Referrals: Paying Your Friends For Good Leads
You would think that everyone you know should be referring business your way. But sometimes, they don't want to take the risk. What if the people they refer to you don't get approved, and waste your time, or what if you don't do a good job to the people they refer to you. This fear is one reason why referrals don't get made in the first place.

In order to help a person overcome their fear with some good old fashioned quid pro quo, it sometimes makes sense to make it known among your circle of friends that you will pay them for their referrals.

Now, it's important that you check with the real estate division in your state.

The State of Utah Real Estate Division displays the Utah Admin Code referrant to this type of activity, In Utah Admin Code R162-6, section 6.1.9 and 6.1.9.1.

6.1.9. Finder's Fees. A licensee may not pay a finder's fee or give any valuable consideration to an unlicensed person or entity for referring a prospect in a real estate transaction, except as provided in this rule.

6.1.9.1. Token Gifts. A licensee may give a gift valued at $50 or less to an individual in appreciation for an unsolicited referral of a prospect which resulted in a real estate transaction.

So in Utah, a licensee is allowed to give a gift valued at $50 (or less) to someone for an unsolicited referral.

So an obvious question is, how can I avoid breaking this rule, yet still receive referrals.

One sure way to violate this rule would be to offer a referral in any kind of printed form. That would clearly be a solicitation (in this Layman's opinion) and would of course qualify. No email saying "$50 Thank You For Referring Me To a Friend". No postcard, or flyer.

Also, of course, would be giving someone a gift of over $50. That also would pretty clearly be against the rule.

But if you received an unsolicited referral from a past client, and then gave them a gift of $50 or less, would that be ok to put in your newsletter that you received the referral from them? I think it'd pretty clearly violate the rule if you then asked for referrals from others. But what if you just left it at that.

What if you displayed a placard on your office wall which read: "Section 6.1.9.1: A licensee may give a gift valued at $50 or less to an individual in appreciation for an unsolicited referral of a prospect which resulted in a real estate transaction."

Personally, I believe the rule is to keep people from offering bounties for people to turn in friends and family looking for Realtors. Imagine opening the paper and seeing bidding wars from different brokerages trying to buy business.

If you have a story of something nice you were able to do for a client that shared a lead with you (which resulted in a real estate transaction) I don't feel it'd be inappropriate to share it, in person, with your clients, friends or family.

Sometimes, when debating on whether to give a name to a real estate sales agent, it's the GIFT that counts.