Paying a referral fee is a sore subject with me ever since I had an AR agent try to cheat me out of a $20K referral fee...I think it is sickening that someone would try NOT TO PAY.  A referral agreement is a contract.

HOWEVER...agent A sent a referral to agent B that expired in 1 year.  That referral contract is dead.  Agent B does not need to pay.

Who cares how many referrals you gave them or your expectations or what you ASSume? 

If you want referral fees to go on forever, do not put in an expiration date.

Eve

if your referral agreement expired and said nothing about future sales or listings, no referral is due.... that's my opinion....

it's not like the cemetery and perpetual care!

If I were Agent A, I would not expect a referral fee from Agent B (per the Contract). However, if Agent B is worried about future referrals, they may, out of courtesy/respect, pay this time. 

If I were Agent A, I would change that referral expiration date to 3 years - most tenants will wind up with a 1-year lease and then go 1-3 more months (month-to-month) while they secure a purchase. That would expire almost all 1-year agreements in our area.

Follow the terms of the written agreement.

A lot of ethical quicksand abounds when we refer for fees rather than to make sure the best agent goes to our referees.

Be specific with your referals and you will have less problems.

Your own facts indicate the referral agreement expires after 1 year, thus no referral fee is owed 2 years later.   

Further, in one breath, you discuss fees from multiple referrals as a professional courtesy, but in the previous breath, you discuss a definite referral arrangement.   It sounds like you're fishing for alternative theories to argue for a fee, when none seems to be owed.

I say this as someone who's generally very liberal and generous with such fees, but not when there's bad faith involved.

    Professional courtesy and "the right thing to do" mean absolutely nothing when it comes to getting paid.  It has to be in writing, before the expiration date.

This sounds like  a test question.  I got lost in the a's and b's.  Follow the Golden rule.  It is a good guide.  25% is a standard fee in this industry.  

Pass your test, find a broker, work with the broker on this.

There is obviously no conractional obligation. But I agree - what is the right thing to do? If that agent has been providing you with additional referrals, I believe giving a referral back honoring the original terms of the contract is going above and beyond what is expected. But if the shoe were on the other foot, how would you feel about someone doing this to you? 

If you want a relationship with this agent: yes. 25% of one of the deals.

If you do not care about the relationship, then the agreement expired and you're legally clear.

Many agents forget these agreements default to 1 year unless they alter it.

If it were me, I'd pay on one transaction, 25% to keep the givers gain karma, but that's me. I do not think you owe on more than one deal, but the spirit of that agreement had no time limit if you want the relationship to continue.

Legally Agent B had all rights not to pay any referal fees since the contract expired. 

The same situation when you change the broker. 

However.... it is a good example how it works in real estate, the referral contract can not be expected to go forever. Agent B was working 3 years to get those sales. 

The agent should be disappointed and angry that they set up a written referral agrement with a 1 year expiration to begin with. There is nothing due after 1 year

If the agreement expired then nothing is to be expected on either side. That is why we puts things in wrting in real estate and have expiration dates.

I agree with Debe. Karma is a hairy bitch in situations like this. Agent A's statute of limitations ran out. To boot, the client obviously liked Agent B, doing multiple transactions with them. Agent B, however screwed themself by creating ill-will with A.

The proper thing to do would be to refer the client back to you if they needed a Realtor provide you guys have a good working relationship, which it sounds like you do if you have continued to refer to him/her. We pay a 25% referral fee 

You pretty much answered your own question.. the agreement is dead.. so no referral fee is payable in my view.

I agree that if the referral has expired nothing is due.

You want a referral paid... you need to outline circumstance, terms, etc. in advance. 

Many good answers.

As others have already written. Hope you pass your test.

I can understand Agent A feeling a bit disappointed that Agent B did not take the initiative to send along a referral fee. However, the agreement specifically stated after a year, the agreement was no longer valid. So Agent B has no obligation to do so.

