What is the standard amount for a referral fee?

While there are no obligatory standards for many things in real estate transactions, including the amount of referral fees, there are prevalent norms.

For example, in our experience, with residential purchase and sale transactions the referral fee is most often 25% of the commission that will be paid to either the seller’s broker or the buyer’s broker.

However, for commercial leasing, there is no such “rule of thumb”. That’s because leases for commercial space vary so widely in their length. And the commission is determined in part by length of lease. Because a broker who gets a commercial lease referral doesn’t know at the time of receiving the referral  how long the lease will be, and therefore how much the commission might be, we are unable to provide a “typical’ referral fee percentage for office, retail, and industrial leases.

In contrast, with a home purchase or sale, the transaction either closes or it doesn’t. If it closes, the full commission is paid. If it fails to close, no amount of commission is paid.

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