What Is a Referral Agent in Real Estate?

How a referral fee actually works

A typical referral fee in Canada is 25% of the referred agent’s commission, though the range runs from 15% to 35% depending on the deal and the relationship. The fee is paid brokerage-to-brokerage at closing; the buyer or seller does not pay it directly. In Ontario, the fee must be disclosed in writing under TRESA.

When you might encounter one

• You’re moving from Toronto to Calgary and your Toronto agent introduces you to a Calgary specialist.
• Your generalist agent refers you to a commercial specialist for an investment purchase.
• A retired agent maintains a client base and refers new business to active agents.

Does it cost you anything?

No — the referral fee comes out of the receiving agent’s commission, not your pocket. But you should still understand the relationship: ask whether the referring and receiving agents have worked together before, and whether the receiving agent is the right local specialist for your property type.

Quality control matters

A good referral introduces you to someone whose work the referring agent vouches for. A weak referral is a relationship of convenience — the referring agent gets paid regardless of whether you have a great experience. Ask the referring agent how many of their past clients have used the receiving agent and what happened.

Frequently Asked Questions

Do I have to use the agent I was referred to?

No. You can interview the referred agent and decide. If they’re not the right fit, you can choose someone else — the referral fee only triggers if a transaction closes through them.

Can a non-licensed person collect a referral fee?

Not in Ontario. Real estate referral fees can only be paid between registered brokerages. Paying an unregistered “bird-dog” for client leads is not permitted.

Does using a referral agent slow down my transaction?

It shouldn’t. The referring agent’s role typically ends at the introduction. The receiving agent owns the work and the timeline.