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Refferal fees aren't kick backs. Even in California if one real estate agent refers another real estate agent they get 30% of the commission of that agent. That is customary and discussing this with a developer from California is not illegal nor uncommon just like in Texas. A kickback would be a decking supplier referring a contractor and the contractor giving him a $1000, or a maintenance guy referring a remodel and the remodel giving them 1k cash on the side


To a real estate agent that I like and respect I will pay 1% of the sale, what they would get for referring another realtor. So an $800000 house is $8000, unlike a kickback that will get a 1099 with it as well. It is a professional service. I have just paid a 1% fee for the 1st time in probably 18 months, but she works her butt off and when she refers somebody she takes them to my office And introduces them over coffee in my conference Room. She also will stay involved throughout the sale of necessary. She is not a lazy scumbag like most of them. Lol


I refer houses and remodels to other contractors all the time, probably 7 houses have been built by people I have referred in the last 12 months and probably 20 remodelling projects, not to mention repaints and small projects. I have never and will never accept a kickback, my bar gets restocked at Christmas though, think I got 7 bottles this year . Pool guy I referred to 3 pools and he built 3 for me in 2020/2021 , I have an open invitation I may take up this summer to his house in Costa Rica and I'm quail hunting on his ranch outside Marathon this year. If he offered cash I wouldn't accept it
 

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GC/carpenter
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Refferal fees aren't kick backs. Even in California if one real estate agent refers another real estate agent they get 30% of the commission of that agent. That is customary and discussing this with a developer from California is not illegal nor uncommon just like in Texas. A kickback would be a decking supplier referring a contractor and the contractor giving him a $1000, or a maintenance guy referring a remodel and the remodel giving them 1k cash on the side


To a real estate agent that I like and respect I will pay 1% of the sale, what they would get for referring another realtor. So an $800000 house is $8000, unlike a kickback that will get a 1099 with it as well. It is a professional service. I have just paid a 1% fee for the 1st time in probably 18 months, but she works her butt off and when she refers somebody she takes them to my office And introduces them over coffee in my conference Room. She also will stay involved throughout the sale of necessary. She is not a lazy scumbag like most of them. Lol


I refer houses and remodels to other contractors all the time, probably 7 houses have been built by people I have referred in the last 12 months and probably 20 remodelling projects, not to mention repaints and small projects. I have never and will never accept a kickback, my bar gets restocked at Christmas though, think I got 7 bottles this year . Pool guy I referred to 3 pools and he built 3 for me in 2020/2021 , I have an open invitation I may take up this summer to his house in Costa Rica and I'm quail hunting on his ranch outside Marathon this year. If he offered cash I wouldn't accept it
In California it's illegal for contractors to pay a referral fee unless they work for the company and are registered as a sales agent with the state board.

So in other words they need to be a legit salesperson working for your company.


Mike.
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In California it's illegal for contractors to pay a referral fee unless they work for the company and are registered as a sales agent with the state board.

So in other words they need to be a legit salesperson working for your company.


Mike.
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Right, I was just definitiating between referral fees and kickbacks. Certain industries what we would consider a kickback is not a kickback at all but it's just part of their industry. Like real estate

I got to listen to about half A-day of discussion about this subject in others with California law and even Colorado law when we were discussing a state builder licence . Texas is basically the wild West compared to any of those States, anything goes and is legal pretty much. The contracts many people in Texas use would be illegal where you live as well, a true cost plus contract can be triple over budget and still be in the contractor's favor in court, for my understanding your state among others do not allow those types of contracts
 
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California Business and Professions Code Section 7157(d) Prohibited Inducement, says referral fees are considered to be illegal inducements, a violation of Contractors State License Law. ... Subsequent violations will prompt an accusation that could result in further penalties, up to revocation of your contractor license.


Mike.
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Right, I was just definitiating between referral fees and kickbacks. Certain industries what we would consider a kickback is not a kickback at all but it's just part of their industry. Like real estate

I got to listen to about half A-day of discussion about this subject in others with California law and even Colorado law when we were discussing a state builder licence . Texas is basically the wild West compared to any of those States, anything goes and is legal pretty much. The contracts many people in Texas use would be illegal where you live as well, a true cost plus contract can be triple over budget and still be in the contractor's favor in court, for my understanding your state among others do not allow those types of contracts
We allow cost plus but the contract has to include the total amount of the cost of the build before the job starts.

However with that said, guys are getting around that by calling themselves consultants.


Mike.
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If we all had the cake to cover “ consulting fees” before “ consulting “ became what it is, we’d all be in Jamaica having umbrella drinks (iced tea for me), w/some dirty naked freaks for kickbacks

Mike
 

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We allow cost plus but the contract has to include the total amount of the cost of the build before the job starts.

However with that said, guys are getting around that by calling themselves consultants.


Mike.
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Capping the total eliminates half the reason for cost plus. People with no budget and discerning tastes make changes and don't necessarily want to make all their decisions up front because they don't have to. Some projects they're pretty adamant on the budget limit, which is fine and cost plus just allows them to move stuff around. Less on this and more on that etc


There is no such thing as a capped price for a house or full house renovation though in this world with real contracts, any real contract will have material escalation clauses and as 2020 and 2021 showed us that can be a massive change in cost. You can lower risk by having all selections made and no allowances but it's limited not eliminated. Before 2021 I never acted on the material escalation clause
 
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