Referral fee
A payment one licensed brokerage sends another for sending a client. Common when a client moves across state lines. Only licensed brokerages can pay or receive them.
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Part 1 of 4
Why a seller cares
When an agent sends you to another agent, the first is often paid a share of the second's fee. It is between brokerages and it does not raise your cost, though it can shape who you were referred to.
Part 2 of 4
A simple example
Your out-of-state friend's agent refers you to a local agent and receives 25% of that agent's commission at closing.
| What happens | What it costs you |
|---|---|
| A referral fee between brokerages | Nothing extra; it comes out of the receiving agent's fee |
| A referral from an online lead service | The same, and sometimes 30% to 40% |
| Choosing your own agent | No referral fee anywhere |
A referral fee is paid by the agent who took the referral, out of the fee you already agreed to.
Part 3 of 4
What people get wrong
That a referral fee is a kickback to you or from you. Only licensed brokerages can pay or receive one.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines referral fee in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.