A fellow Keller Williams agent refuses to pay my referral commission - help!

A fellow Keller Williams agent refuses to pay my referral commission - help!

Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes

Any other agents out there experience this? I have a signed referral form for a transaction in which I referred a buyer to another KW agent in the Princeton, NJ office. Each office is independently owned. I'm a referral agent and the other agent is a full time realtor.

The other agent and broker signed the referral form a year ago, for a short sale transaction that finally closed. The agent had stopped communicating long ago, and another agent notified me that the property finally closed. Yes, I should have kept closer tabs on this. The agent refused to return calls or emails.

My broker/Team Leader got involved, and after various emails and phone calls, we were told by the other broker that the agent would have to bring my commission money back to her office, and they would forward it to my office. That never happened.

After filing a complaint with the REC against her broker for "failure to supervise", the Princeton office says they have put a lien on the agent's future commissions, should there ever be any, and that's the only way they will reimburse me.

The REC claims this is an issue of contract law and I'll have to follow up with the local Real Estate board.

Anyone ever gone through this before? What is the typical outcome? Any advice to pursue this? The agent also burned the buyer that I referred, but that's for another thread.

Thanks in advance!

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Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
13y
Originally posted by Aly L:
After filing a complaint with the REC against her broker for "failure to supervise", the Princeton office says they have put a lien on the agent's future commissions, should there ever be any, and that's the only way they will reimburse me.

Since it was the Broker who disbursed the commission to the agent but was supposed to FIRST take out your referral fee, I'm having trouble understanding why it's not the Broker you're placing a lien against and going after. Maybe William R. has a better understanding of this since he's a broker (I'm also a licensed agent) and can explain? Thanks in advance.

BTW, I would also pursue this is small claims court (depending on the amount) or take it to regular civil court and go pro se. Again, the Broker would be the primary defendant. This isn't legal advice so consult an attorney.

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  • Contractor · Chicago, IL · Member since 2008 · 56 posts · 8 votes
    13y

    You should be a part of a real estate board if your licensed... you want to contact them and tell them you have a dispute... if your not getting help then you want to contact the licensing department for your state... either way someone will launch an investigation and get an agreement to what will happen to resolve the matter..

    Just to throw it out there, because I'm a KW agent, I've had great experiences with my fellow agents... but it seems like we are recruiting so much we are starting to get some of the trash from other companies :-/

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Thanks William, I plan to make more phone calls tomorrow. The REC did not seem to care about my commission issue or what the other agent did to my buyer. They seem to be a toothless tiger. I'll try the local resources.

    I've had great experiences with other agents, but this one also burned a fellow KW agent, which I didn't know earlier. I've been advising my office agents not to deal with her or that office. I wish someone had advised me of the same :(

  • Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    13y
    Originally posted by Aly L:
    After filing a complaint with the REC against her broker for "failure to supervise", the Princeton office says they have put a lien on the agent's future commissions, should there ever be any, and that's the only way they will reimburse me.

    Since it was the Broker who disbursed the commission to the agent but was supposed to FIRST take out your referral fee, I'm having trouble understanding why it's not the Broker you're placing a lien against and going after. Maybe William R. has a better understanding of this since he's a broker (I'm also a licensed agent) and can explain? Thanks in advance.

    BTW, I would also pursue this is small claims court (depending on the amount) or take it to regular civil court and go pro se. Again, the Broker would be the primary defendant. This isn't legal advice so consult an attorney.

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    13y

    Honestly, I don't know the answer to your question. But, depending on how much the referral fee is, it might be worth talking to a real estate attorney about your options.

    Perhaps you can file a small claims suit against the broker? Perhaps there is some recourse with the KW big-wigs at corporate? Perhaps there are other steps you can take with the REC?

    Regardless, that sucks...sorry...

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    I believe people do not understand the role of most real estate commissions.

    It's to protect the interest of the general public and uphold state license laws.

    It IS NOT to resolve commission or monetary disputes and that is done by going through the legal courts..

