Can I Refer a Short Sale Listing to Another Agent and Still Get Paid?
Yes. A short sale referral works the same way as any other referral in Florida. It's paid broker to broker, and it comes out of the commission the lender approves.
What's different about a short sale is who sets that commission.
The Lender Sets the Commission
In a normal sale, the seller and the listing broker agree on the commission. In a short sale, the lender has to approve it, because it's coming out of money the lender is agreeing to take less of.
Fannie Mae's servicing guide, section D2-3.3-01, is a clear example. It allows a commission "customary for the market," capped at 6% of the sale price, and any short sale negotiation fee has to come out of that commission, not on top of it.
The referral comes out of the listing brokerage's share of whatever the lender approves. It doesn't add a cost to the file. The approval letter is the document that settles the number on your deal.
How the Money Moves in Florida
It goes broker to broker. Never agent to agent, and never to anyone unlicensed.
Florida Statute 475.42(1)(d) says a sales associate can't collect money in a real estate transaction "except in the name of the employer and with the express consent of the employer." So your referral is paid to your broker, and your broker pays you.
Florida Statute 475.25(1)(h) makes it a violation to pay a referral fee or share a commission with anyone "not properly licensed as a broker, broker associate, or sales associate under the laws of this state." The same paragraph allows a Florida broker to pay a referral fee to a broker licensed in another state, "so long as the foreign broker does not violate any law of this state."
Where RESPA Fits
RESPA Section 8 bars paying for referrals of settlement service business. Real estate referrals between brokers are carved out. 12 CFR 1024.14(g)(1)(v) permits "a payment pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and real estate brokers."
That exemption covers agents and brokers. It doesn't stretch to a loan officer, a title rep or anyone else in the deal.
Put It in Writing First
Get the referral agreement signed between the brokerages before the file changes hands. It's the record that says who referred what and on what terms, and it's what your broker will want before paying anything at closing.
When the Short Sale Isn't in Florida
If the property is in another state, you're referring it out to a broker licensed there, and 475.25(1)(h) allows a Florida broker to pay a referral fee to, or share a commission with, a broker licensed in that state. Your broker handles the paperwork.
Where I Fit
I'm SFR certified, that's Short Sales and Foreclosure Resource, and short sales are the part I do. If you've got a distressed seller in Northeast Florida and don't want to work the lender side, you can hand the file off and it goes broker to broker. If you want to keep the file and have someone behind you on the short sale piece, that's an option too.
Out of state, I refer through the SFR® network. I'm licensed in Florida only.
If You Want to Talk
Happy to answer questions, agent to agent. Just reach out.
Jim Armstrong, REALTOR® · Momentum Realty · SFR® Certified JimArmstrong904@gmail.com
Jim Armstrong is a licensed real estate agent (REALTOR®) with Momentum Realty. This page is general information for real estate licensees, not legal advice. Talk to your broker about how referrals are handled at your brokerage.
Momentum Realty is not associated with the government, and our service is not approved by the government or your lender.