If you are a Massachusetts real estate agent and you wish to maintain their license active but not actively selling, you might be wondering what agencies permit such an arrangement.
This article discusses the options for agents who wish to work passively, looking at referral-based alternatives and the legislation surrounding inactive licenses in Massachusetts.
Active vs. Inactive Real Estate Licenses in Massachusetts
Massachusetts real estate licenses are either active or inactive.
Active License
The holder of this license can engage in any real estate activity, including listing properties, serving as agents of buyers, and making commissions. But they must be affiliated with a licensed broker to legally operate.
Inactive License
Active real estate activities may not be conducted by holders but may earn referral fees by referring prospects to active agents. Significantly, inactive licensees need not be affiliated with a brokerage in order to earn such fees.
Worth noting is that going inactive typically occurs at the license renewal time, especially when the agent failed to meet the continuing education requirement.
Referral-Only Brokerages: A Passive Income Stream
Agents who wish to stay in the business without the hassle of active selling find referral-only brokerages a viable alternative. Referral-only brokerages deal only with client referrals, and agents receive a commission share after a transaction is completed by a referred customer.
Benefits of Referral-Only Brokerages
• Least Responsibilities: Agents are freed from the daily selling routine.
• Flexible Commitment: Ideally for career change, semi-retirement, or seeking extra income.
• Low-Cost: Typically, these brokerages are cheaper than the traditional kind, as not many services are being provided.
A classic example is Referrals Only MA, where an inactive agent can have a referral prospect without the need for active participation in real estate transactions.
Legal Considerations for Inactive Agents
Massachusetts law permits inactive licensees to receive referral fees directly, unaffiliated with a broker, but they may not engage in any other real estate activities, such as listing or representing clients.
Inactive agents must be careful not to inadvertently do tasks that are reserved for active licensees, or they will receive penalties or license revocation.
Steps to Transition to a Referral-Only Role
Check Your License Status
See if your license is active or inactive. If active, you can choose to renew it as inactive in the next renewal cycle if you have not completed the minimum continuing education.
Research Referral-Only Brokerages
Locate referral-only brokerages that work in Massachusetts. Look at areas including fee arrangements, services provided, and reputation.
Understand the Agreement
Read the brokerage agreement carefully before joining to comprehend your role, fee sharing, and other information.
Maintain Compliance
Ensure that you abide by the activities permitted for inactive licensees so that you don’t have any legal trouble.
For Massachusetts real estate agents looking to have a passive career in the field, moving into an agent referral-only position represents a viable option.
By joining a referral-only brokerage and familiarizing themselves with the legal guidelines of having an inactive license, agents can still enjoy the knowledge and skills of being a real estate professional without the pressures of active sales.
