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Short answer: a referral fee is a share of the receiving agent's side of the commission, paid broker to broker at closing under a signed agreement. No law sets the percentage. It's whatever the two brokers agree to in writing. The fee is figured on the side commission, not the sale price.
The math
- Side commission = sale price × the receiving agent's side rate
- Referral fee = side commission × referral %
- Receiving agent's gross = side commission − referral fee, and then their brokerage split comes out of that
Worked example (example numbers, not typical rates)
| Line | Amount |
|---|---|
| Sale price | $400,000 |
| Receiving agent's side at 2.5% | $10,000 |
| Referral fee at 25% | $2,500 to the referring brokerage |
| At 30% | $3,000 |
| At 35% | $3,500 |
| Referring agent's check | $2,500 minus whatever split the referring agent's own brokerage takes |
Run your own numbers in the commission split calculator. It takes the referral fee off first, then your brokerage split and fees.
What the law says
- Federal (RESPA): Section 8 bans paying for referrals of settlement services on most mortgaged deals. Regulation X § 1024.14(g)(1)(v) carves out payments under cooperative brokerage and referral arrangements between real estate agents and brokers. The CFPB says that exemption covers only fee splits between parties acting as real estate brokers, not between brokers and mortgage brokers.
- So never take a referral fee from a lender, title company or inspector. That's the kickback Section 8 bans.
- State law: who can be paid is set by your state's license law. Fees normally go to a brokerage, not to you personally, and paying an unlicensed person for a referral can break your state's rules. Ask your broker before promising anyone a fee.
- Out of state: you can usually refer to an agent in another state through your brokers, but you can't do licensed work there. That means no showing, negotiating or advising in that state.
Referral agreement checklist
Get it signed by both brokerages before you hand over the client's contact info:
- Both brokerages and both agents, with license numbers
- Client name, and whether they're buying, selling or both
- Referral percentage and what it's figured on (the receiving side's gross commission)
- How long the referral lasts (for example, 12 months) and whether it covers more than one deal
- When the fee is paid (at closing, through the settlement agent if possible)
- Status updates (for example, every 30 days)
- What happens if a relocation company also takes a fee
Most associations and brokerages have a standard form. Use it rather than writing your own.
Subject: Buyer referral to [city]: [client first name], [timeline] Hi [Name], I have a [buyer/seller] moving to [city] around [month]. [One line on budget, area or home type, shared with the client's OK.] I'd like to refer them to you at [X]% of your side, broker to broker, paid at closing, with a 12-month term. If that works, I'll send our brokerage's referral agreement for both brokers to sign, and I'll introduce you once it's back. [Your name] [Brokerage] · [license #] · [phone]
General information, not legal or tax advice. Referral rules differ by state, so check with your managing broker.
Sources
Checked Oct 28, 2026.
Related
- Commission split calculator: your take-home after a referral fee and split.
- Zillow Preferred fee calculator: what a Zillow referral-fee deal pays.
- Income goal calculator: how many deals you need after fees.
FAQ
How much is a typical real estate referral fee?
No law sets it. The two brokers negotiate it and put it in writing as a percentage of the receiving agent's side. Ask your managing broker what your office normally agrees to, and run a few percentages through the math above.
Can a real estate agent pay a referral fee to an unlicensed person?
That's set by your state's license law, not by federal rules. RESPA's exemption covers fee splits between real estate agents and brokers. Check with your managing broker first.
Is the referral fee based on the sale price or the commission?
On the commission, specifically the receiving agent's side. At a 25% fee on a $10,000 side, the referral fee is $2,500.
Can I get a referral fee from a lender or title company?
No. RESPA Section 8 bans fees for referring settlement service business on federally related mortgage loans. The exemption is only for cooperative brokerage arrangements between real estate agents and brokers.