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This one's interesting.

Last year I had a referral from an out of state agent.  The buyer client purchased 2 homes (an investor).  I sent her a referral fee for both even though she didn't ask for it (on the 2nd purchase). 

However, you are keeping in touch with the client and this agent hasn't.

I would say one bite is plentiful in this situation.

Richard, I am not sure that there is anything that says that you would owe the other agent anything.

I usually release an agent from any future obligations on a referral. I cant expect future income off your work and follow up.

Hi Rich:

If I'm understanding the situation, the agent referred these people to you five years ago...Well, my vote is, NO, you do not owe this agent another referral.

I have run into this recently.  I sold a referred buyer a home about 7 years ago.  When I went to list their property, they actually told me that there is no need to give the previous referring agent (who in this case, was his Aunt), any referral at this point...

Rich, I have to agree with the others who said after 5 years and you have kept in touch you do not owe anyone anything further.  Had you not kept in touch and the original referring agent re-referred you then it may be a different story.

Richard...

I agree with others here. As the Agent in question discontinued contact the entire apple belongs to you. Unless of course you'd like to give me a bite :)

TLW...ROAR!

Neither legally nor morally do you own the agent a bite. Would be a different story if that agent had called you about selling this gent's current home.

The very fact that you asked shows your integrity...

I've been in this situation a number of times, and I guess my answer is "it depends".  Technically speaking, I would have to say "no" - not after five years and the client has become yours through the combination of a successful transaction, years of follow-up, and his/her direct contact to you for new business.  But - and there is one - if the agent is an ongoing source of referrals for you or the client is related to the referring agent, I might go ahead and pay a referral fee.  I've followed both routes in the past.

Richard, unless you had a pre-arranged agreement, I would think you do not owe the agent a referral.

It's like when you have a contract to represent a buyer. Once the house closes your duty is over, unless you want to email, postcard, or personally contact them for referrals. Un less you have an ongoing relationship with the original referring Realtor, I think the first compensation is enough. I wouldn't expect another referral fee if it was me.

Kris, Of course, you did the right thing.

Don, I know you won't find it anywhere but there's always "unwritten" rules.

Laura, This was a really informal agreement. Your way is better.

Toula, Funny that you just ran into a similar situation.

Richard, once you have sold the home the client becomes yours ( if they so choose )and no second referral fee is needed. I have never heard of the referring agent to expect a second referral fee?

Gail, Thanks. So far, that seems like the general concensus.

TLW, I thought Eve convinced Adam to take the bite.

Irene, Thanks, I really appreciate that comment.

Margaret, Good read. In this case no further referrals. This client came in on their website and they didn't want to deal with him.

We usually only pay on the first transaction.  If they call each time their customer/family/friend is ready to do another transaction, ie.- buy a second property, or sell the one you sold them, then you could pay them.  If you stay in touch and have your own relationship with them then you have earned them as a client of your own.  You have already paid them the referral for the name the first time.  That is, after all, what a referral really is, paying for a name. 

Mike, Very informal, no pre-arranged agreement here.

Joe, Thanks. Seems to be the prevailing attitude.

Missy, I've never heard of it either but you never know.

If the referral is a close friend or family member of the agent I think you should pay each time.

I think the majority answer is that you do not legally owe anything to the agent. I probably would not pay a regular referral either.

I MIGHT however consider a restaurant gift card or some such thing just to say thanks...but realize that at this point, it's a personal integrity call on how you feel.  As others have said it shows integrity to even ask.

I agree with those above - unless the seller requests the referral ...... and it doesn't sound like he will... You've earned his business - he has certainly met many other real estate agents by now, but he called you!

Rich...

Most of our referral forms specify the longevity and scope for a referral. If it's an investor, I usually like to get fees on every purchase, if it's a homeowner, I generally only expect the fee for the specific transaction.

I do think that it is important to clear this up front, though!

