Can a REALTOR License be in Referral Only Status?

Real Estate License

I found this question in my site logs. Let’s clear up some terms.

Each state is responsible for licensing agents and brokers. Each has its own set of requirement and rules. For example, the Texas Real Estate Commission licenses and regulates salespersons (agents) and brokers within the State of Texas.

REALTORs® are members of the National Association of REALTORs® (NAR). NAR is a membership trade organization rather than a licensing agency.

A number of years ago NAR allowed Designated REALTORs® to establish Limited Function Referral Only (LFRO) Brokerages. LFROs have to be a separate business entity. NAR did not want brokers to commingle their “regular” agents with their LFRO agents. LFROs, like Referral Agents of Texas LLC, are established under NAR rules. Since it is also a licensed broker within the State of Texas, it can sponsor agents. Why is this important? Agents can only receive compensation through their sponsoring broker.

As far as the state is concerned LFRO agents are active agents sponsored by a Texas broker. What limits the agent’s activities is the Independent Contractor Agreement between the agent and the broker. This agreement specifically limits the agent’s actions to generating referrals.

A few states may have different “classes” of licenses with include referral-only agents. When in doubt check with your state regulatory agency for details.

Tom Branch

Originally posted at

The Other Agent Will Not Talk to Me!

REALTOR Code of Ethics

I recently closed a very difficult transaction. There were a number of problems and we had both agents, both clients, and the title company all involved in solving the problems and getting the sale to closing.

After closing I was talking with my sellers while we waited for the sale to fund. They related that they were disappointed that the other agent would not communicate with them. With all the email and phone calls that had taken place, everybody had contact information for everybody else. In an effort to be efficient, the sellers had tried to open a dialog with the other agent. They were kind of upset that she would not communicate directly with them.

I explained the National Association of REALTORS® Code of Ethics to them. Article 16, Standard of Practice 16-13 states:

“All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.”

My clients were surprised to hear we have and operate under a strict Code of Ethics.

REALTORS® Pledge of Performance and Service:

“The National Association of REALTORS® adopted the Code of Ethics in 1913, following the professions of medicine, law, and engineering. REALTORS® are real estate professionals who have chosen to join the National Association and abide by its strict Code of Ethics. What does this mean to you? It means that any REALTOR® with whom you work has voluntarily agreed to abide by a Code of Ethics, based on professionalism and protection of the public. REALTORS® are subject to disciplinary action and sanctions if they violate the duties imposed by the Code of Ethics.”

The Code of Ethics is one of many reasons to choose an agent who is a REALTOR®.

Tom Branch, Broker, CDPE, SFR

Zillow Designates Tom Branch as Local Expert

Branch Designated Zillow Local ExpertZillow has designated Tom Branch as a Local Expert for Plano, Texas.

The Zillow Local Expert badge was created to recognize those who have made valuable contributions in a specific city or neighborhood on Zillow.

Local Experts are active Zillow users who share their real estate knowledge and help others by contributing high-quality content at a local level.

The more and better the contributions a user makes that relate to that city or neighborhood, the more likely an award will be granted.

Branch was also desginated the Zillow Local Expert for 75024 in June 2010.

Source:  Zillow