01Plain-English meaning
In agent-to-agent referrals, the referral fee is commonly discussed as a percentage of the receiving agent's commission, not the sale price. The actual fee should be agreed in writing and handled through the brokerages involved.
02Why it matters
- It sets the economics before the client handoff.
- It helps both brokerages understand payment timing and responsibility.
- It reduces disputes after a closing when commission is already being distributed.
03Example
An agent in Denver refers a buyer moving to Austin. The Austin agent agrees to pay a 25% referral fee from their gross commission if the referred buyer closes.
04Frequently asked questions
Is a 25% referral fee required?
No. It is common, but not required. The percentage should be agreed in writing and must comply with brokerage policy and applicable rules.
Who pays the referral fee?
The receiving side typically pays from commission after closing, but the written agreement should define who pays, how it is calculated, and when it is due.