Can an Inactive Texas Agent Receive a Commission?
December 28, 2011
I found this question in my site logs this morning.
In Texas only active salespersons and brokers can be paid or receive any form of compensation. Compensation is defined as anything of value including commissions and referral fees.
That’s where a Limited Function Referral Only (LFRO) brokerage such as Referral Agents of Texas comes in.
Our salespersons are active agents with the Texas Real Estate Commission. The only difference between our agents and other agents is that our agents cannot practice real estate because of the Independent Contractor Agreement. The only thing they can do is to refer out business. In return, they do not have to pay dues to NAR, TAR or the local association; no MLS fees; and no keycard rental.
See our Frequently Asked Questions for more information on LFROs.
Photo: Licensed from iStockPhoto
Can a Referral Agent Conduct Open Houses?
December 20, 2011
This is an interesting question. We know that the Texas Real Estate Commission (TREC) has stated that unlicensed assistants can conduct open houses but there are some real limitations. From the TREC Website:
“…care must be taken that the unlicensed person does not “show” the house to prospective purchasers. Commission Rule 535.1(c) makes clear that only licensed agents are allowed to show properties. On the other hand, Commission Rule 535.1(c) also specifically allows a broker to hire an unlicensed person to serve as a “hostess, attendant, or custodian” at homes offered for sale by the broker. The Rules do not define these terms, and such a hostess should be limited to welcoming the visitors. The hostess may register the guests and refer inquiries to a licensee. Clearly, the hostess must not point out features of the home or neighborhood to visitors; however, as is the case with secretaries and receptionists discussed below, the hostess may distribute a flyer or brochure that describes the property.”
Referral agents are licensees so sitting in open houses should not be a problem from a state licensing standpoint. However, that agent would still have to exercise caution because of the agreement with their broker. Our Independent Contractor Agreement is very clear that our agents will not provide brokerage services and may only refer out business to other brokers who do provide brokerage services.
I would suggest that referral agents sitting in open houses conduct themselves as unlicensed assistants and limit their activities to registering guests and passing out information.
Photo licensed from iStockPhoto
Referral Agent as a Retirement Plan?
December 12, 2011
Many of us would like to retire at some point but the real estate industry tends to be very transaction-based and we’re no better than our next paycheck. We spend years growing our sphere of influence and at the end we might find a buyer for it.
Why not continue to earn income from your sphere? In order to do so your license must remain active with the state licensing authority and, for many of us, we will continue to pay dues (National, state, and local), pay for MLS access, etc. This is an expensive business!
Brokerages like ours offer another possibility. Referral Only brokerages are exempt from paying dues, MLS access, and most of the other expenses involved in staying active in real estate. The only cost in Texas is the small fee (about $100) to keep your license active and your 15 hours of MCEs every two years.
We currently sponsor a number of retired agents who are enjoying being able to generate income from the businesses they built over the years.
Photo: Licensed from iStockPhoto
Welcome to our New Website
December 12, 2011
We’re pleased to announce that we have completely updated the Referral Agents of Texas Website. The new site runs on the WordPress platform and the Architect Theme from iThemes.