    They don't care because they do not govern monetary arrangements.

    If the broker and agent are non-realtors going through the board will not do anything either.How you decide to after them will be based on the amount of money involved here.

    If it is a small amount a letter from your attorney might make them get scared into paying it rather than going to court.

  • Residential Real Estate Broker · Atlanta, GA · Member since 2010 · 122 posts · 32 votes
    13y

    You would need to contact the local board where the other agent belongs to , they would listen to the case and rule either in your favor or not.

  • Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
    13y

    Maybe your KW owner can take it up with their contact at KW corporate?

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Thanks everyone. My KW office has done as much as they can, in regards to phone calls and emails. The other agent did not turn in the referral form when she prepared the closing docs. She claimed she "forgot" to include it.

    When her broker was informed, he told her to bring the money back to their office, for disbursement to mine. She told them twice, and myself once, that she would do so. She never did.

    When I spoke to the REC, they gave me the NJ Statute number for "failure to supervise", stating that would be the claim against her broker for failing to ensure that she handed in the referral form and returned the money.

    I will ask my broker to take it up with KW Corporate, thanks for the suggestion.

    One agent cannot pay another agent a commission referral directly. It has to be done through the brokerage, as my own office gets a cut of my commission. The other issue is that we don't actually know how much the commission is, without seeing the HUD. I only have the other agent's statement of how much it is, about $550. Not a lot in the scheme of things, but she would not have had a closing at all if I hadn't referred the the buyer, who is out $10K on this.

    So far, at least 8 people have been involved in this, and it would have been far simpler and less expensive for the other broker to just pay my office and then go after their own agent for the money. They preferred to burn bridges.

  • Involved In Real Estate · Columbus , OH · Member since 2010 · 68 posts · 23 votes
    13y

    You need to look out for your own best interest. With that in mind…

    Drop it.
    Don’t make one more call or email.
    Don't talk about it.
    Dont allow yourself to even think about it.
    I don’t know where the threshold is that this would be worth pursuing but to me it would be much higher than $550.
    In the time you have/will spend chasing down this money you could help three other clients each of which will pay more than 550.
    The temptation is to say “it’s not the money it’s the principle” but is it really worth the stress.
    Write it off, consider it gone and if it ever does come back it will make your day.
    Move on.

    In my opinion this is the path that would best look after your own interest.

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Shannon, I don't do this full time or even part time, so there are no other clients to take time away from. The money may never be seen again, I understand that, but I would prefer that no other agents go through this. She's burned 2 of us, plus my referred client, and just ignoring it won't make her stop doing that to others.

    In my opinion, helping others avoid her would be in their best interests too.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    "When her broker was informed, he told her to bring the money back to their office, for disbursement to mine. She told them twice, and myself once, that she would do so. She never did."

    So the agent did not inform the broker that there was a referral involved??

    If that is the case it is not the fault of the broker but of that agent.

    Yes a principal broker is responsible for the agent BUT when the broker has a system in place and the agent does not follow that the negligence is on the agent.

    For example if agents make a mistake and procedures were not clearly outlined in the IC agreement and operating and procedures manual then the agent can claim ignorance and the real estate commission can get onto the broker for not having proper procedures in place.

    A head broker can't physically force agents to comply only make demands and then drop their license.

    Now the question becomes do you go after the agent's brokerage and then they go after the agent to recover the money??

    Have you sent that demand letter from your attorney yet?? The amount might have been so small on the sale that the agent has taken the money and ran and you will never see it.

    Sad but many agents out there are like this.

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Hi Joel, that's correct. The agent never handed in the referral form with her closing documentation. The REC at first told me the NJ Statute number that referred to the "failure to supervise", which they originally said would be considered - the broker failed to supervise the agent in submitting the form, and then for not returning the money.

    I can ask my attorney to send a demand letter, but it's likely the agent knows it's not worth paying an attorney to get involved beyond that.
    I .

