We have a number of real estate agents who express concerns about the ability to utilize our travel and events incentives due to RESPA. However, it is important to note that a good chunk of RESPA rules are related to the giving or receiving of gifts, incentives, offers, and payments for referrals.

In other words, if you were to give an individual a travel incentive in exchange for them referring someone to you who is a sure-fire property sale, then you would likely be in violation of the rules set under RESPA. However, if you simply give a customer a travel incentive as a thank you for them buying through your real estate agency, that is not in violation. Nor is advertising a travel reward associated with a property purchase.

The Short Version – Do not use our incentives for sales referrals. In general, they can be given as gifts to buyers, can be used in promotions, can be utilized to help you sell a home, and more.

Section 8(a) of RESPA prohibits giving and receiving any fee, kickback, or thing of value for the referral of settlement service business. A violation of RESPA carries the potential for up to a year in jail and a $10,000.00 fine for each involved party.

The highly regarded real estate law treatise by Miller & Starr, California Real Estate, citing RESPA, concludes, “The Act does not prohibit a cooperative brokerage and referral agreement between real estate brokers where one broker pays a referral fee to another broker. However, a broker cannot pay any consideration to an unlicensed finder even though such payment may be legal under state law.”