A referral brokerage is a unique type of real estate brokerage that provides an alternative path for licensed real estate agents who prefer not to engage in full-time real estate transactions. Some states recognize “referral” as a status that an agent can hold their license in for this purpose. Other states, such as South Carolina, do not have an official “referral” status; so we launched ReferSC.com as a referral brokerage for licensed real estate agents looking to earn side income in real estate. Instead of facilitating property sales directly, agents associated with a referral brokerage maintain an active license and refer clients to full-service agents, earning a referral commission when those clients successfully complete a transaction. The referral amount is generally 20% to 40% of the full-service agent’s gross commission income.

How Does it Work?

Agents who hang their license with a referral brokerage pay lower fees compared to traditional brokerages. They do not participate in the complex paperwork, sales training, or demanding schedule of handling real estate transactions. Instead, they focus on connecting clients to active, full-time real estate agents who handle the entire process from listing to closing. When a deal closes, the referral agent receives a commission, typically a percentage of the total commission earned by the full-service agent.

Pros of a Referral Brokerage

1. Low Costs: Referral agents pay minimal fees compared to those in traditional brokerages, allowing them to maintain their license at a lower cost.
2. Flexible Income: By referring clients, agents can earn side income without the time commitment and effort of managing transactions.
3. No Transaction Work: Referral agents are not responsible for the intensive work associated with property sales, such as showings, negotiations, or paperwork.
4. Maintain License: Agents can keep their real estate license active, ensuring they stay connected to the industry and maintain their credentials. In some places referral agents can even obtain access to their local MLS. That is just a matter of the local MLS allows licensed agents access, when their brokerage does not have an account.

Cons of a Referral Brokerage

1. Limited Earnings: Unlike full-service agents, referral agents do not earn the full commission on a transaction; their earnings are limited to the referral fee.
2. Less Involvement: Agents may miss out on the direct interaction and professional growth that comes with managing real estate transactions.
3. Dependence on Others: Referral agents rely on the performance of the full-time agents to close deals and earn their commission.

Is a Referral Brokerage Right for You?

Referral brokerages, like ReferSC.com, offer a perfect solution for agents who wish to stay licensed and earn side income without the heavy workload of full-time real estate. This model is ideal for agents who have moved on to other careers, retired from active real estate, or prefer flexibility while staying involved in the industry. However, those seeking higher income potential and hands-on experience may find a traditional brokerage more fitting. Such as our sister brokerage for full-service buyers and sellers agents, Better Homes & Gardens Real Estate – Palmetto.