legal referral fees?

thatdguy

Expert
35
What is the legal referral fee you can give to someone for sending business your way? Is it a $50 cap or $100 cap or is there NO cap, just as long as you aren't offering a "percentage" of the policy commission? Is it per state or overall a standard?

I have 4 mortgage brokers who are going to send several hundred people my way each month and they are asking.
 
Well, now, that's a very easy question to which I don't have a specific answer but I will tell you....don't focus on the dollars, per se. Mostly the mortgage brokers are looking for ways to pay for their own marketing, whether that be gas cards (as gifts), advertising, mailings, the like. You just don't want to be in a situation where you have written a check. No one will ever know if you gave them a gift certificate to the Olive Garden (heh heh).
 
You can't necessarily write off a ton of different gift cards though?
but gotcha on that! thanks
 
I would say most people don't really want the money, they want what the money will do for them. Everyone in real estate is retracting right now, which means it's time for them to step up their marketing efforts. Great job on the referral pipeline, and best of success!
 
If you're paying for marketing, that's a legit business expense. You just wouldn't be writing a check directly to the agent, you'd be writing it to the advertiser. I don't give tax advice but I no see no problemo.
 
Be carefull, mortgagebrokers need to be wary of giving out information that isn't approved by client, I went through this last year and there are some guidelines you need to be aware of.
 
How do you figure? Let's say we're talking about a mortgage broker who would like to spend money advertising in the local news(rag)? If the insurance agent pays for the ad (with an underlying agreement that business will be referred to the insurance agent) what's the problem? It's marketing dollars, period.
 

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