How to Complete the Texas Referral Agreement Between Brokers (TXR 2402)

A Texas referral agreement between brokers is a written contract that documents how two licensed brokers will split a commission when one sends a client to the other. The Texas Real Estate Commission does not publish its own form for this purpose, so brokers in the state typically use the Texas REALTORS Compensation Agreement Between Brokers, designated TXR 2402. Completing it correctly means filling in six short sections, verifying both brokers’ license information, and getting signatures in place before the referral is made.

There Is No TREC Referral Form

If you have been searching the Texas Real Estate Commission website for a referral form, you can stop. TREC mandates certain contract forms for property sales but does not publish a standardized referral or compensation agreement between brokers. The form most Texas brokers reach for is TXR 2402, which Texas REALTORS materials describe as the proper vehicle for documenting broker-to-broker compensation, including referral arrangements.¹

TXR 2402 is available through your local REALTORS association portal or your brokerage’s transaction management system, and you generally need an active Texas REALTORS membership to download it. Some larger firms use proprietary referral forms instead. If yours does, ask your broker or compliance officer for a copy and confirm it covers the same essential fields.

Information to Gather First

Pull everything together before you open the form. Missing a license number or misspelling a client’s name can hold up the referral fee at closing.

Both brokerages’ legal names, exactly as they appear on TREC licensing records. The License Holder Search tool on the TREC website lets you verify them.²
TREC license numbers for both the referring and receiving brokers. The individual agents involved may also need their numbers listed.
Full contact information: addresses, phone numbers, and email addresses for both firms.
The client’s full legal name, so the receiving broker knows who they are looking for.
Property details. If a specific property is involved, use its full address or legal description. If the client is still searching, reference a general area or property type.
Compensation terms. Decide on a percentage of the gross commission or a flat dollar amount. The most common referral fee runs about 25 percent of the receiving broker’s commission, with fees typically ranging from 20 to 35 percent depending on the relationship and complexity.³

Filling Out TXR 2402 Section by Section

TXR 2402 is a single page with six numbered sections.

Section 1 — Parties

Enter the Listing/Principal Broker’s legal name, address, phone, and email on one side, and the Cooperating Broker’s information on the other. In a referral, the referring broker is usually the Cooperating Broker and the broker who will work with the client is the Listing/Principal Broker. The assignment can flip depending on whether the client is buying or selling.

Section 2 — Property

Provide the property’s full address or legal description. If the referral is for a buyer who hasn’t identified a property yet, describe the scope as specifically as you can, for example “residential property in Travis County.” Check whether your brokerage allows an attached exhibit for broader descriptions.

Section 3 — Registration

Name the client being referred. This section also identifies which broker represents the property owner and which represents the client.

Section 4 — Term

Fill in a start date and an end date. The agreement expires at 11:59 p.m. on the end date you choose. A six-month to one-year window is typical. Pick a term long enough for the transaction to close. If the term expires before closing, you lose the contractual right to the fee unless the agreement says otherwise.

Section 5 — Cooperating Broker’s Fees

This is the money section. The form gives you two blanks for a sale (a percentage of the sales price or a flat dollar amount) and a separate line for a lease. Fill in only the lines that apply. The form states the fee is earned when the client enters a binding agreement during the term and is payable when the sale closes or the lease is executed. An escrow or closing agent is authorized to pay the cooperating broker’s fee directly from the listing broker’s commission at closing.

Section 6 — Entire Agreement

This clause states that the form is the complete agreement between the parties and can only be changed in writing. Review it; there is nothing to fill in.

Signing, Delivering, and Storing the Agreement

Both brokers sign TXR 2402, not the individual sales agents. The form includes signature lines, printed name fields, license number fields, and date blanks for each broker. An associate line lets the individual agent who handled the referral add their name, but it is the broker’s signature that makes the contract binding.

Electronic signatures through platforms like DocuSign or Dotloop are standard practice in Texas real estate. Once both brokers sign, each side should receive a fully executed copy immediately. Download or print it rather than relying on the transaction platform to archive it for you.

