Referral Fee versus Gratuity Gift

QUESTION: Sir John, I want to give incentive to people who will refer real estate buyers to me. Can you tell me about referral fees?

ANSWER: A Referral Fee is paid by the Broker to a Referrer who introduced the buyer. This strategy is used in order to generate more sales and increase their customer base. A referrer is distinguished separately from an agent as a referrer does not do any selling of real estate, but rather will only refer a potential customer. The act of selling remains to be the sole function of the Broker or Salesperson. For the fee to be binding, there should be a Referral Fee Agreement between the Broker and the Referrer. This Referral Fee Agreement can be customized according to the preference of the Broker and it could be a fixed fee or percentage basis. The condition of payment can be stated in a way such that this can be viewed as a "No Consummated Deal – No Fee " type of agreement.

The informal type of referral fee is called a Gratuity Gift. Informal in the sense that there is no formal agreement as to the conditions of the payment and the amount of the fee.

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REFERRAL AGENTS


Napaka diversified na ang RE sector sa ibang bansa. Tingnan nyo etong Global Referral Alliance.


QUESTION: Sir John, legal ba ang Referrer? ANSWER: I think so, YES. Sa initial opinion ko, ang Referrer ay pwede eto maging isang specialization ng mga real estate practitioner, with or without license. A Referrer sells information/leads, they don't sell properties, they also don't "represent" buyers, they don't work for brokers too, so sa tingin ko hindi kailangan ng license etong layer na eto. Isipin ko pa ng mabuti pag hindi na ako pagod.

Pero sa tingin ko, legal yang Referral Agents. Hindi kailangan ng license pag mag-benta ng information.

So we have FSBO, DBO, EBA, SPA, REFERRERS. Ma extinct na ang mga Broker, mawala na sila sa equation. Hindi ako nag-kulang sa paalala na mag integrate na.

QUESTION: Kung ang purpose ng batas ay to raise more revenue, dapat stop and hindi iallow ang ganitong practice. Not to stop this practice would be disadvantageous to the gov't because the BIR would be wasting its time going after these referrers who are not BIR-registered, for income tax deficiency.

ANSWER: Well, unahin muna i-implement ng maayos ang batas na bago gagawa ng bago pang mga batas. Lahat naman na merong income ay dapat mag declare and mag bayad ng income tax, kasama yang mga ganyan. Pero hindi na-capture ng gobyerno kasi hindi man nag-rereport ang mga kumikita. Ehh RA 9646 hindi na-iimplement ng maayos, ehhh yan ang sinasabi ko na pag hindi tayo magkasundo na gawing level ang RE service sector, let's just put one another to extinction. Ang unang ma extinct ay mga Brokers. Susunod na yang Appraisers, Consultants.