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| The Real Estate Encyclopedia |
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| How Does A Broker Referral Work? |
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| Category - Home Selling FAQ's - Agent, Offer & Commissions
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When one broker refers a client to another broker, the transfer is known as a referral. Referrals can occur from state to state or from one area of a state or county to another. Often, a seller may have a standing relationship with a real estate broker who he/she has worked with in the past. If this seller decides to sell a property outside the area or state the agent provides services in, the agent can refer the client to a local broker in the area the seller owns the home. Typically, the agents will sign a referral agreement, which provides that the receiving broker will pay the referring broker a percentage of any commission generated by this transaction. The seller’s total commission rate or fees are not affected or increased by this arrangement and the receiving broker is required to pay the agreed-to fee after closing.
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