How to Ask for a Real Estate or Mortgage Referral Fee
Requesting a referral fee is most effective when you address it upfront, as soon as you decide to pass along a potential client. If you’re referring a buyer, seller, or borrower to a colleague, clearly state your expected fee and have them sign a referral fee agreement before making the official introduction. Provide a warm handoff—whether by phone, email, or text—once both parties understand and agree to the terms. This clear approach limits confusion and strengthens your negotiation position.

Typical Referral Fee Amounts

Just like real estate commissions, referral fees vary based on market norms, transaction size, and the nature of the lead. Commonly, the referring party charges around 25% of the gross commission on a successful closing—but this percentage can be higher or lower depending on the value of the property, complexity of the mortgage, or the depth of the relationship. Mortgage referral fees may mirror real estate norms or be adjusted based on the loan amount and local regulations.
Negotiating Your Referral Fee
Securing a fair referral fee requires open communication and clear expectations. Here’s how to negotiate effectively:
- Research Your Market: Typical referral fees range from 10% to 30% of the commission; learn what’s common in your area or industry niche.
- Define Roles: Confirm what each party will do—especially if you, as the referrer, plan to maintain any level of involvement during the transaction.
- Set Expectations Early: Clearly state your fee or percentage at the outset to avoid surprises or disputes later.
- Match Fee to Value: If you’re sending high-value or pre-qualified leads, you have leverage to request a larger share of the commission.
- Document It: Use a written agreement specifying the fee amount and payment timeline.
- Comply with Regulations: Verify referral rules in your state or locality, as some laws limit who can receive fees and how they’re paid.
- Stay Engaged: Maintain contact throughout the deal so both parties honor the agreement once the transaction closes.

How Much Is a Referral Fee in Real Estate & Mortgage Deals?

Referral fees are contingent on a closed deal. If no closing occurs, no fee is owed because the commission itself doesn’t exist. In many jurisdictions, only licensed real estate agents, brokers, or mortgage professionals can be paid a referral fee, so always confirm local guidelines. While 25% of the commission is a standard benchmark, different situations—like retiring professionals licensing out their database or agents referring multiple leads at once—can result in higher or lower percentages.
Finder’s Fee vs. Referral Fee
A referral fee is paid to licensed agents or brokers who introduce a client to another licensed professional. In contrast, a finder’s fee is paid to non-licensed parties (often in states that permit such arrangements) for connecting principals to a potential deal. Be aware of licensing requirements to ensure compliance.

Who Pays the Referral Fee?

In standard real estate and mortgage transactions, the referring professional is compensated by the agent or loan officer who closes the deal. The agreed-upon percentage is deducted from the closing commission before final disbursement. If a third party (e.g., a title company) is involved in funds distribution, they typically issue separate checks—one to the closing agent’s brokerage and another to the referring agent’s brokerage—within a set timeframe (often around ten days post-closing).
Why Pay a Real Estate or Mortgage Referral Fee?
Paying a fair referral fee is a win-win. It:
Strengthens Professional Relationships: Offering a reasonable cut fosters future collaborations and boosts your credibility among fellow agents, brokers, and loan officers.
Minimizes Acquisition Costs: Traditional lead generation can be expensive, and not every lead results in a signed deal. With referral fees, you pay only after you earn a commission.

Structuring Your Referral Agreement

Having a well-crafted referral fee agreement protects everyone involved. It can be as simple as laying out the basics—the referrer, the receiving party, the client’s info, and the fee percentage—but should also specify legal and financial obligations. Many state and national Realtor or mortgage associations offer standardized forms. You may also hire an attorney to draft customized language, especially if you’re dealing with high-value or cross-state referrals.
Must-Have Clauses in a Referral Fee Agreement
Every effective agreement should include:
Referring Party Details: Names, contact info, brokerage, license number.
Receiving Party Details: Names, contact info, brokerage, license number.
Referral Fee Amount: A clear statement of the percentage or flat rate.
Terms & Conditions: Closing timeline, responsibilities, confidentiality, and dispute resolution.
Broker/Agent Signatures: The agreement is binding on the brokerage, so the broker’s signature is typically required.
Client Information: Contact details and any relevant background on the referred lead.
Local Compliance: Statement ensuring the agreement follows all state or national regulations.

Grow Your Referral Network & Boost Deal Flow

Establishing a reliable referral pipeline requires trusted relationships with professionals who share your commitment to superior client service. Leverage networking events, online communities, and industry conferences to forge new partnerships—especially across different markets where your expertise may not reach. By offering a well-structured referral program, you’ll attract like-minded colleagues in real estate and mortgage who can help you scale through high-quality referrals.
Bottom Line: In real estate and mortgage transactions, a well-managed referral system can significantly expand your client base and revenue. By understanding how to ask, negotiate, and formalize referral fees, you’ll create a steady stream of new business grounded in professional integrity and mutually beneficial relationships.