David Saks: Kick Backs & Referral Fees : Are They Good ? Are They Bad ?

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Kick Backs & Referral Fees : Are They Good ? Are They Bad ?


Kickbacks and referral fees:

Are they good ?

Are they bad ?

What are your experiences with them ?

RESPA, the Real Estate Settlement Procedures Act, prohibits the payment of kickbacks or unearned fees, for the performance of any real estate settlement service.

Referral fees are prohibited when no services are actually rendered.

Any defrayment, payment, any act of paying money, any receipt, acknowledgment (usually tangible) that payment has been made, any kickback for anything of value for referrals for settlement services, including activities such as mortgage loans, title searches, title insurance, attorney performance or service, credit reports, an appraisal or a survey is prohibited by RESPA.

Have you ever had a situation arise that challenged this requirement ?

Where did you draw the line ?

Many thanks to all for you consideration and response.

David Saks

Time&Temp Memphis

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Comment balloon 3 commentsDavid Saks • April 06 2008 01:45PM


David...there is NO LINE to draw...the goverment drew it.  My advise is to never get into a situation of giving or receiving a "non-disclosed" fee....meaning it's not on the HUD1.  It just isn't worth getting your head chopped off if you know what I mean.  I've been a broker for 33 years, so I've seen some pretty elaborate deals that I'm glad "I" wasn't involved in.
Posted by David W. Bolick (Network Real Estate, Inc.) over 12 years ago

I would hope that everyone is playing on the same field. The next target I believe will be the builder-lender relationship. There are all kinds of incentives for the borrower to use the preferred lender. It doesn't allow for competition and isn't really regulated.



Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) over 12 years ago

Thank you David Bolick and Paul McFadden. Sorry for the late reply. Hope your having a great week.

Posted by David Saks ((retired)) almost 12 years ago

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