How to record a referral fee or co-op commission on a deal

The five steps

1. 1

   Decide which direction it is

   A fee you owe a referring brokerage on your deal is an outbound referral fee. Co-op commission your brokerage owes the other side is a commission payable. Commission you expect from another brokerage on your own deal is a commission receivable. A referral fee coming to you for a client you sent elsewhere is an inbound referral — not a deal (step 5).

2. 2

   Add the outbound fee on Financials

   Under Money Going Out, add the referral fee or payable as a percentage or a flat amount (commercial deals also allow per-square-foot or sliding scale). For a percentage fee choose the base: your gross commission (the default — it includes any bonus) or the deal value (use this on leases, where the deal value already is the commission).

3. 3

   Attach the paperwork

   An outbound referral fee needs the referral agreement uploaded and the recipient’s W-9 received; a payable needs a W-9. The deal requests the W-9 for you and tracks whether it came back. A payee inside your own organization is covered by their onboarding W-9 automatically.

4. 4

   It comes off before your split

   Referral fees and payables are deducted from gross commission before the agent/org split, and they print on the CDA. When the related payment lands, the obligation is processed automatically.

5. 5

   Referral fee coming to you? Use My Money

   Referral Income → create the record (paying brokerage, expected amount, details), upload the referral agreement and submit. Your team leader, LLC owner or the broker approves; the invoice to the paying brokerage sends automatically on approval unless you uncheck it. When it’s paid, your share is disbursed to you and counts toward your 1099.