Should I Become a Real Estate Referral Agent?
Just like any other career, there are pro’s and con’s to becoming a real estate agent. Today we are specifically talking about the real pro’s and con’s about becoming a real estate referral agent, and whether it’s something you should pursue. We’re giving you the information you need in order to make the best decision for you.
What is a real estate referral agent?
A real estate referral agent is a licensed real estate professional who utilizes his/her contacts to make referrals to other licensed real estate professionals. Real estate referral agents earn a referral fee when a real estate transaction closes.
Pro’s of Being a Referral Agent
Affiliate with a broker without traditional fees. As they are engaging in the real estate process for compensation, real estate referral agents must be affiliated with a brokerage. However, unlike traditional firms, referral brokerages don’t usually charge franchise fees, technology fees, or monthly desk fees. Instead, most referral brokerages only charge a monthly or annual membership fee for the cost of hanging their license. For example, at Mint Refer, we offer three plans for our referral agents to choose from, all at minimal cost.
Though we do not at Mint Refer, some firms also charge a transaction fee per closed transaction.
Skip association and MLS fees. One of the biggest benefits of being a real estate referral agent is that you remain active without paying MLS or REALTOR® association fees. This is because referral brokerages are not members of REALTOR® associations, which means their affiliated licensees are not required to be members.
Keep your license active. Though there is nothing wrong with keeping your license in inactive status, you can not legally engage in real estate practices (including receiving compensation for referrals) without an active license. And the only way to have an active license as a sales associate or provisional broker is by affiliating with a licensed brokerage.
Get compensated for your referrals. The only way to be legally compensated for referrals is to hold an active real estate license and be affiliated with a licensed brokerage.
Refer to all 50 states. One of the great things about being a licensed real estate referral agent is that you only need to be licensed in one state yet can refer to agents in multiple states. Mint Refer agents can submit referrals for clients in all 50 states. For instance, if you’re licensed in Florida but have a cousin who is looking for a house in Minnesota, you can still refer him and get compensated for it!
Reduce burnout and invest in self-care. It’s no surprise that one of the reasons Realtors® leave the industry is because burn out is real! From late night calls and texts to weekend open houses, and back and forth negotiations, Realtors® endure a lot on a daily basis.
Unfortunately, this leads to severe burnout, and little time for self-care.
Referral agents invest as much or as little as they want into the industry without risk of pressure from their brokers to cap or reach sales goals.
There’s also no risk losing their active status because brokerage affiliation is covered by a small fee, and not based on production numbers.
This allows agents to pursue other interests, hobbies, or careers as they see fit. Many of our agents have other full-time or part-time careers, are stay-at-home-parents, and own their own small businesses. They do what they want when they want.
Con’s of Being a Referral Agent
Limited brokerage activities. One of the biggest drawbacks of being a real estate referral agent is that you are only allowed to engage in the business of making referrals. You would not be able to engage in traditional brokerage activities like buying, selling, or property management.
Lower compensation. Referral fees are going to be lower than the commission a Realtor® will receive for the transaction. This is because a referral agent will receive a portion of the commission while the Realtor will receive the rest. At Mint Refer, our referral agents earn a 25% referral fee for each closed transaction. So, if an earned commission is $15,000 (3% of a $500,000 sales price), the Realtor® receives $11,250 of that while the Mint Refer referral agent earns $3,750.
Overall, Real Estate Referral Agents enjoy the benefits of real estate licensure without many of the headaches that cause most Realtors® to leave the profession within the first 5 years.
From reduced costs and fees to the ability to pursue other interests, real estate referral agents find that the benefits of their titles outweigh that of a traditional Realtor®.
If you would like to join Mint Refer as a Referral Agent, please visit mintrefer.com/join or email us at join@mintbrokerage.co.