Legal Question in Real Estate Law in California

Referral Fees

I am a loan officer and I have heard different views on this topic and would like to know the correct answer. I have a lot of RE agent friends that work for different brokers and I would like them to refer their clients to me so I can do the loan. 1. Can I pay a referal fee of lets say 10% of the broker fee? 2. If not can I pay them a set amount? Like $500. 3. Is it ethical since they work for a different broker? Although they go through other people for their loans. 4. Can I pay people that are not licensed to generate the leads? And give them the 10%? or again a set fee.

Thank you for your time and input!


Asked on 2/28/07, 6:32 pm

1 Answer from Attorneys
Judith Deming Deming & Associates

Re: Referral Fees

No, legally and ethically, you can do none of the things you suggest. Also, if you are a "loan officer" you should know all of this, as you should be operating with a broker or finance lender's license or be in the employ of someone who is so licensed, and they should make you aware of these issues.

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Answered on 3/01/07, 1:33 pm


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