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Referral Realty – Real Estate’s Somewhat Hidden Gem April 18, 2023

Real estate referrals are a vital component of the real estate industry. Referral agents function like an agent’s agent; they introduce clients to active agents and, in return, receive a finder’s fee from that agent. In this article, we will discuss in detail how all this works.

An Introduction to Referral Realty

Real estate referral agents are licensed professionals who specialize in bringing clients to other active real estate agents. They are affiliated with real estate brokerages but do not list or locate properties for clients. Instead, they find an active agent for their clients to work with.

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How Referral Agents Work
You’ll work with both listing (seller’s) agents and buyer’s agents. The size of their referral fee depends on a variety of factors, but the fee usually ranges from 10% to 50% of the total commission received. A 25% fee from the buyer’s or seller’s agent is fairly common.

Step 1: Referral Request
The process usually begins with a request from a potential client who needs a real estate agent. You will then gather information about the client’s needs and preferences, such as their budget, the type of property they’re looking for, and the location they’re interested in.

Step 2: Agent Search
You’ll use your knowledge of the local market and their network of contacts to find an active agent who meets the client’s needs. They also consider the agent’s expertise, track record, and personality to ensure a good match between the agent and client.

Step 3: Referral Agreement
Once you find an active agent for the client, they enter into a referral agreement. This agreement outlines the various, including the fee, the duration of the agreement, and the responsibilities of each party.

Step 4: Agent Referral
You’ll then transfer the client to the active agent. The active agent takes over and begins working with the client directly. You back and allow the active agent to handle the transaction.

Step 5: Commission Payment
When the deal closes, the active agent Brokerage pays the agreed-upon fee to your Brokerage. This fee is usually a percentage of the commission earned by the active agent. The referral agent receives their commission, which completes the transaction.

Benefits of Using a Referral Agent
For clients, referral agents provide access to a network of pre-screened agents with a proven track record of success. Such agents can also save clients time and money by finding an agent who is the right fit for their needs.

For active agents, referral agents provide a steady stream of new clients. They also save agents time and money by pre-screening clients and ensuring that the client is a good match for the agent’s expertise and experience.


1. What is a real estate referral agent?
An agent is a licensed professional who refers clients to active real estate agents in exchange for a finder’s fee.

2. How does a referral agent get paid?
They receive a finder’s fee from the active agent they referred, which is usually a percentage of the commission.