General Referral Fee Policies
What is a referral fee and why pay one (or why not)?
The purpose of a referral fee is to reward or compensate someone for an exchange of service or other value. Referral fees are often paid when one agent brings a client to another agent, or when two agents work together on the common goal of bringing a client to close on a transaction (they may share a commission in the form of a referral fee). Referral fees are not rebates and are not paid to persons just because they are eligible by law to receive a referral fee — service must be performed or value must be exchanged. Amounts of referral fees are negotiable, but this represents my policy.
Situations where referral fees may be paid
- Bringing a client: If you are a licensed real estate agent, I may pay you a referral fee for bringing me your buyer-client who purchases a property through me or for bringing me your seller-client who lists their property with me. The referral fee would likely be a percentage of any commission earned and paid on a single transaction.
- Providing property locating services: If you are a licensed real estate agent from Florida but you are outside of my geographic service area and you need assistance in locating a property for your buyer-client in my local area, I will charge you a referral fee for doing research and/or locating properties for you and your clients. Referral fees are negotiable and may be a percentage of a commission you earn on a transaction or may be a set fee. If you are a licensed real estate agent but not licensed in Florida, you may not perform real estate actions in Florida and you may not receive a commission for selling a property in Florida, so please see above paragraph titled “Bringing a client”.
Situations where referral fees may NOT be paid
- Not licensed: If you are NOT a licensed real estate agent, I cannot and will not pay you any referral fees for any real estate actions including referring to me your clients, family or friends, or for locating properties. Florida law prohibits the paying of any referral fees or other gifts to non-licensed persons for real estate actions, including the referral of clients.
- Rebates: I do not provide “rebates” or share commissions with buyers who purchase directly through me whether or not they are licensed real estate agents. Such rebates would have to be disclosed to your lender (for the transaction) so as not to commit fraud with your lender. Such payments would not be an exchange for a service, but would merely be a discount or rebate. One cannot refer oneself.
- Old clients: If you are a licensed real estate agent and a prospect you have worked with comes directly to me — you do not present them to me and I’m not soliciting them away from you but they responded to a general advertisement or an Open House and they did not disclose to me that they are working with you or they tell me that they are not working with another agent — then I will assume that they are not really working with you or no longer working with you and I will pay no referral fee to you.
- Licensed but buying for self: If you are a licensed real estate agent but not from this area and wish to purchase a home, second home, or investment property for yourself or spouse, and you are not familiar with my area and need assistance in locating a property, then you are really a client and not a real estate agent for the transaction. In this case, you would not be eligible for a referral fee.
Sharing my commission
I am a real estate agent licensed in Florida and provide valuable services and information to my clients. I earn my commissions through my hard work, thoroughness, diligence, abilities and experience. I don’t get paid just for “doing work” but get paid only when I provide valuable service to another person and a transaction is finally closed. I willingly share my commissions with others who provide valuable services to me that help me to increase my business. I do not share my well-earned commission “just because”. You wouldn’t pay me some of your paycheck just because I’m your friend, or just because I asked you — would you? You’d require that I provide some benefit to you or I helped you to make that paycheck. My referral policy is based on the natural laws of exchange and what is fair and right.
If you would like to refer a client or need my services, please contact me.
Disclaimer: This policy is not an interpretation of the law, but is my business policy.