Can Out-of-State Agents Send Referrals into Tennessee? A TREC Guide

Your client in Southaven, Mississippi, just accepted a job in Nashville. Or a past buyer from Dalton, Georgia, is finally ready to move up I-75 to Chattanooga. You don’t hold a Tennessee license, but you’d like to send that client to a good agent and get paid for the introduction. Can you? Yes, as long as the money moves the right way. Tennessee law allows out-of-state referrals, and a brokerage built around Tennessee real estate referral services handles these deals regularly. The details still matter. Get them wrong, and you could lose the fee or put a Tennessee broker in a bad spot with the Tennessee Real Estate Commission (TREC).

Here’s what’s allowed, what isn’t, and how a referral fee actually gets from a Tennessee closing table to your bank account.

Are Out-of-State Referrals in Tennessee Legal? What TCA 62-13-302 Says

The rule sits in Tennessee Code Annotated § 62-13-302. In plain terms, a licensed Tennessee broker can pay a commission to a licensed broker in another state, as long as that out-of-state broker doesn’t conduct any of the negotiations in Tennessee. TREC repeats this in its own published FAQs.

So the referral itself is fine. Introducing a client and handing them off isn’t the problem. Doing the work of a Tennessee agent without a Tennessee license is.

Why a Tennessee Referral Fee to an Out-of-State Broker Goes Broker to Broker

The statute talks about one licensed broker paying another. Most states structure referrals this way anyway.

Tennessee applies the same principle at home. An affiliate broker here can only be paid through their principal broker. So when a Tennessee firm pays an out-of-state referral fee, the check goes from that brokerage to yours. Your broker then pays you under your own agreement and your own state’s rules.

If you’re a licensed salesperson in Georgia or Kentucky, bring your managing broker in early. They’re the one who signs the referral agreement and receives the payment.

What an Out-of-State Agent Can’t Do in Tennessee

This is where agents get tripped up. The referral is legal. The urge to “help out a little more” usually isn’t.

TREC is direct about it: a licensee from another state can’t partner with a Tennessee licensee to do business that requires a Tennessee license. The Commission says the license has to be obtained by the individual. There’s no setup where your Tennessee contact holds the license, and you do the legwork.

Can You Show Homes in Tennessee with an Out-of-State License?

No. Showing property, negotiating price, writing offers, and advising on terms all require a Tennessee license when the property is in Tennessee. Once you start negotiating, you’ve left referral territory, and § 62-13-302 stops protecting the arrangement.

You can still stay in touch with your client. Just let the Tennessee agent run the transaction.

One more point. Tennessee brokers can’t pay anyone who isn’t licensed for work that requires a license. That’s why an active license in your home state matters. If yours has lapsed or gone inactive, a Tennessee broker generally has no legal way to pay you.

Does Tennessee Have Real Estate License Reciprocity?

Not the way most agents hope. Tennessee doesn’t have a formal reciprocity agreement with any state that hands an out-of-state licensee a Tennessee license automatically.

What it does have is a substitution process under TCA § 62-13-314. Depending on your home state, some requirements may carry over, but out-of-state applicants still have to pass the Tennessee state-law portion of the exam. Requirements change, so check TREC’s current reciprocity page before you apply.

For a one-time referral, none of this applies. You don’t need a Tennessee license to collect a properly structured referral fee. Licensing only becomes your question if you plan to work in Tennessee yourself.

How an Out-of-State Real Estate Referral Fee in Tennessee Gets Paid

The mechanics are simple. They just need to be in writing before the client signs anything with the Tennessee agent.

It starts with a written referral agreement between the two brokerages. That document names both firms, the client, the fee percentage, and when it’s due, which is usually at closing. A standard referral form from your brokerage works fine.

There’s no state-set referral percentage in Tennessee. The brokers negotiate it, and it comes out of the receiving brokerage’s commission on that deal. It isn’t an extra charge to the client.

Clean handoffs prevent most disputes. A short email introducing your client to the Tennessee agent, with both brokers copied, creates a clear record of who sent whom.

Payment comes after closing. The Tennessee brokerage pays your brokerage, and your brokerage pays you. If the deal falls through, there’s typically no fee.

And before your first referral across state lines, check your own state’s rules on receiving fees from out of state. Most allow it through the broker, but it’s your license, so confirm it.

