By Quentin Fottrell, MarketWatch
My neighbor whom I know only slightly decided to sell her home “by owner.” I referred a couple to her and the house is now under contract with my referral.
The seller will save nearly $40,000 by avoiding a real-estate commission, but she has not offered to give me any compensation for my referral.
Should I be more straightforward about asking for some minimal compensation? If so, what do you think would be an appropriate amount to suggest?
North Carolina Neighbor
You did a nice thing. A helpful thing. A neighborly thing. You will have two new neighbors and you will be safe and happy in the knowledge that you did a good thing.
Receiving payment for making such a recommendation is illegal in North Carolina and several other states, including New York . In North Carolina , “No unlicensed person or entity may be paid for engaging in any activity or conduct considered to constitute real estate brokerage. This is true regardless of whether the person making the payment is a real estate licensee or an unlicensed person.” In part, that law exist to help prevent fraud or kickbacks.
Would it be welcome if your neighbor offered you a token gift of cash or surprised you with something that you really needed? Sure, it would have been nice had she offered you a gift. You could have gone through the motions of protesting until you finally said, “I would accept it, Mary, but it’s illegal.” The only thing you need to hear from her is “Thanks, Bob.” If she brought you a homemade pecan pie with a bottle of her signature lemonade, that would be acceptable.
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So don’t call her up or knock on her door and ask her for a commission. Not only would it be illegal, it would be tacky and, worse, you may create some kind of self-serving vortex where everyone wants payback for doing a good deed. She would have found a buyer with or without you, and saved herself $40,000. It pains me to think of you at home calculating the price of her house and the percentage she saved, and how she now owes you $1,000 or $5,000 as a token thank you.
Rather than focus on what you can get from your current neighbor, think about what you can do for your new neighbor. When you make the biggest investment of your life, there’s nothing more important than nice neighbors. A quarter of homeowners regret not asking questions about their neighbors when they’ve bought a home, one survey by mortgage-information site HSH.com found. Be the change you want in your neighborhood.
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