What type of fees can be legally transferred between brokers under RESPA?

Under the Real Estate Settlement Procedures Act (RESPA), the types of fees that can be legally transferred between brokers are generally referral fees. RESPA governs the conduct of real estate transactions, specifically the way settlement services are conducted. While it restricts the payment of kickbacks and unearned fees, it does allow for the sharing of referral fees when one broker refers a client to another broker, as long as both parties are legally licensed to conduct business and the fees are disclosed properly.

Referral fees are compensation for directing clients to another broker's services, which can be seen as a legitimate business practice as long as it adheres to the guidelines stipulated by RESPA. This process is designed to encourage collaboration and ensure that consumers receive the best possible service through referrals while maintaining transparency within the real estate industry.

In contrast, closing costs, commission splits, and processing fees are typically governed by the contractual agreements between agents and their respective brokerages, rather than being subject to RESPA regulations regarding referral compensation. Closing costs are associated with the transaction and not typically transferred between brokers, and commission splits are determined internally among agents and their brokers. Processing fees also relate to specific brokerage operational practices and do not fall under the same category as referral fees regulated by RESPA.