This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
A Minnesota Referral Agreement, also known as a Sharing of Commission Agreement, is a legally binding document between a real estate broker and a real estate salesperson, agent, or realtor. This agreement outlines the terms and conditions under which commissions will be shared between the referring party (agent) and the receiving party (broker) in a real estate transaction. Below are some important details and types of Minnesota Referral Agreements: 1. Definition: A Minnesota Referral Agreement is a written contract that specifies the percentage of commission to be shared, the terms of the referral, and how the referral fee will be paid. 2. Parties Involved: The agreement typically involves two parties — the real estate broker, who is primarily responsible for overseeing the transaction, and the real estate salesperson or agent who refers a client or property to the broker. 3. Commission Split: The agreement establishes the commission split percentage between the broker and the referring salesperson or agent. This split can vary depending on the services provided by the referring party, such as finding a buyer or seller, facilitating negotiations, or simply providing a lead. 4. Referral Fee: The referral fee is the amount owed to the referring agent. The agreement outlines how and when this fee will be paid, either at the closing of the transaction or upon receiving the commission from the referred transaction. 5. Brokerage Relationship: This agreement clarifies the relationship between the broker and the referring party. It may specify whether the referring agent is an independent contractor, an employee, or an affiliated salesperson of the brokerage. 6. Types of Referral Agreements: There are various types of Minnesota Referral Agreements based on the specific circumstances and agreements between the parties involved. Some common types include: a. Buyer Referral Agreement: A referral agreement where a salesperson refers a potential buyer to a broker for a property purchase transaction. b. Seller Referral Agreement: This agreement is used when a salesperson refers a property seller to a broker for listing and selling the property. c. Dual Agency Referral Agreement: In situations where the referring agent is actively participating in both the buying and selling process, a dual agency referral agreement is utilized to outline the commission sharing between the referring agent and the broker. Regardless of the type, all Minnesota Referral Agreements must comply with the state's real estate laws and regulations, including the disclosure of the referral fee to all parties involved in the transaction. It is recommended to consult legal professionals to ensure the agreement is thorough, fair, and enforceable.