Tennessee Border Markets Where Out-of-State Referrals Come Up

Tennessee borders eight states: Kentucky, Virginia, North Carolina, Georgia, Alabama, Mississippi, Arkansas, and Missouri. Only Missouri has as many neighbors, so a lot of agents work within a short drive of the Tennessee line. Add mild winters, no state income tax on wages, and a mix of strong regional employers, and Tennessee pulls in buyers from every direction.

Mississippi and Arkansas Agents Referring Buyers to Memphis

Memphis sits where Tennessee, Mississippi, and Arkansas meet, with I-40 and I-55 tying the region together. FedEx is headquartered here, and the logistics industry shapes much of the local job market. An agent in DeSoto County, Mississippi, or West Memphis, Arkansas, often meets clients who end up buying on the Tennessee side, in Shelby County neighborhoods like Germantown, Collierville, or Midtown around 38104.

Georgia Agents Referring Clients to Chattanooga

Chattanooga is minutes from the Georgia line, with I-75 and I-24 running through it. Volkswagen’s assembly plant and a growing downtown keep relocation steady. Agents in Catoosa, Walker, and Whitfield counties regularly have clients comparing both sides of the border before settling in Hamilton County areas like Ooltewah, East Brainerd, or the 37402 downtown zip.

Kentucky Agents and Clarksville Referral Fees

Fort Campbell straddles the Kentucky-Tennessee line, and military families moving in often look at homes in Clarksville and Montgomery County, including the 37040 and 37043 zips. Kentucky agents working with relocating service members see these moves often.

Virginia Agents and the Tri-Cities

Bristol is split down State Street, Virginia on one side and Tennessee on the other. Along I-81 and I-26, Virginia agents frequently have clients who’d rather buy in Johnson City, Kingsport, or Bristol, Tennessee (37620). Eastman’s headquarters in Kingsport and the region’s healthcare systems are steady sources of transfers.

Relocating to Nashville: The Referral Every Agent Gets Eventually

Nashville, where I-65, I-40, and I-24 meet, draws buyers from across the country. Healthcare is the city’s anchor industry, with HCA Healthcare based here, and music, tech, and higher education fill out the rest. Sooner or later, almost any agent has a past client relocating to Nashville, Franklin, or Brentwood.

Moving to Tennessee? How to Keep Earning Referrals Here

Maybe you’re the agent moving to Tennessee and want to reach out to your network back home to keep sending business your way.

Start with the license. Since there’s no automatic reciprocity, you’ll go through TREC’s process and pass the state law exam. After that, you need a principal broker, because a Tennessee license isn’t active without one.

Here’s what surprises many transplants: TREC doesn’t offer a “referral-only” license status. If you’d rather focus on referrals than full-time sales, the Commission says you have to join a referral-only firm. You still keep E&O insurance, continuing education, and renewals current, and your license must stay active, not retired, to receive a fee.

That’s where a referral-focused Tennessee brokerage helps. CURB lets Tennessee licensees hang their license, send and receive referrals, and skip NAR, Tennessee Realtors, and local board dues. Our homepage lists the cost at $39 a month with no hidden fees.

New to referral work in Tennessee? Our guide on becoming a real estate referral agent in Tennessee covers setup step by step. If you want to know whether the model holds up with TREC, we explain it in Is parking your real estate license legal in Tennessee.

Ready to Handle Out-of-State Referrals in Tennessee the Right Way?

Out-of-state referrals into Tennessee work when everyone stays in their lane. You introduce the client. A Tennessee agent does the licensed work. The fee moves broker to broker under a written agreement. That’s the whole formula.

Whether you have a client headed to Memphis, Chattanooga, Clarksville, or Nashville, or you’re moving here and want to keep a referral pipeline open, we can help you set it up correctly. Look over our license parking and referral services, then contact our Tennessee broker with your questions, or call 888-279-4230.

FAQs

Can an out-of-state agent get paid a referral fee in Tennessee?

Yes. Under TCA § 62-13-302, a Tennessee broker can pay your broker, as long as you don’t negotiate any part of the deal in Tennessee.

Does Tennessee have real estate license reciprocity?

No formal reciprocity exists. Out-of-state applicants must still pass the Tennessee state-law portion of the exam.

Can I show homes in Tennessee with an out-of-state license?

No. Showing, negotiating, and writing offers on Tennessee property all require a Tennessee license.

Does TREC have a referral-only license status?

No. Agents who only want to refer must join a referral-only firm and keep their license active.

How do I start receiving real estate referrals in Tennessee?

Get licensed, then affiliate with a referral-friendly broker like CURB. Contact us or call 888-279-4230 to get set up.