Pick My Agent™ – For brokers and agents

February 9, 2011

The formulas for calculating the referral fee and the consumer credit

Dear Monty’s “ Pick My Agent ” has been generating high quality referrals for real estate practitioners throughout the United States since 1975. The company shares our 25% side-of-sale referral fee equally with our customer. A Dear Monty Referral Credit™ equals one-half of the total referral fee. Home sellers receive a commission credit, home buyers receive a reduction in the purchase price.

To calculate the buyer credit on a home purchase, multiply the home’s purchase price by .00375. The answer equals the buyer’s credit, to be subtracted from the purchase price. [sale price] x [.00375] = [½ of a 25% side-of-sale referral]

To calculate the seller credit on a home sale, multiply the total commission amount by .0625. The answer equals the amount of the seller’s credit, to be subtracted from the total commission. [total commission] x [.0625] = [½ of a 25% side-of-sale referral]

Dear Monty’s net referral is the other ½ of a 25% side-of-sale referral. It is .00375 of the home purchase price for a buyer referral, and .0625 of the total commission for a seller referral. These formulas are an accurate shortcut that delivers the dollar amount on a 25% side-of-sale referral. The formulas are accurate for all home prices and all percentage-based commissions.

The homeseller referral agreement states:

You agree to pay Dear Monty, LLC., .00375 percent of the sale price for the seller referral in connection with this transaction. You agree that payment shall be made without setoff or deduction. The following language shall be included in the listing contract, “ Listing broker also agrees to reduce the commission to the seller by .0625 percent to reflect a courtesy credit to seller.” This is one referral, which is a home SELLER referral in the [municipality, state] area.

The home buyer referral agreement states:

You agree to pay Dear Monty, LLC,.00375 percent of the sale price for the Buyer referral in connection with this transaction. You agree that payments shall be made without setoff or deduction. You also agree to instruct the referred buyer to include the following language in the offer to purchase. “ This agreement is subject to the contract purchase price being adjusted downward after the final sale price is negotiated by .00375 percent to provide a referral fee credit to buyer. Listing broker agrees to adjust the seller’s commission down by .0625 percent to maintain seller’s net price the same as before the purchase price adjustment.” This is one referral, which is a home BUYER referral in the [municipality, state] area.

Buyer Credit Examples (does not include Dear Monty’s referral)

Sale price of home Calculation – .00375 Amount of credit Adjusted sale price
$230,000 $230,000 x .00375 $862 $229,138
$300,000 $300,000 x .00375 $1,125 $298,875
$500,000 $500,000 x .00375 $1,875 $498,125

Formula: [sale price] x .00375 = [buyer credit]

Seller Credit Examples (does not include Dear Monty’s referral)

Commission amount Calculation – .0625 Amount of credit Adjusted commission
$13,800 $13,800 x .0625 $862 $12,938
$18,000 $18,000 x .0625 $1,125 $16,875
$30,000 $30,000 x .0625 $1,875 $28,125

Formula: [commission] x .0625 = [seller credit]

What do I do to be considered?

  • Here is a link to the “ Pick My Agent™ “ program the customer sees for you to review.
  • Here is a link to the agent questionnaire for you to complete. Just hit the blue “ submit ” button on the bottom of the form and you are done.

The questionnaire asks for your managing broker’s name, email address, and office address. We will email the referral agreement directly to that address through SignNow.com. When we receive the questionnaire back from you, and the referral agreement back from your designated broker, we will release your information to the client and release the client’s information to you. You may want to alert your broker to watch for the SignNow.com referral agreement, as receiving it will be his or her first exposure to it, and it confirms to them your willingness to participate. A quick way to do this is to forward this link.

If you or your broker have any questions, please email monty@dearmonty.com, or text or phone 920-321-4235.