A real estate referral form is a short written contract between two brokerages that sets the fee one will pay the other for sending a client over. To use one, you fill in both brokerages and their license numbers, the client’s details, the referral fee percentage, a protection period, and payment terms, then both brokers of record sign it and the referring side delivers it to the receiving side before the client is handed off. Get the fields right and the fee gets paid automatically at closing. Leave gaps and you may be chasing money months later with no enforceable claim.
What the Form Has to Contain
Referral agreements usually run one to three pages. Enforceability turns on a handful of specific terms, and skipping any of them invites a dispute when commission checks are cut.
- Brokers of record. Full legal names, brokerage names, office addresses, and active license numbers for both the referring and receiving brokers. The contract binds the brokerages, not the individual agents, so broker-level information is what counts.
- Authorized agents. Names and contact details for the individual agents on each side. Listing them prevents confusion if an agent leaves the brokerage before the deal closes.
- Client information. The client’s full legal name, phone, and email, plus whether they are buying, selling, or both, and the area or property type. More detail here means less room for the receiving side to argue the referral was too vague to honor.
- Referral fee. Expressed as a percentage of the gross commission the receiving brokerage collects. Twenty-five percent is the most common rate; fees run roughly 20 to 35 percent depending on the relationship and the deal’s complexity, and they are fully negotiable.
- Payment timing. When the receiving brokerage pays after closing, typically within a set number of business days. Many forms state the fee is payable only on a successful closing, which protects the receiving side if the deal falls through.
- Protection period. A window, often six to twelve months from signing, during which the referring brokerage earns the fee if the client closes with the receiving brokerage. Without this clause, a receiving agent could wait out the agreement and owe nothing.
- Agent reassignment clause. A provision stating that if the receiving brokerage reassigns the client to a different agent inside the same firm, the fee obligation survives. This prevents the receiving side from dodging the fee through an internal shuffle.
Filling It In
Most agents pull a template from their local MLS, state Realtor association, or their brokerage’s transaction management system. There is no federally mandated form; any written agreement that covers the terms above will work.
Start with the brokerage blocks. Enter the referring broker’s legal name and license number on one side and the receiving broker’s on the other. Verify license numbers against your state’s online license lookup. A transposed digit creates headaches at closing when the title company cross-references it. Below the brokerage information, add each agent’s name and direct contact details so both sides know who is handling day-to-day communication.
Move to the client section. Use the client’s full legal name, not a nickname, along with phone, email, and a brief description of what they need. “Buyer looking for a three-bedroom home in the $400,000–$500,000 range in Cook County” is far more useful than “buyer referral.” The more specific the description, the harder it is for anyone to later claim the referral was too vague.
Fill in the fee next. Write the percentage as a numeral and spell it out, like “25% (twenty-five percent),” to eliminate ambiguity. Specify that the fee is calculated on the gross commission the receiving brokerage earns, not the net after the brokerage’s internal split with its agent. Set the protection period in months and pick a length both sides can live with. Six months covers most residential deals; commercial transactions or relocations may warrant twelve months or more.
Signing and Sending It
Because the agreement is between brokerages, both brokers of record must sign. An agent’s signature alone is not enough. The referring agent presents the completed form to their broker for review and authorization first, then sends it to the receiving brokerage. Email, a transaction management platform like Dotloop or SkySlope, or any method that creates a timestamped record of delivery works.
Electronic signatures are legally valid here. Under the federal E-SIGN Act, a contract cannot be denied enforceability solely because it was signed electronically.1Office of the Law Revision Counsel. 15 U.S.C. 7001 – General Rule of Validity A typed name at the bottom of an email is still weaker than a signature captured through a dedicated e-signature platform like DocuSign or Authentisign, where the signer’s identity and intent are logged automatically. Use a proper e-signature tool when you can.
Once both brokers have signed, the agreement is fully executed. Each brokerage should save a copy in its transaction file immediately, not after closing.
Getting Paid at Closing
The referring brokerage typically gets paid one of two ways. The title company or escrow officer disburses the referral fee directly from the commission proceeds on the settlement statement, or the receiving brokerage collects its full commission and then pays the referring brokerage within the number of business days the form specifies. The first method is cleaner because it avoids any post-closing collection effort. If your form allows it, instruct the closing agent to split the disbursement at the table.
When a Referral Fee Is Actually Legal
The legal framework traces back to the Real Estate Settlement Procedures Act. Section 8, codified at 12 U.S.C. § 2607, broadly prohibits paying or accepting any fee or kickback for referring business connected to a federally related mortgage loan.2Office of the Law Revision Counsel. 12 U.S.C. 2607 – Prohibition Against Kickbacks and Unearned Fees Read in isolation that sounds like it would ban all referral fees. It does not.
The exception that keeps the referral system running sits in the implementing regulation. The Consumer Financial Protection Bureau’s Regulation X explicitly permits payments made under cooperative brokerage and referral arrangements between real estate agents and brokers, so long as all parties are acting in a real estate brokerage capacity.3eCFR. 12 CFR 1024.14 – Prohibition Against Kickbacks and Unearned Fees A licensed agent referring a client to another licensed agent, with the fee paid between their brokerages, is legal. An unlicensed friend, former client, or finder getting a cut for the same introduction is not.
Penalties are steep. A person who pays or accepts an illegal referral fee faces a criminal fine of up to $10,000, up to one year in prison, or both.2Office of the Law Revision Counsel. 12 U.S.C. 2607 – Prohibition Against Kickbacks and Unearned Fees On the civil side, the person overcharged for the settlement service can sue for three times the amount of the charge, and courts can award attorney fees to the winning party.
Do You Have to Tell the Client
Under current NAR rules, broker-to-broker referral fees do not have to be disclosed to the consumer. A 1999 interpretation exempted agent-to-agent referral fees from the disclosure provisions of NAR’s Code of Ethics, and a November 2025 vote to reverse that exemption fell just short of the required two-thirds supermajority. No national ethical rule currently compels disclosure, though the issue may be revisited at NAR’s midyear meetings in May 2026.
Federal law adds a layer when the referring party has an ownership interest in the company receiving the referral, such as a brokerage that owns a title company. In that situation, RESPA requires a written Affiliated Business Arrangement disclosure given to the consumer at or before the time of referral, describing the relationship and estimating the provider’s charges. A standard agent-to-agent referral between unrelated brokerages does not trigger that requirement, but agents whose firms have affiliated settlement service providers need to know the line.
Even where disclosure is not legally required, telling the client builds trust. A client who later learns that part of “their” commission went to someone they never met is rarely happy about it.
After Closing: Taxes and Records
Referral fees are taxable income to the brokerage that receives them. For payments made in 2026, the IRS requires a Form 1099-NEC for nonemployee compensation exceeding $2,000 in a calendar year, up from the previous $600 threshold.4Internal Revenue Service. Publication 1099 (2026), General Instructions for Certain Information Returns Beginning in 2027, the $2,000 figure will be adjusted annually for inflation. A fee under the threshold still generates taxable income even though no 1099 is filed. Keep the executed referral agreement with your tax records so you can substantiate the payment if the IRS asks.
Every state real estate commission sets its own rules for how long brokerages must keep transaction files, and referral agreements fall within those requirements. The typical range runs from three to seven years. Check your state’s licensing board for the exact period. A violation can result in fines or disciplinary action during an audit years after closing. Store both a digital and a physical copy if your state has not moved fully to electronic record-keeping.