An industry colleague recently made an interesting comment during a conversation we were having about MSAs (Marketing Services Agreements). He was referring to the dynamics between real estate firms and mortgage lenders and he said; “How is this not a RESPA violation? Mortgage guy pays us (realtor), we (realtor) tell everyone to use mortgage guy.” While that may be a pretty uncomplicated description of how MSAs work, it is accurate.
To be fair, the “we” in my colleague’s description would be real state management people, not the rank and file agents’ corps. Agents don’t get to share in MSA spoils because, well, it would not be legal for them to do that. A Marketing Services Agreement outlines broad based marketing initiatives to be undertaken jointly between the real estate firm and the lender. The MSA agreement grants the lender rep full and unfettered access to agents and their buyers and usually includes space in the real estate offices. In exchange, the lender pays the real estate entity a monthly fee based on the “fair market value of marketing and advertising services performed.”…
