Jenna's firm in Lexington issues a check to First In Line Title Company because it referred a buyer to Jenna. What type of transaction does this represent?

The situation described involves Jenna’s firm issuing a check to a title company as a result of a referral. This transaction does not adhere to conventional practices in real estate and can potentially violate ethical guidelines or laws governing real estate transactions.

In real estate, a referral fee is typically paid to licensed agents who bring business to another agent, broker, or service provider in a manner that's legally defined and compliant with applicable laws. If a firm pays a check to a title company for simply referring a buyer without proper licensing or without the transaction meeting the legal requirements for referral fees, it can be considered an illegal kickback.

An illegal kickback typically refers to payments made in return for a referral which are not compliant with real estate regulations. In many jurisdictions, paying or receiving kickbacks can lead to penalties or loss of licensure. The specific nature of the transaction—as described—with a check issued solely for a referral, instead of through a duly established reporting mechanism, indicates that it doesn’t constitute a proper referral fee, thus qualifying it as an illegal kickback.

In contrast, options such as a legal referral fee would require documentation and compliance with legal standards. A legitimate business expense implies validity and routine costs incurred in the operation of a business, while a commission payment