I sought my brother-in-law’s advice to sell my investment property. Instead, he hastily searched for agents and pushed for a referral fee, which felt unethical. Is this common practice in real estate?
In my experience, referral fees are generally reserved for situations where there is an active contribution to the sale process. Merely providing a list of contacts without further involvement typically does not justify a fee. I have seen agreements where a more hands-on role in facilitating negotiations or closing the deal is compensated. It might be beneficial to make the expected roles and responsibilities clear from the start. Clarity in the agreement can prevent misunderstandings and ensure that any fee is based on measurable efforts rather than just initial contact searches.
honestly, if he just did a bit of agent scouring, thats not usually fee worthy. you can mention its standard that fee goes for an active role. his little input doesn’t really make him a key player, imho.
I wonder if this scenario is often misunderstood. It seems he was just exploring options rather than contributing meaningfully. Have you thought about how to set clearer expectations next time? What do others think about handling these referral situations?