Drafting a Real Estate Referral Fee Agreement Without a Lawyer!
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The Real Estate Referral Agreement—How Does It Work?
A real estate referral fee agreement is a contract signed by two or more real estate agents who want to refer clients to each other in exchange for a certain fee.
The agents use a referral fee agreement when one real estate professional cannot meet their client's request. The request may be outside of the agent’s domain, or the agent doesn’t offer the service that the client needs.
This contract is beneficial for both the client and the agent. The agent will earn some money from the referral fee, and the client will get the service they seek from another reliable professional.
Understanding the Real Estate Referral Fee
The real estate referral fee is the amount paid to real estate agents as compensation for referring clients to other professionals from the industry. The standard referral fee is around 25% of the gross commission, but it is not set in stone.
Why Is the Real Estate Referral Agreement Beneficial?
Having a written and legally binding real estate referral agreement is always a good idea.
The agreement will cover all the essential aspects of the business at hand, including the duties and obligations of everyone involved. That way, nobody will be confused about what to do, and you can avoid the obstacles in closing lucrative deals.
It will also help ensure that you get paid for referring potential clients or compensate another person for sending a client your way.
In case of any claims, a valid agreement can be used as proof in court and help resolve the disputes.
What To Include in Your Real Estate Referral Fee Agreement
Make sure your real estate referral fee agreement includes all crucial sections by following the list below. Here’s what you must incorporate:
- Referring source—The details of the person who refers the client, including their name, address, contact details (phone number and email), and any other relevant info about them
- Receiving agent—Information about the receiving agent, including the name and location
- Referral fee—Specifics regarding the referral fee, like the amount, currency, and payment date
- Agreement term—The start and end date of the agreement
- Contact details of the referred client—The name, address, phone number, email address, and other important details about the referred client
Once you finish writing all the above-mentioned items, the parties involved must sign the document.
Should You Get the Real Estate Referral Agreement Notarized?
Getting the real estate referral fee agreement notarized is optional. The agreement will be valid and legally binding once the parties sign it, but notarizing it can prove helpful if any disputes arise.
You can get any contract, including the real estate referral agreement, notarized online in no time! DoNotPay can help you schedule a virtual meeting with a remote notary in minutes, and you’ll get your documents notarized without leaving the house!
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