How much do you pay for a referral?

[rainman11]

Hello,

I`m wondering what`s the going rate on how much do you pay for a referral? Like for example I have two apartments for sale in Ontario listed at my website and I thought I`d try offering $2000 dollar referral for my 14 unit and a $5000 dollar referral fee on the 63 unit. So if someone referred a buyer to me and they got paid that finders fee or referral fee, is that a reasonable amount?

 

[RedlineBrett]

QUOTE (rainman11 @ Dec 11 2008, 02:05 PM) Hello,

I`m wondering what`s the going rate on how much do you pay for a referral? Like for example I have two apartments for sale in Ontario listed at my website and I thought I`d try offering $2000 dollar referral for my 14 unit and a $5000 dollar referral fee on the 63 unit. So if someone referred a buyer to me and they got paid that finders fee or referral fee, is that a reasonable amount?

No, it`s quite low.

In sales in Alberta a standard referral fee is 25% of whatever the buyer agent makes. That amount is between 1.5 and 2.5% of the purchase price on commercial buildings.

Have you considered using an agent?

 

[Dan_Eisenhauer]

That 25% of one side of the commission is almost standard right across the country. In some cases it is 30%.

That will give you a guide line. I assume you have had a friend or coworker refer a buyer or partner to you, and you are trying to figure out how to reward that recognition. I think that is a good idea because it will encourage people to give you referrals.

Having said that, if you are just giving a friend recognition for a referral, I suggest you treat the person to an experience, such as a fantastic weekend for two at a fancy hotel, along with dinner at a snazzy restaurant. That will be remembered much longer than where they spent the money you gave them.

 

[Thomas Beyer]

QUOTE (rainman11 @ Dec 11 2008, 02:05 PM) Hello,

I`m wondering what`s the going rate on how much do you pay for a referral? Like for example I have two apartments for sale in Ontario listed at my website and I thought I`d try offering $2000 dollar referral for my 14 unit and a $5000 dollar referral fee on the 63 unit. So if someone referred a buyer to me and they got paid that finders fee or referral fee, is that a reasonable amount?
about half of a typical sales commission .. so 0.75% to 1% would be reasonable for commercial .. or slightly more for a single house or condo !

 

[Mike Milovick]

Hi Matt;

Very low. Why would a realtor waste a high-end client on something that pays a minimal commission in this environment where circumstances make doing any deal difficult?

In our area, on properties like yours (Kitchener-Waterloo), you would likely be in the 4% to 5% commission range...I would suggest finding the best realtor you can in the area...

Mike



QUOTE (rainman11 @ Dec 11 2008, 04:05 PM) Hello,

I`m wondering what`s the going rate on how much do you pay for a referral? Like for example I have two apartments for sale in Ontario listed at my website and I thought I`d try offering $2000 dollar referral for my 14 unit and a $5000 dollar referral fee on the 63 unit. So if someone referred a buyer to me and they got paid that finders fee or referral fee, is that a reasonable amount?