Question

Broker Bob has a contractual referral fee relationship with Big Insurance Company. One of his agents has listed a property, unaware that the seller is being transferred by Big Insurance. Will the agent and Broker Bob be required to pay the fee?

a) Yes, as a pre-existing contract was in place.
b) Yes, unless the commission rate is less than 6%.
c) No, Big Insurance cannot ask for a referral fee on an exclusive listing.
d) No, this type of relationship violates RESPA.

Answer 1

The correct answer is b) Yes, unless the commission rate is less than 6%.

Step-by-step explanation:

The correct answer is b) Yes, unless the commission rate is less than 6%.

According to the question, Broker Bob has a contractual referral fee relationship with Big Insurance Company. This means that if any agent listed a property, a referral fee is required to be paid. However, there is an exception if the commission rate is less than 6%. In that case, the fee does not need to be paid.

Therefore, both the agent and Broker Bob will be required to pay the referral fee unless the commission rate is less than 6%.