What is an LFRO? How much do your agents earn? Is this a real brokerage? What does it cost? How does it work?

 

Texas Agent Frequently Asked Questions

FAQs

What is an LFRO (Limited Function Referral Office)?

Send Realty, PLLC is a Limited Function Referral Office. We are a fully licensed Texas real estate brokerage. We sponsor licensees, and we receive and pay referral commissions. An LFRO limits the scope of agent activity to referral services only. We do not provide brokerage services, so our agents are not obligated to pay any of the customary fees or costs associated under traditional full-service brokerages.

What kind of agents do you sponsor?

Our agents are actively licensed Texas real estate salespeople who practice on a referral basis only. The agents who seek us out are typically transitioning between careers, live out of state, or simply need to place full-service real estate activities on "hold" due to time or financial constraints. We also receive agents who are "in between" brokers and wish to remain active, but haven't found the right full-service brokerage fit yet. We focus on recruiting agents who want to harness the full opportunity a referral practice can provide.

Are your agents Realtors®?

No. Referral Agents are actively licensed Texas real estate agents. Only licensees who pay association membership dues and are members in good standing with the NATIONAL ASSOCIATION of REALTORS® may use the Realtor® title.

Our Referral Agents seek to refer business to Realtors® for the delivery of full brokerage services, and to meet the needs of our referral customers with utmost excellence and professionalism.

Is it legal to pay referral fees?

Active licensees are eligible to receive commissions through a sponsoring broker. Commissions, whether derived through full-service brokerage activities OR referral fees, commissions may not be paid to any unlicensed persons in Texas.

Do referral fees add hidden costs to consumers?

No! Receiving brokers agree to accept referrals with all referral fees between brokers explained up front. All referral fees are to be disclosed on the consumer's settlement statement -- to all transaction parties -- prior to closing.

Receiving brokers are agreeable to pay referral fees, and divide the commissions they receive during the course of a transaction with the referring broker. There is no cost to the consumer for these fees between brokerage parties.

Do Referal Agents have MLS access?

No. Referal agents do not pay the Association dues necessary to have MLS access. Per NAR guidelines, Referral Agents are prohibited from listing, selling, leasing, renting, managing, counseling or appraising real property. MLS access is not needed for referral services.

Can Referral Agents request or specify a receiving agent / broker?

Yes! Our Referral Agents can specifically request a receiving agent / broker for their referrals. Referral agents are not limited brokerage  brands, geography, or transaction types. They may refer residential, commercial, new construction, multi-family, farm &  ranch, and lots / land transactions. They may refer business both within and outside of Texas, and enjoy the benefit of our large directory of fully vetted, full-service brokerage referral recipients when working to help find the right long-distance connection for their referral customers.

Do referral fees add cost to the consumer?

The Texas Occupations Code 1101.651 allows brokers to share fees and commissions with the salespersons (agents) they sponsor and with other brokers. TAC 535.131 clarifies this to include the sharing of fees and commissions with out of state (foreign) brokers. Referral fees paid to other brokers are subject to the agreement between the brokers for whatever commission amount is earned on the specified transaction.

Can Referral Agents list houses?

Referral Agents cannot list houses or perform any brokerage services. Agents who wish to actively list houses would need to transfer their license to a traditional brokerage, and would be obligated to pay local, state, and national association dues, as well as MLS fees.

 

Per NAR guidelines, Referral Agents are prohibited from listing, selling, leasing, renting, managing, counseling or appraising real property.

Can Referral Agents represent Buyers?

Referral Agents cannot represent Buyers or provide any brokerage services.  Agents who wish to actively represent Buyers would need to transfer their license to a traditional brokerage, and would be obligated to pay local, state and national association dues, as well as MLS fees.

 

Per NAR guidelines, Referral Agents are prohibited from listing, selling, leasing, renting, managing, counseling or appraising real property.

Can Referral Agents represent themselves in a real estate transaction & collect commissions?

