Wisconsin Real Estate Sales Practice Exam

What types of referral fees may be paid or received without disclosure to the parties in a real estate transaction?

1. Any amount between the parties

2. R.E. licensee to R.E. licensee

3. Only with buyer's consent

4. Referral fees must always be disclosed

The correct answer is: R.E. licensee to R.E. licensee

In real estate transactions, referral fees that are exchanged between licensed real estate professionals do not require disclosure to the parties involved in the transaction. This is a common practice as it is part of the internal compensation structure among agents and brokers. Such referral fees are often negotiated and agreed upon privately between the real estate licensees. This practice is typically regulated by state laws, which recognize that licensed professionals have a level of understanding about market practices and compensation structures. Therefore, as long as the transaction involves licensed individuals who are familiar with these practices, no additional disclosure to the consumer parties is mandated. In contrast, referral fees that might involve buyers or sellers generally require consent or knowledge from those parties. This is to ensure transparency and maintain trust in transactions where consumers may be directly affected by the fees involved.