Commission Vs. Referral Fee

[Sierrah Fanth]

I'm an unlicensed Investor working under a business. If an unlicensed person brings me a buyer for my PA in a wholesale deal ,I can pay them a referral under their BIN or EIN.

However, If a licensed agent requests commission for bringing a buyer to a deal where an agent is already assigned in contract, and we are unwilling to negotiate commission, how can I legally pay her a referral fee for bringing in a buyer?

I am willing to pay a referral fee of 1000.00 Less than commission, yes, but a great deal for just bringing a buyer. An agent said she'd only make like 5 dollars after broker fees...why is she talking about broker fees when I would pay her a straight 1K? And how do I legally pay these fees to agents?

[Chris Martin]

Regarding "An agent said she'd only make like 5 dollars after broker fees...why is she talking about broker fees when I would pay her a straight 1K?" The $1K does not go straight to the agent, rather it is paid to the brokerage company then split up further. The agent's Broker In Charge (or equivalent in your area) gets a "cut" of each deal. Depending on the broker arrangement, each transaction results in a commission split (what she calls her broker fees) between the BIC and the Selling Broker (your agent). So $5 seems like a strange number, but very possible if the BIC has a high split for the first part of commission.