The Sacramento Open House: An Unlicensed Assistant and a Stager's 'Fee'
Your Sacramento brokerage has a busy listing in a competitive market. Your unlicensed assistant, Priya, has been hosting weekend open houses on her own. On Saturday she told visitors the seller 'might take $15,000 under list,' explained that 'the lender is fine with 10% down,' handed out flyers she wrote herself, and asked each visitor whether they had an agent, offering to 'connect them with someone in our office.' Separately, a friend who owns an unlicensed staging company has sent you four seller clients this year and now expects a $2,000 'marketing fee' at the next closing. Priya, tired of hourly pay, has asked to be paid $500 per closed transaction instead. All four of your agents are licensed and in good standing.
1. Which of Priya's activities are prohibited, and why? Which, if any, are acceptable?
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Go activity by activity.
Prohibited.
- 'The seller might take $15,000 under list.' Discussing price or the seller's willingness to negotiate is negotiating terms - licensed activity. An unlicensed assistant may not quote price, discuss financing terms, or discuss anything that induces a decision about the property.
- 'The lender is fine with 10% down.' Advising on financing is licensed activity. Even restating loan terms goes beyond handing out preprinted lender material.
- Writing her own flyers. Advertising for the broker must be reviewed and approved by the broker, and all advertising must identify the broker by name. An unlicensed person may distribute preprinted material, not originate marketing copy.
- Soliciting representation. Asking visitors if they have an agent and steering them to the office is solicitation of clients, which requires a license.
Acceptable. Priya may host the open house, unlock the door, hand out preprinted and broker-approved materials, give factual answers from those materials, and take names and contact information for the broker. She may say she is not licensed and refer substantive questions to you. That script should be in writing, and you should audit the open house sign-in sheets and her statements.
2. May you pay the staging company's $2,000 'marketing fee'? How should Priya be compensated instead?
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The stager's fee. Business and Professions Code 10137 bars a licensee from paying compensation to an unlicensed person for acts requiring a license, and referral of clients is such an act. A payment dressed up as a 'marketing fee' but calculated from client referrals is an unlawful referral fee, and the fact that staging is a legitimate service does not launder it. The test is what the money buys: if the stager is paid fair market value for staging services actually performed, that is permissible; if the payment is tied to or conditioned on sending seller clients, it is prohibited regardless of the label or the invoice. The honest options are to stop accepting referrals from her, or to pay only for documented staging work at market rates and on terms available to any client.
Priya's pay. Paying an unlicensed employee a per-transaction bonus tied to closings functions as a share of commission and violates 10137. Compensate her hourly or by salary, with overtime where applicable, and keep payroll records. A discretionary, non-production-based bonus is safer, but a flat $500 per closed escrow is not.
Also confirm that the flyers carry the brokerage's licensed name and that your written independent contractor agreements do not treat her as an agent.