You fulfilled your obligation in the original transaction. There is no "reserve clause" or residual right to a fee afterward in my view. This is especially the case now that you've kept in touch and the other agent hasn't. 

Richard I used to do a radio show in South Florida with a great guy . Our deal was anybody that bought I paid a 25 percent referral fee. Any one they sent me or if they sold That was my end of the deal and no fee was due. I have since done other deals and never paid the second time around. Nor would I expect it

Rich, I agree with the others. No referral fee in this situation.  I use to be with your company and if I remember correctly, the Policy & Procedures say something like 18 months.  So if you are both with L&F, the the P&P would cover it. I left a few years ago, so the P&P could have changed. ~jen

Generally we pay the agent once. However If the agent is a producing agent with lots of leads that could come your way keep him happy and send him/her the money !!! Show me the money baby

I agree with everyone else, ONE referral I believe is standard, especially if the other agent hasn't kept in touch.

In my hardly ever humble opinion one referral equals one referral fee.

If you did a good job and the referred party wants to do business with you in the future I don't see paying any referral fee to the original referring agent.

Richard we agree with the others also. Just one bite unless otherwise stated up front...... We had a referral 10 years, but the client never acted (as in listed), Last week she called and wants to sell. We will find that Agent and still pay a referral though.  

Absolutely not.  You are under no obligation to pay the initial referring agent though sending a thank you card with a small gift card would not be out of the question.

Even if somehow the 1st agent had gotten wind of your clients impending move, I would resist in paying a fee, especially if the buyer has contacted you to discuss the move.  That is the main reason why we maintain contact with our clients, for their friendship and future business.

The fact the buyer contacted you means you did everything right and this is the pay-off.  Congrats!  keep up the good work.

Richard - the apple is yours to chomp. Can't add anything over and above what has been said.

Jeff

Richard - This has happened to us numerous times.  It's because of two factors: 1) the referring agent has lost touch with the person and 2) you haven't and they consider you their Realtor!  Unless you've signed a referral agreement which asks for referral fees for all subsequent purchases for that buyer, you have no duty to even contact the original referring agent.  As for multiple purchase referral agreements, I have had agents refer investors to me with the understanding that there would be multiple transactions which would have a referral fee.  I'll agree to this, but there has to be a time limitation, since I wouldn't want to chase the referring agent down after 10 years.  Once again, however, if the referring agent stays in touch with the investor and initiates a new request for a referral, even after 10 years, I think you should agree.

The good thing for you is that you're doing something right!  You're treating people well, so you have customers who are coming back to you.

My .02 - Just one referral fee.

5 years and no follow up. No No No.  You are the one who's been in contact with the client and the client thinks of you as their agent.

HELLO RICHARD!  Woo hoo - it's nice to see you as a feature!!  To answer - I don't think there is any written thing you must do.  I follow karma and would probably let him/her have another bite! -- Gabrielle

I agree with the others' comments above.  If I were the original agent, I don't think I would expect a piece of the apple when the original was offered up so long ago.  It would be different if the other agent were still working with this client.  But since they're not, I say the apple is all yours, Richard!

The apple is all yours at this point as you have converted this person into "Your Client" through your own effort.

Ditto , I agree no fee, agent's in general do not do a good job  f/up their past clients ! 

Just one referral fee. The referral fee is a one time deal.

The buyer chose to remain in contact with YOU...called YOU...we sometimes send the other agent a gift card, cheese box, etc...required...not...nice.. u bet.

Hi Richard

I would have to say no referral fee is due with the new business.

Good luck and success.

Lou Ludwig

I would think that after following up for 5 yrs you can consider this client "yours" if they do... and they do.

I always get my referrals in writing, there are times I make a referral asking for more than one fee.  Here is the situation and how I make it work for me and the other agent.  I have many investor clients and sometimes they refer others investor clients outside my area....so when we already know for sure they will be buying several properties I ask for a 15% on the first and 2nd transactions, 10% on the next 2 and 5% on subsequent.  I think this is more than fair since it will be an ongoing source of income for this agent if they take good care of the client.