As a Limited Function Referral Agent, our sponsorees cannot serve as their own buying or selling agent and collect a commission. They can refer their business to a full-service Realtor®, and would be eligible for a referral fee.

Are Referral Agents required to disclose license status on personal transactions?

Yes, Referral Agents are subject to all Texas Licensing Laws. License holders acting as principals have to disclose the fact that they have a real estate license before any agreement is signed [Rule 535.144]. The disclosure is required even if the license holder is on inactive status, and the rule applies to ALL Texas real estate licensees.

What happens to Referral Agents who engage in brokerage services during sponsorship?

The exemption for a referral licensee is automatically revoked upon the individual  engaging in activities requiring a real estate license other than making referrals. Agents who breach the Referral Agent Agreement will become immediately responsible for the full amount of dues for NAR, TAR, and CCAR for the current fiscal year and sponsorship under Send Realty's Limited Function Referral Office will be terminated. Referral Agents may request transfer to the sponsoring broker's full-service brokerage at any time.

What requirements do Referral Agents have to meet?

Agents sponsored by Send Realty, PLLC must maintain an active license status with TREC, and must complete all licensing renewal requirements relating to education, payments, and TREC re-certification. Discounts for SAE and MCE hours can be accessed through our sister company, Providence Group Realty.

Can agents with inactive licenses receive sponsorship?

Yes! Agents whose licenses have been placed on inactive are eligible for immediate sponsorship. Licensees may use TREC's Online Licensing Tool to request sponsorship. Licensees may also be subject to SAE or MCE requirements.  Discounts for SAE and MCE hours can be accessed through our sister company, Providence Group Realty.

Can agents with inactive licenses receive referral commissions?

No. A licensee must be on active status at the time the referral is made. However, if the referral was made while a licensee was active, that agent may collect that fee while on inactive status. Regardless of status, ALL referral fees must be paid through the sponsoring broker.

Can agents with expired licenses receive sponsorship?

Agents with expired licenses must consult with TREC to obtain an inactive license. Only active and inactive licensees may request sponsorship.

How much does TREC charge to transfer an agent's license to Send Realty, PLLC?

Active and Inactive agents can request sponsorship through TREC's Online Licensing Tool. The fee to transfer to a new sponsoring broker is $20.

How do Referral Agents add value?

As a Referral Agent, your ability to match someone who needs real estate services with the right Realtor® is worth its weight in gold. As a trusted advisor in the marketplace, your referral service is valuable and deserves compensation. 

Whom may your Agents refer?

Our Referral Agents may refer acquaintances, family members, friends, former clients who are not subject to any do not compete agreements, out-of-area, and any indirect relationships (e.g., web-based leads). There are no limitations on property type, transaction type, or price point.

Are referral services limited to Texas?

Send Realty's Referral Agents can provide referral services to consumers seeking brokerage services in any state. Since Section 535.131 of TREC rules permits a licensed Texas real estate broker to cooperate with and share commissions with brokers licensed in other states; however, all negotiations within Texas must be handled by Texas licensees who are physically present within State boundaries and are sponsored by a broker who provides brokerage services.

Is it difficult for a Referral Agent to return to full practice?

Referral Agents can quickly and easily return to full practice by requesting sponsorship from our sister company, Providence Group Realty. Once sponsorship has been obtained, Association Membership fees, MLS dues, and ATS services will need to be reinstated.

Which local Association holds Send Realty's LFRO Certificate?

Send Realty, PLLC is licensed through the Texas Real Estate Commission, and its required LFRO Certification Form is held with the Collin County Association of Realtors in Plano, TX. Referral Agents who are  affiliated with Send Realty are rostered under our Certificate at CCAR.

Does Send Realty, PLLC offer business cards or stationary for Referral Agents?

Business cards and other professional stationary products are available for Send Realty's Referral Agents. Referral service is a real business, and we treat it with all of the professionalism and integrity that would be expected of a real estate company providing brokerage services.

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