C O A L I T I O N Corner The Interchange: Helping to resolve “after-the-fact” referral fee complaints Coalition Corner: Business training tools for HR staff, real estate licensees and other service professionals in the relocation and real estate industries © 2005, Employee Relocation Council/Worldwide ERC ® Coalition

C O A L I T I O N Corner Program objectives This program supplements a monthly editorial feature in Worldwide ERC ® ’s Mobility magazine This segment will: –Review key facts about real estate referral fees –Highlight methods for resolving and reducing “after-the- fact” referral fee requests, particularly through the Interchange online complaint resolution tool

C O A L I T I O N Corner Introduction Referral fee programs are commonly used within relocation and affinity program industries They can generate additional business and income for real estate practitioners, brokerage firms, relocation management companies and corporations or affinity program sponsors A variety of efforts have been implemented to address and reduce the incidence of unacceptable “after-the-fact” referral fee requests, or improper requests for the payment of a real estate referral fee following the conclusion of a transaction Such efforts include…

C O A L I T I O N Corner Efforts to Eliminate or Reduce “After- the-Fact” Referral Fee Requests A “Policy Statement on the Collection of Real Estate Referral Fees” at and industry pledge of adherence “STOP sign” referral fee communications for transferees ( and licensees ( The Interchange at a free, confidential and online resource available to Coalition/Worldwide ERC ® members and non-members alike

C O A L I T I O N Corner Key Referral Fee Facts –Referral fees can only be paid to other entities holding real estate broker’s licenses –Referral fees can be generated on either the departure (selling), or the destination (buying) side of moves –The majority of complaints arise when licensees are unaware of the requirement to pay a referral fee at the beginning of a relationship –Good rule of thumb to determine the validity of a referral fee: “first contract, not first contact” methodology In other words, while a licensee and a transferee/affinity group member may have had some form of contact prior to the request for a fee, whether or not the fee is justified will depend on when the contractual agreement dictating the referral fee policy was established

C O A L I T I O N Corner About The Interchange –Was created to facilitate the confidential communication of after-the-fact referral fee concerns, while at the same time, allowing the Worldwide ERC ® Coalition to learn more about general areas where improved communication, education, and/or standards in the industry may be needed –Object is to ensure swift and equitable problem resolution –Brings the issue of an after-the-fact referral fee request to the attention of the appropriate senior executive(s) from employers, relocation service firms and affinity groups

C O A L I T I O N Corner How The Interchange Works –Complainants are encouraged to use the Interchange e-form at ( to send a brief, factual message about a referral fee issue –Complainants receive an confirmation of receipt of message –The issue is swiftly brought to the attention of the appropriate contact(s) –A reply should arrive within 10 business days or sooner (or complainants are notified of any need for additional reply time)

C O A L I T I O N Corner In Summary –The Interchange is a communications tool, not a mediation service –Relocation companies commit to investigate the complaint and to expeditiously communicate their findings back to the complainant –Coupled with additional educational and communications efforts to raise awareness, the Interchange is a major influence in reducing the instances of improper after-the-fact referral fee requests