Houston, TX asked in Real Estate Law for Texas

Q: Does offering a loan to buyer, based on agent's commission, & forgiving the loan for successful referrals, violate RESPA

I have a question regarding real estate law in Texas. If a buyer agent offer 100% of the buyer agent's commission to the buyer at closing as a loan and the buyer needs to pay back the loan over the terms of the mortgage (30 years). Subsequently, if the buyer makes 1 referral who successfully closes on a home to the buyer agent, the buyer agent would forgive a portion of the loan (say like 20%). In order words, the buyer could potentially get 100% of the commission they receive at closing by making 5 referrals. Is that a violation of RESPA or any other real estate law? Thank you!

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1 Lawyer Answer
John Cucci Jr.
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A: Real Estate Agents/Brokers, can NOT share any part of a RE sales commission with someone who is not also licensed to sell RE. What's more, the new sale, and those involved would ALL have to receive Notice of the parsing-out of any sales commission. So it is unlawful for at least two (2) reasons. It is probably, also unethical and smells of CONFLICT of interest.

I would not go forward with such an agreement. Also, the agreement is not enforceable, if it is unlawful.

Be Careful! It's great that you asked the question.

Good Luck!

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