Is there a RESPA violation for a contractor to pay a referral fee to a realtor?
We are running a 203k contracting business and would like to pay realtors a referral fee if they suggest to their client that they use us for the renovation. Is there any conflict of interest that you can see on this topic? If we disclosed it all up front on the contract would that make it okay?
That’s a tricky situation and I highly reccomend that you not do it. You can provide marketing help, affliation help, and promotion assistance to the broker-not the agent. The agent works for the broker. However, the client must sign a document along with RESPA that your company is affliated with the broker. I don’t see a broker going along with that agreement because there is so much potential for liability.
If your realtor is referring you as a contractor to his clients, RESPA really doesn’t apply to that kinda relationship. Because they are not referring you as someone who will help to sell/buy/list a real estate. You would be in violation, if you were referring your clients to them and getting paid referral fee for that.