Send a copy to the title company or escrow agent as well. The closing agent needs the executed form to disburse the referral fee at closing. Do not assume the other broker forwarded it.

TREC Rule 535.2 requires brokers to keep commission agreements, including referral contracts, for at least four years from the date the transaction closes or the agreement expires, whichever applies.⁴ If the transaction involves a federally related mortgage loan, the RESPA retention requirement is five years, so plan for the longer period.⁵

Who Can Legally Pay and Receive the Fee

Texas law is strict about how referral money moves. Under Section 1101.651 of the Texas Occupations Code, a licensed broker may only pay a commission to another license holder or to a broker licensed in a different state who does not conduct any negotiations inside Texas.⁶ Every referral fee moves broker-to-broker. A sales agent on either side of the deal never receives the referral payment directly from the other brokerage.

The same statute says a sales agent may only accept compensation from the broker who sponsors them, or who sponsored them when they earned it.⁶ So the receiving brokerage sends the check to the referring broker, and the referring broker then pays their agent under whatever independent contractor arrangement they have in place. Skipping a step in that chain is a licensing violation, and TREC can suspend or revoke a license when a broker pays commission to an unlicensed person, even unintentionally (as when a license has lapsed).⁷

Run both brokers through the TREC License Holder Search before you sign. If a license is expired, inactive, or suspended, the agreement is on shaky ground and paying out the fee could expose the paying broker to disciplinary action.

When Federal Rules Also Apply

If a residential transaction involves a federally related mortgage loan, the federal Real Estate Settlement Procedures Act applies on top of Texas law. RESPA Section 8 generally prohibits kickbacks and fee-splitting for settlement services but carves out an exemption for cooperative brokerage and referral arrangements between real estate agents and brokers, as long as everyone involved is acting in a real estate brokerage capacity.⁵ The exemption does not cover fee splits between a real estate broker and a mortgage broker, so don’t assume your arrangement is automatically safe if loan origination services are in the mix.

RESPA also requires that any payment bear a reasonable relationship to the market value of services actually provided. A referral fee that is wildly disproportionate to the value of the referral could be treated as evidence of a kickback.⁵

Tax reporting is the other federal piece. The broker who pays a referral fee of $600 or more during the calendar year must file IRS Form 1099-NEC reporting that payment. The IRS instructions specifically list fee-splitting or referral fees among the payments that trigger this filing requirement.⁸ If you are the referring broker receiving the fee, report that income on your return and make sure the paying broker has your correct taxpayer identification number.

Mistakes That Cost You the Fee

Most referral fee disputes come down to vague paperwork or broken timing. A few precautions make the difference between a clean closing check and a months-long argument.

Get the agreement signed before the referral happens. A verbal promise to work something out later has no teeth. Texas REALTORS guidance makes clear that compensation listed on a broker’s website does not create a binding obligation; the brokers must sign an agreement.⁹
Set the term long enough. If your agreement expires in 90 days but the transaction takes five months to close, your claim to the fee is gone. Match the term to a realistic timeline.
Name the client explicitly. An agreement that doesn’t identify the client leaves room for the receiving broker to claim the client found them independently.
Put any changes in writing. The entire-agreement clause in Section 6 means side deals and email promises outside the form carry no weight unless both brokers signed a written amendment.

When the fee is substantial, review the executed agreement with your broker before the transaction reaches closing and confirm the title company has a copy in the file.

1
Texas REALTORS. Flowchart for Using Paragraph 12 and Compensation Agreement Between Brokers
2
Texas Real Estate Commission. Texas Real Estate Commission
3
Consumer Federation of America. Real Estate Referral Fees: Do They Harm Consumers?
4
Cornell Law Institute. 22 Texas Admin Code 535.2 – Broker Responsibility
5
Consumer Financial Protection Bureau. Prohibition Against Kickbacks and Unearned Fees
6
State of Texas. Texas Occupations Code OCC 1101.651
7
State of Texas. Texas Occupations Code 1101.652 – Grounds for Suspension or Revocation of License
8
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
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Texas REALTORS. Answers to Your Questions About the New Forms