No, not us. We don’t play that way.
There appears however to be some real estate brokerages out there that are doing exactly this — taking money to put someone on their “preferred partner” list.
What the heck is a “preferred partner” list?
In the real estate world, buying or selling a home is often a collaborative effort between the clients and a bevy of services and entities like — real estate agent/brokerage, mortgage lenders, home inspectors, insurance providers, title companies, home warranty providers, and even contractors / repair companies that handle things like plumbing, electrical, roofing, painting, furniture moving, etc.
Almost any real estate agent or brokerage that has been around for any length of time has their “A List” of ancillary providers. It’s simply human nature to work with companies and individuals you know and trust to do good, honest work.
I’ll admit it. There are 3 or 4 lenders out there that I have no problem highly recommending to our clients. Ditto with title companies, inspectors and the like. There are a few escrow officers I specifically ask for when we open escrow.
Why? Because I have worked with these folks in the past and I know them to be effective, efficient and ethical. I know for a fact, based on previous experience, that they will do an amazing job for my clients.
And that ”“ superior customer service ”“ is how someone gets on our “preferred partner” list. You want on our list, you earn your way on it.
Seems to me that should be the only way to get on such a list.
Apparently though, there are some brokerages out there who command a fee to put someone on “the list”.
Read that again, slowly”¦
There are brokerages out there that charge admission to be on a preferred partner list.
Personally, I can’t think of a real estate practice that is more appalling than this. (Well, single-agent dual agency is one. Charging buyers and sellers “transaction fees” is another. Then there is the practice of charging agents absurd amounts of money for E&O insurance. OK, OK, so letting people buy their way onto a preferred partner list is but one of many poor practices in this industry”¦)
Sadly, apparently this practice is not all that unusual.
I “polled” Twitter this morning, asking this:
Yes, I realize that asking a question on Twitter hardly constitutes a scientific survey, and the results are certainly not statistically valid. But the responses were interesting. As I didn’t specifically ask permission to quote anyone, let me summarize these publicly Tweeted responses:
- My office does, but it’s a very small fee and vendors have to be personally recommended to keep it a quality list.
- We do not. Do not believe it is honest to the customer.
- No way dude.
- Really? That happens?
- My old brokerage did”¦
- Most of the [insert large national brokerage name here] offices in DFW charge to be on their vendor wall.
From vendors in the real estate space:
- [Insert three large national brokerages here] do. Prices typically $2 ”“ 10K. Most also require 1 ”“ 2 tradeshow appearances at $15-30K/yr
- When I was first checking into approved vendorships I had several companies tell me I had to pay for it.
In addition, I received some private communication that confirmed there are brokerages out there that require a payment in order to be placed on a “preferred partner” list.
Is it just me, or is the practice of making someone buy their way onto a list of preferred partners just plain wrong?
I don’t get it.
All morning I’ve been racking my brain trying to find a way to justify this practice.
The only thing I can come up with is it takes time and effort (which equals money) to establish and maintain a current list of providers / partners.
That’s a really lame excuse.
Time and effort? Go to Google Docs and start a spreadsheet. It’s free. Email your agents a link. Free. Invite them to add to the list. Free. Time investment? I dunno, maybe 20 minutes?
What am I missing here? Other than lining the pockets, what is the rationale behind charging someone to be on your preferred partner list?
Doesn’t charging to be listed compromise the integrity of the list? Do you tell your clients, “We recommend these providers because, well, they pay us to do that.”??? You do disclose to clients that your “preferred partners” pay to be listed, don’t you?
Seems far simpler, and much more genuine, to list providers that deserve to be listed. You know, because they are good at what they do, not because they write you a check.
But maybe it’s just me. What say you?