To participate in a referral service, what is required of a broker company?

To participate in a referral service, it is essential for a broker company to have a written agreement with the cooperating broker. This written agreement serves as a formal document outlining the terms and conditions of the referral arrangement, ensuring that both parties have a clear understanding of their responsibilities, commissions, and any other relevant details. Having a written agreement helps to protect the interests of both brokers and provides a legal basis for the referral process, reducing the potential for misunderstandings or disputes.

In addition, the nature of referral services often involves the exchange of client information and commissions, which necessitates a clear, documented arrangement to ensure compliance with applicable laws and ethical standards within the real estate industry. This requirement promotes professionalism and accountability among brokers who wish to collaborate through referrals.