Industry News

Reward offer can lead to legal complications

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Inman News received several comments from readers questioning the legality of a real estate flier advertising a $1,000 reward to the person who finds a buyer for a property in the San Francisco Bay Area (see story). Readers asked whether a person without a real estate license who is not directly involved in a real estate transaction can receive money for finding a buyer for a property. Federal law clearly prohibits this sort of reward, said a mortgage lawyer. And under state real estate licensing law, the offer itself is not illegal but it could become a violation depending on the actions of the listing agent who is offering the reward and the person who seeks the reward, according to a spokesman for the real estate regulatory agency in California. The flier states, "Wouldn't you like to have your friends or family live in your neighborhood and receive a little extra spending money? If you find a legitimate buyer and escrow closes on or before Nov. 30 ... we will pay you $1,000...