01/27/2026
This has been asked a few times. Military moves especially.
How agent-to-agent referrals normally work (Canada focus, applies in GTA + most brokerages)
1. Initial client context
An agent has a client they can’t service directly because of:
• Different city/province/market (common)
• Different specialty (e.g., commercial vs. residential)
• Timing/availability
• Conflict of interest
• Client preference
2. Referral agreement between agents
Before passing the lead, the referring agent and the receiving agent typically agree on:
• Referral fee % (commonly 20–35% of the commission earned, paid on the side that closes)
• Which side it applies to (buy side, sell side, or both)
• Duration window (e.g., valid 6–24 months)
• How client communication is handled
Most common in GTA: 25% referral on one side for residential.
3. Written referral document
This is usually a one-pager via:
• Brokerage referral form
• Email acknowledgment (surprisingly common)
• Inter-broker referral agreement
Important because it avoids disputes if the client uses that agent months later.
4. Client handoff
Two ways:
• Warm intro (preferred): group call / group text / email
• Cold transfer: less effective, lower conversion
Warm intro increases close rate massively.
5. Receiving agent services the client
They treat the client as their own, but ethically should:
• Keep the referring agent lightly updated
• Not poach for future unrelated deals (unless negotiated)
6. Deal closes → Brokerage pays referral fee
At closing, brokerage disburses:
• Referral fee from receiving brokerage to referring brokerage
• Then to the agent depending on splits
This part matters: referral fees are typically between brokerages, not between agents, to keep everything above board.
7. Everyone documents for tax & compliance
Referral fee is treated as commission income and taxed like normal agent commission.