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Barrister, Attorney
Category: Legal
Satisfied Customers: 37098
Experience:  16 yrs practice, Civil, Criminal, Domestic, Realtor, Landlord 26 yrs
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Regarding Referral Fees for services rendered. We are a Real

Resolved Question:

Regarding Referral Fees for services rendered.
We are a Real Estate Investment Co with a licensed Broker in house.

To help facilitate our property sales, we are assisting our clients by referring them to Credit Repair Agencies.
We will also act as a mediator between our client and the Credit Repair Agency to ensure the process is complete.


Can we legally charge a small fee to the client for our assistance/service?


Submitted: 6 years ago.
Category: Legal
Expert:  Barrister replied 6 years ago.
Legally no. Under RESPA rules, for a transaction involving one-to-four residential units with a federally related mortgage loan, a real estate agent cannot either give or receive referral fees. More specifically, the statutory language provides that “no person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person” (12 U.S.C. § 2607(a) also commonly known as Section 8(a)).
A “referral” includes “any oral or written action directed to a person which has the effect of affirmatively influencing the selection by any person of a provider of a settlement service or business incident” thereto (24 C.F.R. § 3400.14(f)(1)). A referral “also occurs whenever a person paying for a settlement service or business incident thereto is required to use . . . a particular provider of a settlement service or business incident thereto” (24 C.F.R. § 3400(f)(2)).


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