What is a real estate referral fee?

A real estate referral fee is the compensation provided to a real estate agent or broker who refers a client to another agent or broker for assistance with a real estate transaction. This fee generally acknowledges the effort and resources involved in connecting the client with the appropriate agent who can facilitate the property transaction.

In practice, referral fees help agents earn income on transactions they are not directly involved in, thus promoting collaboration within the real estate industry. The fee is often a percentage of the commission earned on the transaction resulting from the referral, making it a mutually beneficial arrangement for both the referring agent and the agent who handles the transaction.

Since the roles of marketing a property, closing a deal, and listing a property focus on distinct aspects of real estate transactions that do not specifically cover client referral, those options do not accurately define what a referral fee is.