Who can receive referral fee?

Question

Hi All,

I've recently gotten my NC Real Estate License and am looking to invest in my first vacation property in Gatlinburg, TN. The agent I've been speaking with there, says I have to be actively working under a firm to receive the referral fee. Is that true? My Mother (who is also an NC agent, not actively working under a firm) has sold her 2 homes and her realtor has given her both referrals at 6%. Are there separate laws in TN?

Thanks, Tara

Tara Lambert · Answer

Phil G - Thank you so much for the above response! Would you mind including a link to the TN laws as well?

Phil G. · Answer

@Tara Lambert

My brokerage side-hustle is all about making referrals across the country, so I track the relevant laws.  Laws as to whom a licensee may PAY a referral fee and who can RECEIVE one vary a bit from state to state.  NC requires an active real estate license, affiliated with a supervising broker, to receive a referral fee.  Here's the relevant law:http://reports.oah.state.nc.us/ncac/title%2021%20-%20occupational%20licensing%20boards%20and%20commissions/chapter%2058%20-%20real%20estate%20commission/subchapter%20a/21%20ncac%2058a%20.0504.pdf

Lydia S. · Answer

To the best of my knowledge, referral fees are paid to the Brokerage, using their tax ID, then paid to the Realtor.  My experience has been with referrals in-state, out-of-state and even out-of-country.

Realtors cannot pay nor accept funds directly without risk of losing their license.

Steve Morris · Answer

Some states do allow reciprocity on a limited basis.

However, as noted, I've found properties for sellers in OR in TX (where I am not licensed) and the standard comeback is we can't pay you $0.01 since you don't have a TX license.  Not even a $20 SBUX card!!!!

Not to beat a decaying and dead to the point of being atomized horse - I believe that's the same principal when un-licensed wholesalers get a fee for arranging for the sale of RE is not allowed in OR.

Wayne Brooks · Answer

In most states you have to have an Active real estate license to receive a referral fee....and from another agent They can lose their license if they pay one improperly.  Some brokerages allow you to activate your license with them Without joining the MLS, etc...which is geared toward agents seeking to generate referral fees just like in this case, without actually representing clients in the traditional sense.