You'll find in time you will turn away or refer more business than you will take.

It will happen!

Oct 25, 2019 09:42 AM
Rainmaker
930,938
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Most state laws prohibit the paying of referral fees to unlicensed persons. Federal law also prohibits this in most cases. This law was spelled out in the Real Estate Settlements and Procedures Act (RESPA), passed by Congress in 1974. It governs many real estate transactions in which the government is involved.

Oct 25, 2019 12:57 PM
Rainmaker
828,152
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

It's a good question. One reason is perhaps to reward those with a license.

Oct 25, 2019 10:56 AM
Rainmaker
855,914
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

The big data lead generators or even an individual "survey taker" don't need to be licensed as a real estate agent or broker, for them to gather (using questions on landing pages and other surveys etc.) and sell real estate leads, they will gladly take your 💰!

To take the real estate sales process further, yes, one would need to be licensed if acting as an agent/broker.

I need to say that my answer does not touch on "Bird Dog" fees, which I could legally pay out as an individual investor, but an agent/broker paying out "Bird Dog" fees...that is an entirely different story!

Oct 25, 2019 09:29 AM
Ambassador
2,633,701
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate Brokered by Real - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Hire an advertising and marketing company and pay them

Oct 25, 2019 12:54 PM
Ambassador
1,768,164
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

It's intended as a level of protection for the consumer, so only trained and licensed people can receive compensation.

Oct 25, 2019 12:53 PM
Rainmaker
5,572,213
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

anyone can promote you.... the more people that promote you, the more business you'll have.... you can't pay an unlicensed person for a real estate lead.... 

 

Oct 25, 2019 01:00 PM
Ambassador
4,610,917
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Because it is the law here and probably many or most other states.

Oct 25, 2019 12:29 PM
Rainmaker
1,395,369
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

It's the law.  I've never questioned it.

Oct 25, 2019 12:23 PM
Rainmaker
4,187,119
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

It's the law.

Oct 25, 2019 12:16 PM
Rainmaker
551,858
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Not sure what the reason was when the law was written, but it is illegal in N

Oct 25, 2019 11:34 AM
Rainmaker
1,930,856
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Because the law says we can't John Henstra . Why would you need to know more than that?

Oct 25, 2019 11:33 AM
Ambassador
3,683,485
Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I don't know the reason, but I have this come up as a possible option in my business once in a while.  Someone that is unlicensed would like to try and generate business for me, so I often wonder how to structure compensation for them.

Oct 25, 2019 11:21 AM
Rainmaker
612,066
Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

I am sure that they can find someone to promise everything...

More than likely, an unlicensed person does not know where to start the marketing.

An unlicensed person is limited in what they can say about real estate to a consumer.

Eve

Oct 25, 2019 09:34 AM
Rainmaker
1,707,423
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Dems da rules.

Oct 25, 2019 03:31 PM
Ambassador
3,294,156
Anna Banana Kruchten CRS, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

Ilegal here in AZ!  Plus an agent doesn't pay fees - all fees are run through a broker and I don't know of any broker that would consider breaking the law for a bird dog fee to an unlicensed person.  Before we pay any referral fees we make sure to have the brokers license as well as the agents license in our broker file.

Oct 25, 2019 03:00 PM
Rainer
139,366
Anthony Kirlew
Group 46:10 Network @ eXp Realty - Gilbert, AZ
Helping You Make Fiscally Sound Choices

Because it is illegal.  If you are asking why is it illegal, it's most likely because there are several laws created to protect all parties of a real estate transaction. Requiring a license obligates anyone involved in marketing real estate to follow all of those laws.

Oct 25, 2019 02:38 PM
Rainmaker
1,731,495
Lyn Sims
Schaumburg, IL
Schaumburg Real Estate Agent Retired

John, you better find the answer to this right away. 

Oct 25, 2019 02:12 PM
Rainmaker
5,006,115
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Hire a person to do this for you.  Better to lead generate on your own.

Nov 01, 2019 01:01 PM
Rainmaker
6,684,474
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

It is a good idea to comply with the laws in your state.

Oct 26, 2019 04:59 PM
Ambassador
3,045,027
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

unlicensed support staff are VERY VERY limited as to what they can do in Georgia.  An unlicensed person cannot discuss a home at ALL with a potential client so I have my unlicensed person take care of paperwork/transaction managment and I take care of potential clients.

Oct 26, 2019 01:31 PM
Ambassador
3,083,638
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

It is the law.  

Oct 26, 2019 10:36 AM
Rainmaker
468,799
Dan Pittsenbarger
Keller Williams Western Realty - Bellingham, WA
Improving Conditions

You can. You just can't make the compensation contingent on closing. It can't be a referral or "masked" referral. Who is saying that you can't? Show me the written law? There tons a marketing companies out there that don't have real estate licenses that charge a fee for there services that gets paid whether or not any actual leads result and whether or not any generated leads close on anything.

Oct 26, 2019 07:43 AM
Rainmaker
2,649,648
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I have taken people to lunch, did favors and remained available to everyone. If someone wants to recommend me they do so. Its all good....

Oct 26, 2019 06:12 AM
Rainmaker
760,050
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

I'm sure each state has their rules about this. From what I hear, it is because they may get into a situation  where they're asked questions only a licensed person should answer. I also agree with Bob Crane - selling a RE license is a business in itself.

Oct 26, 2019 05:56 AM
Rainmaker
3,341,819
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Here in NH they can, they can not write contracts, negotiate an offer or market a home in person. They can make calls, show homes and send out marketing.

Oct 26, 2019 05:22 AM
Rainmaker
4,273,887
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Control and licensing fees are at the heart of the issue!

Oct 26, 2019 05:11 AM