How are referral fees to be paid?

Referral fees in real estate transactions are typically paid from broker to broker. This practice reflects the professional relationships established between different brokers who may be cooperating to facilitate a transaction. When one broker refers a client to another broker, the referring broker is usually compensated with a portion of the commission that the receiving broker earns from the transaction. This establishes a formal agreement and helps maintain the integrity of professional partnerships.

The other options do not align with common industry practices. For instance, referral fees are not typically exchanged directly from client to agent or from agent to broker, as these relationships and compensation structures are handled through brokers. Additionally, the idea that a seller would pay a referral fee to a buyer does not conform to established norms, as referral fees are generally between licensed professionals rather than between parties in a transaction.