The Referral Office
Q. What is a referral brokerage?
A. It is a real estate brokerage where the agents are limited, by contract, to referring business. The members of the referral brokerage may not represent buyers and sellers directly.
Q. What are the advantages of becoming a member of a referral brokerage?
A. Some agents have decided to no longer be actively engaged in the profession of real estate. Some examples would be agents who would like to retire from traditional real estate, make a career change, or take some time off to deal with changing family circumstances.
The Referral Office offers an alternative to traditional real estate where agents have an opportunity to earn referral fees without paying NAR, CAR or local association dues. Additionally, associates avoid the expenses of a full-time agent such as signs, lock boxes, Supra key, and advertising fees. Don’t forget the extra money you’ll save on gas when you’re not driving to your listings or taking potential buyers to look at homes.
Q. What kind of income will I earn as a Referral Associate?
A. The referral fee is broken down as follows. 20% of the referred side of the commission goes to the Referral Associate. Unlike other referral programs there is no house split taken from your referral fee. For example:
Sales Price $500,000
Commission Rate 3%
Commission $15,000
20% to Referral Associate $3,000.00
** NO split with house!
If you are placing a referral for a personal property transaction you will be paid a 22.5% referral fee for the transaction.
Q. Does The Referral Office pay a higher referral fee for more closings?
A. Yes we do. If an associate refers and closes more than five transactions (other than personal property transactions) in a rolling twelve months, the member will be paid a 22.5% referral on the third and any subsequent closings instead of the usual 20% referral fee. The referrals must be placed and close in the same rolling twelve month period.
Q. How much does it cost to join The Referral Office?
A. There is a one-time, $250 initiation fee for broker associates. This covers your license transfer, new business cards, and a THE REFERRAL OFFICE e-mail address.
Q. Do I have to utilize my own personal email address?
A. No. As an added feature, you will be assigned your own professional THE REFERRAL OFFICE email account.
Q. Will I still have my MLS access as a THE REFERRAL OFFICE member?
A. No. The National Association of Realtors (NAR) exempts “Limited Function Referral Organizations” (LFRO) from the obligation to pay association and MLS dues, but also designates that because of that exemption, the licensed real estate agents do not have access to those organizations services and information such as the MLS database.
Q. What types of properties can I refer?
A. Any type of real property within Colorado. You may also make commercial real estate referrals; the referral fees you receive for commercial transactions may vary.
Q. Can I request a certain sales associate to receive my referral?
A. Yes – You can choose any full-time sales associate provided the agent agrees to pay the referral fee and demonstrates the ability to effectively service the customer’s real estate needs. If you are not familiar with the agents at The Referral Office we will assist you in choosing the best agent for your referral client, based on several criteria such as experience and market knowledge.
Q. Should I call the sales associate direct with the referral?
A. No - It would be best if you place the referral through the Referral Network. This way we can avoid miscommunication which could cause you to receive a reduced referral fee, or possibly, nothing at all.
Q. Are all referrals assigned to The Referral Office agents?
A. Yes and No – Preference is given to The Referral Office agents because we have developed an agreement to cooperatively work with that brokerage; however, if you have a referral in an area that The Referral Office does not service, we will assist you in referring that business to another brokerage.
Q. Are taxes deducted from earnings?
A. No – at year end you will receive a 1099 to report your earnings. As your earnings grow, you may have to pay quarterly estimated taxes. Consult your tax advisor on how to handle quarterly or year-end taxes.
Q. How do I renew my real estate license when it comes due?
A. You will need to pay the renewal fee to CREC. You will also need to complete 12 continuing education credits (4 mandatory and 8 elective) every twelve months from. THE REFERRAL OFFICE will also send you a reminder notice prior to your license renewal date of December 31st.
Q. Do I need to carry Errors & Omissions Insurance?
A. No – as a member of THE REFERRAL OFFICE you are not actively practicing Real Estate therefore E&O insurance is not required.
Q. Why wouldn’t I just hang my license at a traditional brokerage?
A. THE REFERRAL OFFICE offers an option where you can avoid the high costs of being licensed in a traditional brokerage such as E&O Insurance, mandatory monthly advertising or desk fees, monthly association fees, and annual association dues.
Additionally, you are able to pursue other interests while still feeling comfortable that your clients are receiving excellent customer service from knowledgeable, experienced agents that will work just as hard for your clients as you would if you were still pursuing real estate as a full time career.
Q. Do I have to keep regular office hours, attend meetings, or go to an office?
A. Absolutely not! You will be dealing with your the Referral Office coordinator by phone. You determine when you work. It could even be while visiting relatives or friends or while on vacation. Whenever you happen to touch base with someone who tells you they would like to purchase or sell real estate you will gather some basic information and call or e-mail to register your referral. That’s all there is to it. We handle all the paperwork.
Q. What do I say to a potential buyer or seller?