A real estate referral company is a company where agents can hang their real estate license and make a part of the commission (typically ¼ of the total gross commission) by referring their prospects to full time agents. Real estate referral companies are typically not associated with the Board of Realtors or the MLS.
You are probably asking yourself “Why wouldn’t an agent want to work with their prospect directly and make the full commission?” Some reasons would be:
That being active with a referral company means they would not have to pay any dues to the Board of Realtors or the MLS.
A referral agent is able to make referral fees off of their prospects all over the world. Whereas, typically, full time agents can only make money off of prospects in their local area.
Agents in a real estate referral company might have other obligations besides real estate and may not have the time to focus much on real estate. They have other careers, are retired etc…
A referral company is a great option for agents who have been sitting inactive or are thinking of letting their license go.