Can You Earn a Referral Fee With an Inactive Florida License?
No. Not while it is inactive. A referral fee is paid to an active licensee through their broker, and an inactive license is not placed with a broker, so it is not set up to receive one. Activate your license with a broker first, then sign a referral agreement before you make the introduction.
This is one of the most common mistakes inactive licensees make. A friend decides to sell, you send them to an agent you trust, and the agent offers you a thank-you fee. Here is why you should not take it, and how to set things up so you can.
Why activation matters
An inactive license is not placed with a broker, so there is no brokerage to receive the fee and pass it on to you. A referral fee normally goes to your broker, who then pays you under your agreement. Paying agents often check your license status on DBPR before signing a referral agreement. Rules about who may receive real estate compensation can change, so confirm with DBPR or a Florida real estate attorney before accepting any fee.
Why the paying agent says no
If you are inactive, a careful agent will decline to pay you even if they want to. Paying someone whose license is not active creates risk for the paying agent, so many will decline. Many brokers verify your license status on DBPR before signing a referral agreement.
What about a "thank-you gift"?
A gift card or cash "thank you" for sending a client is still compensation for a referral. Calling it a gift does not change what it is for. If you want to get paid for referrals, the clean route is to be active with a broker.
How to earn referral fees the right way
- Activate your license with a broker. If you are Current, Inactive, this can happen quickly. If you are Involuntary Inactive, complete the required 14 or 28 hours of education first.
- Sign a written referral agreement between your broker and the receiving broker before the client is introduced. It should name the client, the fee percentage, and when it is paid.
- Make sure the fee is paid broker to broker. At closing, the receiving broker pays your broker, and your broker pays you under your agreement with them.
- Keep records. Save the agreement and the closing statement showing the referral fee.
Some brokers can also pay you through a company you own; ask your broker.
How much is a referral worth?
Referral fees are negotiated, but they are commonly 20% to 35% of the receiving agent's commission. On a $400,000 sale where the buyer's agent earns 2.5%, the commission is $10,000. A 25% referral fee would be $2,500 to your broker, and you would receive your share under your broker's split.
| Sale price | Agent commission at 2.5% | Referral fee at 25% | You keep at a 90/10 split |
|---|---|---|---|
| $300,000 | $7,500 | $1,875 | $1,687.50 |
| $400,000 | $10,000 | $2,500 | $2,250 |
| $600,000 | $15,000 | $3,750 | $3,375 |
Commission rates are negotiable and vary by transaction; these numbers are examples only.
Referrals you can send across state lines
Florida brokers commonly pay referral fees to brokers licensed in other states; confirm the details with your broker. That means an active Florida licensee can refer a friend moving to Texas to a Texas agent and receive a fee through their Florida broker, and the reverse.
What if the deal closes after I go inactive?
It depends on your agreement with your former broker. Generally, compensation earned while you were active is paid through that broker under the terms you signed. Read your independent contractor agreement for how it handles payments after you leave.
Frequently asked questions
Can my broker pay me a referral fee that was earned before I went inactive?
Generally yes, if the fee was earned while you were active with that broker and your agreement allows it. Check your contract with the broker.
Can I receive a referral fee directly from another agent?
No. In Florida, a sales associate must be paid through their employing broker. The receiving broker pays your broker, who pays you.
Is it legal to refer a friend if I do not take a fee?
Yes. Recommending an agent with no compensation is not a problem. The issue is accepting money or anything of value for the referral.
What should I do if someone offers me a referral fee while my license is inactive?
Activate your license with a broker first, and do not accept the fee until your status shows Current, Active. If you are unsure, ask your broker or DBPR.
Do I need MLS access to send referrals?
No. Sending referrals only requires an active license and a broker; MLS and Realtor membership are not required.
Sources
This article is general information about Florida real estate licensing, not legal or tax advice. Licensing rules, regulatory requirements and fees change and vary by situation, and nothing here creates an attorney-client or broker-client relationship. Confirm current requirements with the Florida Department of Business and Professional Regulation (DBPR) or a Florida real estate attorney before you act.