A real estate referral agent’s primary function is to connect clients with licensed real estate agents who actively list and sell properties. Therefore, a referral agent’s involvement with a property generally doesn’t extend to physically showcasing it. The agent’s role is limited to making introductions and receiving a portion of the commission if a transaction occurs as a result of the referral. For example, a referral agent might connect a potential buyer with a listing agent specializing in condos in a particular neighborhood; that listing agent then handles showings and negotiations.
This practice is important because it allows individuals with real estate knowledge, but perhaps not the time or inclination for active sales, to participate in the real estate market. It benefits clients by connecting them with appropriate specialists and provides additional income opportunities for licensed agents. Historically, referral arrangements have offered a pathway for agents looking to transition out of active sales while still maintaining industry involvement. This system also allows clients relocating to new areas to easily find representation in their new location without having to independently vet multiple agents.
