California association embraces referral-fee transparency 

Days after a high-profile transparency proposal failed at NAR's annual conference, the California Association of Realtors announced plans to revise a standard form to boost disclosure of referral fees.

The update, set for next month, is designed to give consumers a clearer view of how agents are compensated.

What CAR had to say: "The California Association of Realtors has long championed compensation transparency, especially when it comes to real estate transaction referral fees," CAR President Tamara Suminski said in a Nov. 21 statement.

She emphasized that consumers make better decisions when they understand "whether and how referral fees are involved," and said the revised form will ensure clients are aware of "all sources of compensation, including referral fees."

How we got here: On Nov. 17, the NAR Delegate Body narrowly voted down a change to Article 6 of the Code of Ethics that would have required broader disclosure of referral fees. While many members expressed support for the concept, concerns about the speed of implementation and the possibility of unintended consequences sank the measure, which garnered 66.3% of the vote — just shy of the required two-thirds majority.

CAR's Nov. 21 action highlights a widening gap between national policy debates and the faster pace of state or MLS-level reforms. In June, Northwest MLS rolled out a new Referral Disclosure form and added referral-fee language directly into agency agreements, ensuring disclosures occur at the moment of contract signing. That change was made locally and swiftly — without the layers of national governance that accompany NAR policy shifts.

Why it matters: Broker-to-broker referral payments are a detail that is often unknown to the consumer, but important to the industry. And according to data from NAR, 4% of sellers and 5% of buyers found their agent via another agent's referral.