How would it make you feel if a friend or a family member were to highly recommend a professional to you – a dentist, a doctor, a massage therapist, a hair dresser, any service worker really – and later find out that they got a cash incentive for ‘referring you.’ If you’re like me, you’d be miffed (if not down right duped). I mean how pure is a referral if the other person is receiving a gift for giving it? Is he really the best massage therapist in town or did you refer him to me because you’re getting a 20% discount on your next appointment??


The real estate world is unfortunately no different from the real world. Real Estate salespeople in Toronto are still allowed to take monetary incentives from mortgage brokers, home inspectors, real estate lawyers, cleaners, stagers, etc in exchange for their referrals to clients. They’re called Finder’s Fees. And they happen all the time.


Don’t claim dumb. There it is right there in section 6 of the Buyer Representation Agreement that you signed or will sign before you even go out with an agent: “The Buyer acknowledges that the Brokerage may be receiving a finder’s fee, reward and/or referral incentive, and the Buyer consents to any such benefit being received and retained by the Brokerage in addition to the commission as described above.” (Buyer Representation Agreement, OREA Form)


According to the Canadian Real Estate Association and the Real Estate Council of Ontario’s Code of Ethics your agent has to disclose any finder’s fees received. Are all agent’s following these codes of ethics though? I think the answer may be ‘not always’. It is thus your responsibility to ask.


To each their own but to me there is no purity in a paid real estate referral. I question the validity in something that’s in the referrer’s best interest over the person the referral it is being given to.


If you sit down at a buyer’s meeting or a listing presentation with me and we are going over the paperwork, I will tell you the same thing I’ve told everyone else before you. Acknowledge that I COULD receive a Finder’s Fee (that’s in the standard print) but know that I WON’T. Instead I will give you recommendations for professionals who are just plain exceptional at what they do. The best in the biz. The ones I’d give to my mum and dad.


Not to bore you with the intricacies of real estate documentation but this is why a real estate referral from me is and will always be pure. As my client YOUR interests, over MINE, take front and centre. Always.

  • “The brokerage and it’s salespeople have a fiduciary (legal) relationship with the client and represent the interests of the client in the real estate transaction.” “The brokerage must protect the interests of the client and who what is best for the client.” (Working With A Realtor, OREA Form)
  1. Hi Karyn, Love your blog post but you forgot about banks as they are the main culprits for offering finders fees and incentives to Real Estate Agents. I often wonder if these are being disclosed to the clients as I have seen many occasions where the referral directly to a bank did not suit what was best for the client. I am a Mortgage Broker here in Toronto and I have been in business for many years and have not once offered a referral fee to RE Agents. I only work with the best and they know that I willI reciprocate business if I know it will be a good fit for the client. It always has to be a win for the client. Thanks again for your honest post.

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