Real estate referrals occur when another licensed real estate professional recommends your real estate services to someone looking to buy or sell a property.
What percentage of real estate business comes from referrals?
According to recent statistics, 82% of all real estate transactions come from referrals.
How do referral agents make money?
Referral Agents make money by sending their clients to another agent. The other agent handles the transaction. Because they brought the business to the other agent, they receive a referral fee when the deal closes. It's as simple as that.
How are referral fees calculated?
Referral fees vary based on a number of factors, but a typical fee is usually 25% of the closing agent's take-home commission, i.e., 75/25 split. Again, this number can vary dramatically based on the client, the market, and the amount of work required from both the referring and the closing agent.
Can agents receive a referral fee?
Yes, real estate agents licensed under a real estate broker can receive a referral fee. However, most state laws prohibit the paying of referral fees to unlicensed persons.
How are referral fees paid?
Referral fees are typically paid to the referring agent directly through title at close of escrow.