In short, a Real Estate Referral Brokerage is a lower-cost brokerage that helps agents keep their license active for referrals. This type of brokerage and its agents doesn’t take active role in the actual transactions representing buyers or sellers. Instead, they connect the clients with an agent in a different brokerage to assist the client.
In brief, some of the benefits for agents to join a Real Estate Referral Brokerage are:
While there are many more benefits, let’s just elaborate on these four below.
Under Florida Law you must have an Active Real Estate License under a broker to be legally able to get paid commissions from real estate referrals. Furthermore, License holders can only receive compensation from their “employer”. In other words, their broker. With this in mind, Real Estate Brokerages are prohibited from compensating you for real estate services or your referrals unless you are you are active under that brokerage.
Since you will be referring to other agents who belong to a brokerage, that brokerage will have to send your compensation through your brokerage. So, unless you are an independent licensed broker, you will need to be “active” or registered under a brokerage to be able to get paid. A Real Estate Referral Brokerage might be the most cost-effective option.
Basically, as a referral agent with a referral brokerage, you won’t be actively assisting clients with showings, listings, and all those activities that require many systems and tools. As a result, you can let go of the expensive associations and fees for systems you won’t be using. Especially all those expensive Realtor® Association fess, MLS fees, Supra, and other subscriptions can be cancelled when you join a referral brokerage. And don’t feel bad. Above all, all business owners cut down the cost they don’t need. Especially during low markets.
Since most Referral Brokerages have much lower operating costs, they can also lower the fees charged to agents. So, even more savings for your pocket! With our referral brokerage, a simple annual fee can help you keep your license active. In addition, we even include your Florida Sales Associate Post-Licensing and Continuing Education (CE) courses in our Standard+ and Elite+ plans. You certainly save a lot of money with us! Check out our PRICING PAGE HERE.
When you send a referral to an active agent, that agent is the one to provide the service that leads to their compensation and also yours! We recommend referral agents to do some follow-ups to ensure their clients are in good care. However, referral agents have their hands free to focus on other things. For example, traveling, vacations, more networking.
Because that agent gains a new client he/she wouldn’t have without you, he/she is happy to pay you a referral fee. Surely a win-win situation for both!
The main difference between a referral brokerage and a regular real estate brokerage is that the referral brokerage doesn’t take part in the actual transaction assisting buyers or sellers while a regular brokerage and its agents does represent buyers and sellers in their transactions. With this in mind, referral brokerages can usually operate with low overhead cost to give agents lower fees.
Another difference is that referral brokerages only retain agents that are not actively assisting buyers and sellers. Most regular brokerages are members of the Realtor® Associations, but referral brokerages are not.
To summarize the differences, the table below shows a side-by-side comparison of a referral brokerage vs a regular brokerage.
| Referral Brokerage | Regular Brokerage | |
|---|---|---|
| Agent's License remains active as Licensed Professionals | ||
| Agents can refer clients to others and get paid. | ||
| Associates must complete the required Post-Licensing and CE Education | ||
| Agents can later become Brokers or Broker-Associate | ||
| Brekerage is a member of the Realtor® Association | ||
| Requires agents to join NAR. | ||
| Broker carries E&O Insurance for transactions with buyers and sellers. | ||
| Expensive costs for CRM, lead-generation, marketing and other systems | ||
| Goes on showings and listing appointments | ||
| Prepares contracts and assist clients with all transaction's tasks. |
Considering what we just covered, the answer will depend on your personal situation and goals. Generally, if you are not assisting any clients at the moment and will be focusing on other activities, it might be wise to join a Real Estate Referral Brokerage. Without a doubt, a real estate referral brokerage helps you save money in many ways and still have your license active.
Furthermore, if you would like to be able to legally collect commission for referring the people you know to other agents, you must be registered under a brokerage. With both the referral brokerage and a regular brokerage you are able to get paid for your referrals. However, if saving money is important and you are not assisting clients, then a Real Estate Referral Brokerage might be best for you.
So, if you believe a Real Estate Referral Brokerage is for you, CLICK HERE to join us! Now, if you are actively assisting clients or have that goal, make sure you check our main full-service brokerage at JoinYourHomePlus.com
Real Estate Broker, Instructor and Founder of the Your Home Plus Companies with the vision of positively transforming the real estate industry so that the consumer have more trust and loyalty in real estate professionals and that real estate professionals have a higher success rate in the industry.
