I had a curious request from a friend and colleague the other day. He used to be with us at Century 21 but now works at a very small agency here in Hoboken. He had been working with some buyers and they were very interested in seeing some properties over the weekend but he is going on vacation. After trying to get someone from his own agency to cover for him without success, he asked us if we could possibly do it. He offered to repay the favor going forward.
Normally, properties are listed on the MLS by a seller’s agent and any other agent who brings a buyer splits the commission with the seller’s agent. Sometimes the seller’s agent sells it him or herself and keeps the whole commission. Normally an agent shows properties to buyers and, if the buyer makes a purchase, the agent gets half the total commission.
Occasionally, we agents do what is called a referral. That means I have a buyer who, for example, has given up on Hoboken and wants to look in the ‘burbs’ where I don’t work. I recommend the best agent in Montclair and refer my buyer to that agent in exchange for typically 25% of that agent’s commission. That is my referral fee. Or an agent from NYC may send me a buyer and I pay the Manhattan agent 25% of my commission for the referral.
What my friend was asking me to do was basically the same thing. He would refer his buyer to us for a limited time. For the week while he was on vacation, we would show his buyer some properties and we could have agreed that if they purchased one of the home we showed the buyer, we would earn the commission and my friend would be compensated whatever amount of referral fee we had agreed upon.
Yet in Hoboken real estate circles this is unheard of. No one does it, to my knowledge. I suppose part of the reason is the fear that the buyer will want to keep working with me, for example, and not go back to the referring agent. People are often resistent to change. I think this is one of those situations where no one has done this so it’s assumed it can’t be done. It’s just another referral. It would make life easier. There’s no real reason I know of why it couldn’t or shouldn’t be done. I’d be curious to know what you all think.