A referral real estate agent is an individual who have an active real estate license but do not conduct any real estate transactions for buyers and sellers themselves. Instead, they refer their real estate business to active agents or full time agents in the form of real estate referrals and earn a percentage of the active agent’s commission from real estate sales as a referral fee.
For most referral real estate agents, your business will consist of generating real estate leads and giving those leads out to a full service agent who will actually conduct the transaction and represent that client in return for a portion of the commission that they earn.
There are plenty of reasons why someone would become a referral real estate agent and in this article, we are going to cover why you would want to become a referral real estate agent and what is the #1 best referral real estate brokerage that referral only agents should join!
Who Should Become a Referral Real Estate Agent?
As we mentioned earlier, plenty of individuals and existing real estate agents want to become referral real estate agents only. There are a multitude of reasons why someone would want to become a referral only agent but here are a few of the most common ones.
Individuals Wanting to Earn Extra Income
A lot of individuals get their real estate license so that they can become for the most part referral only agents so that they can earn a little extra income on the side on top of what they are already earning in their full time job or business in a different industry.
These individuals usually don’t have the time to devote to a full time career as a practicing real estate agent or don’t want to spend the time or effort representing clients. Usually these people have a big network and lots of people to refer to other agents who are either looking to buy or sell a home.
Real Estate Agents or Brokers Who Are Retiring
Sometimes real estate agents or brokers who are at the end of their careers will choose to become a referral real estate agent instead of fully retiring from the business because they have gathered a large database of past clients in their career that they still wish to leverage after they have retired from actively selling real estate.
A lot of top agents want to continue leveraging their success as a referral real estate agent by referring their past clients out to their own network of real estate professionals and build a nice stream of passive income for their retirement. This way they can keep their real estate license active instead of putting their license in inactive status and continue to earn income from the book of business that they have built when the sun’s setting on their careers.
New Real Estate Agents
A lot of new real estate agents who are looking to pursue a successful career in real estate choose to hang their license in referral status first before becoming a full time agent because they want to first learn the lead generation side of the business.
Just like how most real estate investors start out as wholesalers so they can learn how to generate qualified leads and learn the ins and outs of the business, new licensees may also want to consider becoming a referral real estate agent first so they can spend their time on the lead generation side of the business and master that skill.
Another reason why a new real estate licensee should consider becoming a referral real estate agent is so that they can save money on business expenses in the beginning of their careers.
Full time and full service real estate agents who represent clients in a transaction are required by most brokerages to join the national association of realtors so that they have access to the MLS to search for properties for sale for home buyers as a buyer’s agent and list properties for sale as a seller’s agent.
What most new real estate agents don’t know is that there are annual mls dues and membership dues to be a part of the national association of realtors. For a brand new agent just starting out who is not earning any income from real estate yet, the mls fees and realtor fees can add up. Becoming a referral agent is a way to join a brokerage to learn the business without having pay those additional fees.
What Is A Referral Real Estate Brokerage?
Now that we’ve covered some of the reasons why you might want to become a referral real estate agent, let’s go over what a referral real estate brokerage is and why it is important for you to choose the right one to join.
A referral real estate agent must hold an active license in any one of the 50 states and be able to refer clients and earn real estate referral fee from agents in any state including their own. But a referral real estate agent must also be sponsored under a real estate brokerage so that their activities are overseen by a licensed broker.
This means that in order to practice real estate, even as a referral only agent who only generate leads and refer them out to other agents, you must be sponsored by a real estate brokerage. For a referral real estate agent there are traditionally 2 options…
Option #1 – Join a Full Service Brokerage
Sometimes, a referral real estate agent will join a full service brokerage such as a franchise market center or a boutique independent brokerage and pay the same fees and splits as a normal agent simply because they need a place to hang their license. Although they are able to receive more training, more support, and even the opportunity to become a full time agent someday, they are usually paying for a suite of tools that they will not need immediately and will have to join a realtor board, which means they will have to pay MLS and Realtor board fees.
