Remember Clara from the burger ads? And, remember what Rod Tidwell (Cuba Gooding, Jr.) said? It’s only because IIC’s potential is soooo juicy, that, in this post, we want to….


It’s the math that convinces us Investing In Communities® is worth working hard to weave into the fabric of society, as the very best way that all us should always have a brokered real estate transaction.

Having the power to potentially direct hundreds or thousands of dollars to a charity you choose – at no cost to you – seems almost magical, right? It does to us too, but we know what’s behind the curtain and we’re pulling it back to show the rest of the world. We’ll explain how the math, not the magic, works. But first we’ll explain the conditions that make it possible for IIC to work our version of “magic”.

(I want to include Wendy’s and Jerry McGuire in this post, because the discussion here is a little on the thick side.)

IL real estate brokers are taught that the law (in Illinois it’s called 225 ILCS 454/ Real Estate License Act of 2000) governing the business activities of real estate licensees makes it illegal for them to pay a referral fee to anyone that does not have a sponsoring broker’s license. Our research indicates that to be the case in all states. In fact, only a sponsoring broker can pay a referral fee to another sponsoring broker.

Your neighbor may tell you about the agent they liked working with, but that agent’s sponsoring brokerage company is not allowed to pay your neighbor a referral fee. However, agent-to-agent referrals are legal and common practice. And they almost always involve the payment of a referral fee by the receiving agent’s sponsoring broker to the referring agent’s sponsoring broker.

Investing In Communities has that license  in Illinois, which means that sponsoring brokers that are licensed in any state can pay us referral fees in compliance with their respective state’s License Act. (The terms agent and broker are considered by many consumers to have the same meaning. But, technically, there are not the same. When we use the term agent, we mean the licensee with whom you are working.)

The most common percentage of the agent’s commission that is paid as a referral fee is 25%, in our experience of calling hundreds of brokers around the country. And the most common commission rate seems to be 5-6% of the home price, which is typically split evenly between the buyer’s and seller’s agents. We use 5%, in the following example.

Mary, our hypothetical buyer, goes to the IIC website to request broker referrals and to choose the charity she wants to receive the IIC charity Support Payment from her upcoming home purchase. Let’s say it’s the local animal shelter. IIC then uses Mary’s specifications to find several brokers that are qualified for her transaction based on the type of properties they typically work with and their general price range being what May wants, and their familiarity with the neighborhood(s) in which Mary is interested.

We ask those agents the “magic” question. (It always makes them chuckle.) “Would you like a referral?” (We have heard “no” only once. That agent explained that he works only with foreclosures.)

The second rhetorical question we ask is “What do you typically pay brokers for referrals?” The most common answer is 25%. IIC enters into a referral fee agreement with their sponsoring broker. Then, the agents’ information is passed along to Mary, who contacts them and decides which one she wants to work with. After Mary buys her condo for $300,000, her agent gets half of the 5% or $7,500. Her agent’s sponsoring broker sends IIC the 25% referral fee of $1,875. IIC sends 70% of the referral fee, $1,312.50, to the local animal shelter that Mary chose.  

It all comes down to Mary starting with IIC and completing in just a few minutes an online referral request. Mary chooses among the IIC referred brokers the one she wants to work with. And shortly after the closing, the animal shelter gets the check. Cats and dogs and puppies and kittens are helped, along with the lucky people who experience the joy of getting a new family member, all because Mary used IIC to choose her agent!

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