If Agent B wants to get more business from Agent A, he/she should go ahead and send along a referral fee.

In the interim, Agent A should decide if he/she wants to keep giving Agent B business, and should adjust his/her agreement documents' expiration dates accordingly.

I'm just 1 month past the referral expirtation on a succesful high-dollar sale. As the referring agent that did a lot of hand holding with my long-time clients that were relocating, I think the other agent should honor the fee. So far no sign of that happening though...

First thing to do is read the referral agreement and find out the terms.

Second, follow those terms.

I'm a Property Manager and get referrals from other agents all the time. I haven't created a standard referral form yet but this is what I currently offer - in writing - to anyone that refers an owner to me for property management.

Agent Betty refers Owner Jones for property management. I send Agent Betty a referral agreement with the following guarantees:

1. If Owner Jones signs a one-year management agreement with me, I will pay Agent Betty a small referral fee for bringing me the new Property Management business.
2. If Owner Jones decides to list the home for sale and it has been less than five years since the referral for Property Management, I promise to refer them back to Agent Betty for selling.
3. If the Owner chooses to stay with my office for the sale and it has been less than three years since they were referred to me, I will notify Agent Betty of the Owner's decision and offer our standard sales referral fee.
4. If it has been more than three years but less than five, I will still refer Owner Jones back to Agent Betty. If Owner Jones chooses to stay with my office, I will notify Agent Betty of the decision but I will not offer a referral fee.
5. After five years, I am under no obligation to refer Owner Jones back to Agent Betty, notify Agent Betty of a pending sale, or offer any referral fee.

If the contract expired, nothing. If you will do future work with the agent who refers a great deal of clients, you may want to offer a referral. But if it is long after the closing, the damage may have already been done to get future referrals. 

Roy Kelley nailed this one!

The referral agreement is 2 years past the experiation date so no fee

Find happy and if you have to think about it, you have an additional issue. 

That is the way it went. It is a cruel world.

If I were agent A, I would not have a year limit on the referral agreement.

Others have answered.

25-30 % 

Depends what your agreement said.

I guess, they won't pay...

Referral Agreement is 'FOREVER' for me!

Per your stated facts no referral due. If agent A would have maintained contact he may have had an opportunity 

Only what is in writing matters in real estate. Agent A should have kept in contact with tenant- sent holiday cards, emailed, called a few times. Tenant is out of the area and out of mind. If Agent A did not maintain the relationship it is not up to Agent B to circle back and send some money. However, Agent B will get no more referrals.  Next time send a referral with an agreement to pay x $ year 1 X $ on year 2 and 3. Let it go. Find new referral source. If send listings and buyers to agents who don't reciprocate with business (they give my name out to  4 others and the business is one-way silent - then no more referrals. 

Will be a interesting subject.  Always have a deadline in your agreement that all parties are on the same page.

I stick with the letter of the contract.  I referred a friend recently who bought with that agent.  The contract stated buy in one year and that transaction has been completed.  Per the contract if she buys in 366 days from when it was signed, I do not get anything.  If she wins the mega lottery and buys up half of San Diego before the 1 year mark is up, I'm going to be a very happy man!

Now with that said, if someone was referred to me and they bought within that year I would pay per the contract.  If they bought again after that contrat expired, I'd most likely send a small thank you gift card to the referring agent.

As you said, no contractual obligation. However, I sense some moral obligation - maybe you could take the agent out to dinner or give a gift certificate, to maintain good will, but not a referral fee - no obligation there.

There is no obligation to pay a referral fee after the expiration date. The referral agreement is a contract with an expiration date whereby the agreement expired. You should have negotiated a longer period of time in the original referral agreement.

Yes, referral fees should be paid. 

How much? Not a penny more that specified.

Is it the referring agents best practice to stay in touch with their referred contact to insure they are informed of the status and concerns of their friend. 

MORAL: The neglected relationship always goes bad.