How much do I charge for sending out a referral?

Karma. Just (hopefully good) Karma.

I don’t like the feeling when I pay a referral fee (although they do pay the bills occasionally), so I don’t want to transfer that same ill feeling to another agent.

Inspiration for this post – Ardell’s STOP TAKING MONEY FOR REFERRALS!!!

Related reading –

Transparency in real estate fees (or why do I hate referral fees)

Go to Hell, relo company

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  1. Athol Kay May 29, 2008 at 17:28

    I think it really depends on the quality of the referral.

    If someone hands you a ready to move seller, who has spent the last three months cleaning up their property, and understands that pricing is the key to getting buyers and a closed transaction, is that worth nothing to you?

    Given the choice between you making $5 and paying me $1, or you making $0, you’d actually choose the $0 option?

    Now if all these referral leads are simply worthless time/money sinks, then it certainly makes sense to turn the the leads off.

  2. Julie Emery May 29, 2008 at 18:40


    I agree! It makes me feel dirty to ask for a referral fee! It’s not that I don’t want to make a little extra money. Who doesn’t?! But the system has gotten insane and I don’t think it serves the clients’ best interests most of the time. How many agents are fully disclosing that referral fee?

  3. Pavel Dovgalyuk May 29, 2008 at 18:41

    Some relo organizations will even ask for a referral fee if the buyer they originally referred to you decided to employ you in the future as the listing agent. Now that is a strange concept as there is no longer any agency agreement after settlement. Can a relo company really “claim” people and their money?

  4. Landflip May 29, 2008 at 21:04

    I feel like if you are not willing to pay the referral fee then do not take the referral.

  5. Landflip May 29, 2008 at 21:05

    I feel if you are not willing to pay a referral fee then do not take the referral…do your own work!

  6. Jeremy Hart May 29, 2008 at 23:12

    I don’t necessarily mind referral fees all that much IF the referring agent has taken the time to get to know me, my business practices, and provides a lead that is quality. What I don’t want to see is agents just randomly calling whomever pops up on Google first and getting a fee off of that. They’ve done nothing to assure that their referral is being well taken care of, and I know we’ve all seen situations where that’s hurt the consumer AND the referring agent’s reputation.

    Of late what’s REALLY gotten me pissed are the companies who are charging 35-40% fees AFTER contract ratification. Case in point – client went to a company to inquire about their loan program. He signed up for information, which automatically enrolled him in some cashback program. That company then contacted Cartus, who sent my broker a 35% referral fee agreement because they have a “contract” with Coldwell Banker and this lending company. I’ve spent four years cultivating and massaging the individual who referred this client to me, and suddenly some corporation swoops in to take close to two thousand dollars from me? Client asked where his kickback was coming from (let’s be honest, that’s what it is) and I told him “me” … he immediately called the lending company and asked to opt out of the program, and was flatly told no. I have a few thousand dollars in fees outgoing over the next 45 days for two transactions that were in no way, shape or form initiated by the company receiving my money. Shameless.

    These corporate referral programs are out of hand, and they hurt not only the agents but the consumers. In many cases, the consumer doesn’t have a clue what’s happening. It’s a racket, and I think it’s shameful that these corporations are being allowed to offer kickbacks for using their services.

    Excuse me while I step off this soapbox … much better. it’s an issue that obviously hits home with me right now.

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