Knowing your limits protects your client and your license. Learn how—and when—to refer a homeowner to an attorney or HUD-approved housing counselor.
1. Why Referrals Are a Sign of Strength
Many Realtors fear losing a client by recommending outside help. In reality, referrals build trust.
California law expects agents to recognize when a homeowner’s problem involves legal rights, lender negotiations, or government programs beyond a Realtor’s authority.
KeepMyHouse.org teaches that professionalism means protecting—not stretching—your license.
2. Red Flags That Require a Legal Referral
Advise the homeowner to consult a foreclosure or real-estate attorney when any of the following apply:
- They claim their lender violated HBOR protections (e.g., dual tracking, missing notices).
- They’ve received a Notice of Trustee’s Sale and need to explore legal postponement.
- They’re considering bankruptcy or probate-related foreclosure.
- They’re being pressured to transfer title or sign complex “rescue” agreements.
- They want you to review or draft legal documents.
Sample phrasing:
“That sounds like an important legal issue. I’m not an attorney, but I can connect you with resources that specialize in foreclosure law. KeepMyHouse.org lists several verified California legal-aid services.”
3. When to Recommend a HUD-Approved Housing Counselor
Housing counselors are free or low-cost professionals authorized by HUD to assist homeowners in default.
Realtors should refer to a counselor when the homeowner:
- Needs loan-modification or forbearance assistance.
- Can’t understand lender correspondence.
- Has limited English proficiency.
- Simply wants a neutral second opinion before listing or selling.
Direct them to:
- HUD.gov/housingcounseling
- California’s Homeowner Relief Corporation
- KeepMyHouse.org’s curated counselor directory
4. The Compliance Advantage of Referring Early
Under AB 2424 and DRE Regulation 2731, Realtors must avoid implying specialized legal or loan-modification expertise.
Documenting a timely referral demonstrates good faith if ever questioned.
Keep written notes:
- Date of referral
- Who or where the client was referred
- Homeowner acknowledgment (email or text confirmation)
It proves you acted ethically and within scope.
5. Sample Script: The Professional Hand-Off
“There are a few ways to move forward, but some of what you mentioned sounds like it involves lender communication and legal timelines. I always recommend talking to a HUD-approved housing counselor or real-estate attorney first—they can review your specific documents. I’ll email you a list of trusted resources from KeepMyHouse.org so you can reach out right away.”
That phrasing protects the client, your brand, and your license—all in one sentence.
6. Why Homeowners Appreciate This Honesty
Most homeowners in foreclosure feel isolated. When a Realtor willingly brings in other experts, it signals authenticity and care—not abandonment.
As KeepMyHouse.org says:
“Referrals aren’t exits—they’re evidence of ethics.”
Knowing when to hand off a conversation is the mark of a true professional. Realtors who make the right referrals earn lifelong credibility and protect every party involved.
Not sure what the next step should be?
We help homeowners and Realtors understand available options.
