NWMLS to Further Enhance Transparency for Consumers by Facilitating the Disclosure of Referral Fees

Published on: June 25, 2025

Today, Northwest Multiple Listing Service (Northwest MLS) announces additions to its residential real estate forms to provide buyers and sellers with complete transparency regarding referral fees their brokers pay or receive in connection with their clients’ transactions. 

Northwest MLS’s real estate forms are used throughout Washington state to facilitate listings, buyer brokerage services, and the purchase and sale (and lease) of residential property.  These latest forms additions are consistent with Northwest MLS’s ongoing commitment to support an open, fair, transparent, and comprehensive real estate marketplace.

Referrals and Referral Fees

Referrals between brokers allow brokers to connect buyers and sellers with a business partner who has special expertise in a geographic area or market segment not serviced by the referring broker.  Referrals can help buyers and sellers efficiently connect with a trusted real estate professional with the necessary skills and experience to assist the consumer. 

Upon successfully helping a consumer close a transaction, some real estate firms commit to pay a portion of their compensation – as a referral fee – to the firm that referred the consumer.  Referral fees are included in the compensation a buyer or seller pays to a firm, but are often unknown to the consumer.  “Buyers and sellers should have complete transparency regarding all fees paid to a real estate brokerage firm, including referral fees paid to another firm,” said Justin Haag, President and CEO of Northwest MLS. 

Disclosure of Referral Fees

Northwest MLS is publishing a new form (Referral Disclosure) to enable the disclosure of a referral fee, by the referring broker, at the time the referral is made.  The new form notifies the buyer or seller that:

• The brokerage firm is referring the consumer to a different real estate broker and firm.
• The identity of the new broker and firm.
• The amount of the referral fee that the referring firm will receive upon a successful closing.

The Referral Disclosure provides transparency regarding the referral fee at the time the buyer or seller is introduced to a new broker – empowering the consumer to make a fully informed choice when deciding whether to engage the broker the consumer is being referred to.

“Disclosure of referral fees at the outset of the broker’s engagement with a buyer or seller, rather than at closing or sometimes not at all, is essential,” said Haag.  “Buyers and sellers should have complete information when hiring a broker regarding any fees paid to the firm, including any referral obligation of the firm.  Some referral fees can be as much as 50% and may impact a buyer’s or seller’s decision about which broker to engage.”

In addition, Northwest MLS’s brokerage services agreements will all include a new section titled “Referral Fee Disclosure” to disclose to buyers and sellers, before signing the agreement, information about any referral fee, including the amount of the fee and the referring brokerage receiving the fee.

Together, these forms provide buyers and sellers with information about the referral fee at the time the referral is made and again, when a buyer or seller negotiates the terms of a brokerage services agreement.  Even if the referring firm fails to make the disclosure at the time the referral is made, the fee will be disclosed to the buyer or seller in the brokerage services agreement.

A Complete and Transparent Marketplace

Disclosure of referral fees is the latest advancement by Northwest MLS to enhance transparency empowering consumers to make fully informed decisions.  Years ago, when sellers criticized the real estate industry’s policies related to broker compensation, Northwest MLS led the industry by making consumer friendly changes, providing transparency, meaningful choice, and clear opportunities for consumers to negotiate broker compensation. 

More recently, when a large brokerage firm sought to hide property listings from consumers, Northwest MLS maintained its pro-consumer, pro-competitive system, providing buyers with equal access to all property listings, while giving seller’s a myriad of choices about how their home is marketed.

Northwest MLS is committed to providing buyers and sellers with a complete and transparent real estate marketplace, including information regarding all brokerage fees and access to all property listings.