I have to say No. The other agent didn't keep in contact with the client.  I think you are being really nice.  I am going to say to bad. I also do get my referrals in writing so just in case they is no conflcit.

Ben

If you've not put it in writing that you have a referral agreement in place, then don't worry about it.  There is nothing implied about anything. You got a referral for a buyer, he bought, you honored your verbal referral fee agreement.  Now this person wants you to list the home . . . even the statute of limitations in my state is 2 years!  There's NOTHING that you owe to the referring agent. End of story. 

I think the 1 referral fee is fair.

I certainly wouldn't expect anything beyond the initial referral if I were on the other side.

The standard referral agreements our MLS uses include a time frame. If the blank spot for the time frame is not filled in, the default goes to 18 months. After that time, any commission for transaction that closes with that client does not need to be shared with the referring agent.

Hi Rich...I've read the consensus and agree with the others that you should not be expected to pay another referral.  Have you been approached or are you just thinking ahead?

Rich: Years ago I worked as a Buyer rep for a small custom home builder who was also an agent. I was okay with his payment scale for the homes he built ..., and I was okay with paying him a very generous referral fee for listing the homes for his Buyers. Where we parted company, however, was when he insisted that I continue to pay him referral fees when his "first time buyers" became sellers ... and when he insisted that I also pay him referral fees for the relatives of his buyers that decided to either buy or sell. Like your situation, the home builder/agent never stayed in contact with his buyers once his warranty period was over.

The industry would be a lot better off if there were more agents like you out there.   The fact that you're even considering paying a second referral fee without being asked is tremendous.  I would agree with most everyone else that said you shouldn't have to pay one though.  However, if the agent is someone that you believe could potentially send you more business, you might want to send him or her a little something just as a reminder that you're always open to their referrals.

Richard, even more important that the agent keeping up with the client, has the agent kept up with you?  If this referral was a one-night stand, it's one thing.  If, on the other hand, the agent has sent you other business over the years, I'd probably send another referral fee.  

Richard - I think that you've established your own relationship with this client and no further compensation is due to the referring agent.

Hi Richard,

It says good thing about you that you would take the time to consider this and put it out as a discussion item. Like the others, I see a referral as a one-time thing.

I don't think you need to pay the other agent. One referral is one (1) referral. Check with your broker.

Patricia Aulson/portsmouth nh

Interestingly enough, this situation came up in one of the offices I used to work in...and continued after I left.  The agent who referred to another agent is suing the agent she referred to for commissions on several properties.  She couldn't handle it...handed it off for a referral, and after years still wants part of the apple.  My impression is in your circumstance...one bite is quite enough since you've cultivated the fruit. 

I think in this situation, one bite is plenty.  Most of the agreements I've made have been in writing and for one year.  Additionally, the client came to you directly 5 years later.

You must be a very nice person and go well beyond ethical high standards to even think you might owe any more... we have always believed a referral is a one time thing... you don't own people but you can win them over with your service... you have no worries on this ...

From the desk of David Dee,

Another one bites the dust. Since you've taken the proper diligence to maintain contact with the buyer, my opinion would be no commission referral here the 2nd time around. I know of similar situations and that has been the outcome from agents I've spoken with in the past.

Thanks everyone for your comments. It's pretty overwhelming for one bite being enough. Not 100% but pretty close. Have a great day!

Rich

First one only :-) Since you've stayed in touch, they are officially your client now.

Since you have your answer.. pretty much a consensus here, I would like to say "what a great title and graphic to go along with your featured post"

This isn't a bite, it is more like a slap of the hands. OR shame on the other agent. In my book you don't owe the referring agent anything. Real estate is a relationship business and everybody knows that if they want to continue building relationships with their clients, whether they are past, present or future, they MUST stay in contact with them or the client takes a hike.