  • Pacific Palisades, CA · Member since 2012 · 5 posts · 2 votes
    13y

    File a complaint with the NJ DRE, in regards to the KW Broker, and another complaint in regards to the KW agent.
    The broker will be ultimately liable for all things. That is what brokers are for. It does not matter that the agent forgot it, misplaced the document for a while, etc. The broker is ultimately responsible.

    Also, file a complaint with the Realtor board (I'm sure all KW brokers are members, but I may be wrong).

    Good luck.

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Thanks Douglas. Not familiar with the NJ DRE? Do you mean the REC? They responded that this was a commission issue between agents, which they do no mediate. They deal with agent vs. consumer issues.

    I already spoke to my local board as well. The only option is interoffice arbitration. My broker would have to appear at a "tribunal" with the other broker. I'm hoping my broker will make a phone call on my behalf, as it's only been the team leader who has tried to resolve this.

  • David NilesBusiness Member
    Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
    13y

    Aly L I would definitely NOT drop it, it sounds as if all parties involved were licensed agents/brokers so it would go to your board for arbitration dispute. This is what you pay dues for. All parties present their case and paperwork to which the board would rule and indeed DOES have teeth, that is, if the losing party ever wishes to practice licensed real estate again.

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Amazingly enough, the commission check showed up at my broker's office today. No HUD, so the amount needs to be verified, but it actually showed up after 3 months, 8 people involved, the Real Estate Commission, the local Board of Realtors, and enough paperwork to kill a forest. Incredible.

    The squeaky wheel indeed.....

  • David NilesBusiness Member
    Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
    13y
    Originally posted by Aly L:
    Amazingly enough, the commission check showed up at my broker's office today. No HUD, so the amount needs to be verified, but it actually showed up after 3 months, 8 people involved, the Real Estate Commission, the local Board of Realtors, and enough paperwork to kill a forest. Incredible.

    The squeaky wheel indeed.....

    Great to hear! You can bet if your board didnt get involved though, you werent getting anything.

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    My board did not get involved; they simply advised me to have my broker talk to the other broker, or have them do interoffice arbitration. It didn't get to that point.

  • David NilesBusiness Member
    Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
    13y
    Originally posted by Aly L:
    My board did not get involved; they simply advised me to have my broker talk to the other broker, or have them do interoffice arbitration. It didn't get to that point.

    Hey, you got paid, thats the important part. :)

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Not quite yet, but it's getting close! :)

  • Residential Real Estate Broker · Pensacola, FL · Member since 2012 · 221 posts · 49 votes
    13y

    I'm late in on this game, but as a broker/owner I would have sent your referral fee to your broker and handled the charge back to my agent internally. It sounds like this issue took way too long and too much stress to solve.

  • Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
    13y

    Thanks Sandy. I agree, and I will never refer any business to that office again. That's a bridge they burned, and I've shared my experience with other agents in my office.

  • Residential Real Estate Broker · South Plainfield, NJ · Member since 2016 · 2 posts · 0 votes
    10y
    Originally posted by @William R.:

    You should be a part of a real estate board if your licensed... you want to contact them and tell them you have a dispute... if your not getting help then you want to contact the licensing department for your state... either way someone will launch an investigation and get an agreement to what will happen to resolve the matter..

    Just to throw it out there, because I'm a KW agent, I've had great experiences with my fellow agents... but it seems like we are recruiting so much we are starting to get some of the trash from other companies :-/

    The entire premise of being a "referral agent" is that you are not a Realtor which means you are not a member of NAR national association of realtors so can avoid paying those dues, carrying E&O insurance, pay for membership in any MLS or take CE classes because all you do is send referrals. In NJ you are required to be licensed to earn any fee, commission or other valuable consideration.

    Unfortunately the NJ REC just like others protects the public but as far as agent disputes are concerned they really don't get involved. In my experience even if  you can prove they violated state real estate licensing laws in how agents should deal with each other which is unfortunate.

    Any agent sending referrals should have a rock solid referral agreement in place and should deal with collection issues and who will pay those attorney fees, etc. in relation to those collection expenses.

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