September 11, 2018
Let me go through a common scenario. Say Kevin, who is a REALTOR®, helps a Buyer find his dream home. The Buyer is ecstatic with the level of service that Kevin gave throughout the course of the transaction. On his own, the Buyer tells everyone about his great experience with Kevin and sends Kevin many referrals. Kevin wants to thank the Buyer for all the referrals. What does the Utah Administrative Code allow Kevin to give?
The rule states, “An individual licensee may not…pay a finder’s fee or give any valuable consideration to an unlicensed person or entity for referring a prospect, except that: a licensee may give a gift valued at $150 or less to an individual in appreciation for an unsolicited referral of a prospect that results in a real estate transaction[.]”
There are some important points about this rule language. First, the maximum amount a real estate agent may give is a gift valued at $150 or less to unlicensed individuals for a referral. And second, a referral from an unlicensed individual to a real estate agent must be unsolicited. In my example with the Buyer and Kevin, the Buyer is acting under his own volition. Kevin is not soliciting referrals with the promise of a gift in exchange for the referrals. So Kevin may properly give the Buyer a “thank you” gift for all the referrals that result in a real estate transaction.
Please note that asking for referrals from unlicensed individuals is perfectly legal to do. You can do so through Facebook, Twitter, Snapchat, Myspace, email, text message, phone call, etc. Just make sure that your advertising doesn’t solicit referrals in exchange for a gift or otherwise you’ll be in violation of this Division of Real Estate rule.
If you have any questions about referrals and gifts, feel free to call the UAR’s Legal Hotline at 801-676-5211 Monday, Wednesday, or Friday from 8:30 a.m. to 4:00 p.m.