Option #2 – Referral Only Brokerage
In recent years as more and more people decide to become referral agents only, we have seen a number of “referral real estate brokerages” pop up in all 50 states. A real estate referral brokerage is a licensed real estate brokerage that sponsors agents who only wish to refer real estate clients and not participate actively as an agent in the transaction.
Most of the time, these referral real estate brokerages charge a small monthly fee to the referral real estate agent to hang their license with them, and take a portion of the referral commission as a split.
Although these referral real estate brokerages are a good option for referral agents looking to save money, allowing them to hang their license in a shop that does not require realtor board or MLS membership with lower fees and more favorable splits, these referral only brokerages provide little to no support for the agents and usually you are left completely on your own to navigate how to generate clients and even write up a referral agreement.
Now that you know why referral real estate agents need to join a brokerage and what the two traditional options are, let us introduce you to a new third option that is literally the best of both worlds. A brokerage option literally made for the referral real estate agent that not only provides a generous and cost friendly fee structure, but also gives you access to a full suite of trainings, tools, and resources that most full service brokerages don’t even provide.
The #1 Best Brokerage For A Referral Real Estate Agent
The #1 best brokerage for a referral real estate agent is eXp Realty. More specifically, the eXp Referral Division. The eXp Referral Division is the perfect solution for agents who want to keep their active real estate license, but don’t want to be involved in the day-to-day activities of traditional real estate. It is where agents can refer potential clients to other agents for a fee or percentage of the earned commission.
The eXp Referral Division is a division of eXp Realty that allows agents who want to hang their license in referral status only to take advantage of select tools provided to all agents at eXp Realty without paying a full monthly fee or joining a MLS or Realtor Board. For a referral real estate agent who wants to have access to modern real estate tools to help them generate business, and an opportunity to advance their careers in the real estate industry, eXp Referral Division is the best brokerage to join and here are a few reasons why…
Low Monthly Fee and Fair Splits
In order to join the eXp Referral Division, the only monthly or ongoing fee that you have to pay is only $50 a Month. As compared to the full service eXp Realty model for active practicing agents at $85 a Month. But along with that you will have access to all tools that any eXp agent will have aside from a fully built out CRM and lead generation website through KVCore.
The commission split for referral real estate agents at the eXp Referral Division is 70/30 with no cap. This means that you are keeping 70% of the referral commission that you receive on every referral you make. For example:
If you referred a client either buying or selling a $400,000 home to an agent who is receiving a 3% commission on the sale and you have mutually agreed to a 25% real estate referral commission fee paid from them to you then this is how the math would break down at the eXp Referral Division.
- The agent would receive $12,000 (3% x $400,000)
- You would receive 25% of $12,000 or $3,000
- There is a 70/30 split with eXpYou will keep 70% or $2,100
- eXp receives 30% or $900
*As a side note. If you are already an eXp Agent or wish to join eXp Realty and one day move to the eXp Referral Division, your split will be 75/25 instead of 70/30 as a newcomer to eXp.
No Need to Join MLS or Realtor Board
Another benefit of joining the eXp Referral Division is that you do not have to join or associate with the national association of realtors or NAR, nor do you have to be apart of any MLS system or subscription.
For most referral real estate agents and many new agents in general, the MLS and Realtor board fees are a “surprise” fee that they don’t really find out about or account for in the beginning of their careers. It is also one of the more costly expenses for a new realtor.
By joining the eXp Referral Division you will have access to lead generation training, over 80 hours of sales training a week administered by top agents around the country, and access to additional investment and social media training that is provided to you by your sponsors…all WITHOUT having to pay any additional MLS annual fee.
For brand new real estate agents, this can be a dream solution to enter into the real estate industry without breaking the bank by learning how to generate quality leads (the most important piece of the real estate business) and referring them out to make referral fee income from those leads, while taking advantage of the opportunity to learn how to run a successful real estate business for when you’re ready to go all in.
