How are referral fees paid and documented?
Short answer: Referral fees are paid brokerage to brokerage and must be documented with an executed referral agreement and proof of payment.
Referral fees are compensation paid for introducing a buyer, seller, or other party to a transaction without providing representation. Even though the involvement is limited, referral transactions must still be fully documented for compliance and record retention purposes.
How referral fees are paid
All referral fees are paid brokerage to brokerage. A referral fee is never paid directly to an individual agent whose license is not associated with the paying brokerage’s license. This structure ensures compliance with Florida law and proper brokerage oversight.
Referral fees are commonly paid at closing through the settlement process and reflected on the closing statement or handled through brokerage disbursement after closing, depending on the referral agreement. In all cases, the payment must be clearly documented.
Required documentation for referral fees
A complete referral transaction file must include a fully executed referral agreement outlining the referral terms and fee structure. The file must also include documentation showing how and when the referral fee was paid, such as a closing statement, commission disbursement authorization, or brokerage accounting record.
Referral fees at closing
When a referral fee is paid at closing, the payment should be reflected on the closing statement or supported by a CDA showing the disbursement. This documentation becomes part of the transaction file and serves as proof of compensation.
Referral fees paid outside of closing
If a referral fee is paid outside of closing, written proof of payment must still be retained in the transaction file. This may include brokerage accounting records or other documentation showing the date, amount, and recipient of the referral fee.
Common mistakes
Agents sometimes fail to upload the executed referral agreement, rely on verbal referral arrangements, or omit proof of payment from the file. Referral compensation must always be supported by written agreements and payment documentation.
Rule of thumb
If you received compensation for making a referral, your transaction file must clearly show the referral agreement and how the referral fee was paid.
Compliance reference
This guidance is based on Florida Statute § 475.5015 and Easy Realty’s internal compliance standards, including compensation documentation and record retention requirements for real estate transactions.