No no. In most states, the practice of agents paying referral fees or “Finder`s Fees” is illegal unless the person is a licensed real estate agent or attorney. However, documents are required to ensure the collection of the referral fee promised by the other licensee. Here, the Broker Referral Fee Agreement of the first Tuesday is used to prove understanding. [See first form of Tuesday 114] The expelled broker does not receive any additional fees for transactions made by the potential client recruited through the services of the receiving broker. In addition, after the transfer, the expelled broker and his agents do not carry out any activity justifying a fiduciary duty to the potential client. Their participation is limited exclusively to the intermediation of the interested party. As a result, a provision in the referral fee agreement states that the referring broker will not participate in negotiations with the potential client or advise them. Once the referral agreement is signed, the client and the new agent must sign a listing agreement.

What the potential client needs is to be referred to another licensee who is known to be able to provide the brokerage service sought by the potential client. Thus, the licensee making the recommendation may request a royalty from the licensee who is the addressee of the recommendation. Referral fees are earned if the interested party makes a transaction in which the other licensee receives a royalty. Once the client and the recommended agent have been introduced, a recommendation agreement should be signed. This incurs and validates the referral fee, usually 25%, and all other terms of the agreement.