Access to Suite of Tools/Trainings/Resources
As a part of your $50 monthly fee at the eXp Referral Division, you will have access to a suite of tools including…
- eXp World for access of up to over 80 hours of Live and Recorded real estate training a week over lead generation, sales, social media, and investing
- Workplace for access to over 87,000 real estate agents around the world that you can easily refer clients to in all 50 states and even over 20 different countries (many referral only agents have already became successful real estate referral agents using this tool to refer their clients to top agents in eXp)
- Skyslope for easy generation of referral agreements and transaction management for broker review
- eXp Referral Agreement Generator to generate referral agreements to specific agents in SECONDS
Opportunity to Build a Global Automated Referral Business With Agent Partners
Lastly, eXp offers agents in the eXp Referral Division the same opportunity to build a revenue share business by helping the company grow just like any other full time eXp Realty or eXp Commercial agent.
Revenue share is the revolutionary growth model that eXp has provided agents by incentivizing their agents to attract other talented agents to the company and sharing a portion of the company’s revenue back to those agents in the form of a referral fee. Revenue share is the ultimate opportunity for anyone looking to build a real estate referral business.
Here is how revenue share works. As an agent at eXp and eXp Referral Division, you will have the opportunity to sponsor agents to the company and earn revenue share the moment you join the company. You do this by attracting agents to join eXp who will then name you as their sponsor on their joining application.
When you sponsor agents to the company, you can earn revenue share from them. Here is how the math breaks down.
Let’s say that you sponsored John to eXp and he sold a home that earned him a $10,000 GCI or Gross Commission Income. Since eXp has an 80/20 split for practicing agents here is how this would work.
- John receives $8,000 or 80%
- eXp receives $2,000 or 20%
- You as John’s sponsor receives 3.5% of the GROSS Commission Income3.5% of $10,000 or $350
Now you can continue to do this as long as your agents are closing transactions up until a capped amount per agent per year.
Where revenue share becomes extremely powerful is in the duplication factor. Revenue share is a 7 tier or 7 level business model. Built off of an enhanced from the Keller Williams profit share model, it is extremely similar to common network marketing or multi level marketing business models in that when the agents that you directly sponsor to eXp directly sponsors their own agents, they will fall on your tier 2 of compensation, and you will be able to earn revenue share when they sell houses too!
This will go on for 7 tiers, with each agent falling one tier removed from the agent in your revenue share group that directly sponsored them.
The eXp revenue share model is extremely powerful for a real estate referral agent because you are able to sponsor agents anywhere in the country and even in other countries as well!
If you are already running a successful referral real estate business with many partner agents in different parts of the country and even other countries, it would make sense for them to partner up with you at eXp as well and build their own revenue share business.
To learn more about this incredible and unique opportunity for referral real estate agents check out our articles on eXp Revenue Share Here:
- eXp Revenue Share PLUS
- eXp Revenue Share vs Profit Share
- eXp Revenue Share Breakdown: Expansion vs Exponential Share
- Best Retirement Plan For Real Estate Agents: eXp Revenue Share
- Complete Guide to eXp Revenue Share
- eXp Revenue Share Calculator
Join a Perfect Real Estate Referral Brokerage Today!
Now that you know all about what the best brokerage is for a real estate referral agent, it is time to take action and make the move! Remember that per RESPA laws and individual state law that a real estate referral fee can only be paid to licensed real estate agents and an unlicensed person may not receive a referral fee from a real estate agent.
All real estate referral agents are subject to the same education requirements, education courses, continuing education, and regulations as active practicing agents, which includes joining a licensed real estate brokerage.
There is no doubt that eXp is the best real estate referral company out of all the referral companies out there. Don’t wait! Join the eXp Referral Division Today With the Backing of the Leading Sponsorship Group in eXp!
Learn More About eXp Realty & Our Free Partnership Team!
If you are interested in joining the best brokerage for agent growth, compensation, and opportunity in the world, be sure to partner with the best sponsorship team in the world as well! We provide additional training, tools, coaching, partners, collaboration, masterminds, and resources for your success!
We believe in massive growth and financial freedom for all real estate agents! Live your dream real estate lifestyle with us.
For more eXp Realty details, check out our comprehensive About eXp Realty – Everything You Need to Know article.