Why LFRO status matters
NAR’s LFRO policy addresses certain licensees who work exclusively in a qualifying referral operation rather than carrying out full-service brokerage activities. For eligible licensees, the REALTOR® association may exclude them from a Designated REALTOR®’s variable-dues calculation when the required certification and other conditions are satisfied.
The California DRE continues to regulate the underlying real estate license and responsible broker. A DBA name alone does not automatically qualify someone for an LFRO waiver.
What an LFRO associate may do
Under the LFRO classification, the associate’s permitted licensed activity is limited to referring clients and customers. Referrals are made through the brokerage under its written policies, and compensation is paid only as legally and contractually authorized.
NAR’s LFRO language also includes a “substantially exclusive” referral relationship to the REALTOR®’s brokerage company. This is why program structure and association confirmation matter.
Activities outside the referral-only scope
A qualifying LFRO associate cannot engage in ordinary listing, selling, leasing, renting, managing, counseling or appraising activities while relying on the LFRO exemption. Showing homes, preparing offers and negotiating for clients are not part of NEXA’s referral-only role.
The LFRO associate cannot participate in or subscribe to MLS services in a manner inconsistent with the exemption. If the associate returns to full-service sales, licensing, broker and association arrangements must be updated appropriately.
Do LFRO agents automatically avoid REALTOR® and MLS dues?
No. Any exemption is contingent upon eligibility, the appropriate association certification and the applicable membership/MLS rules. The designated brokerage must follow ongoing disclosure and certification requirements. NEXA reviews eligibility and explains required next steps before a participant changes membership arrangements.
For primary guidance, read the NAR LFRO policy. The California DRE maintains state license information.
How this connects to NEXA
NEXA Realty Referral Network is the referral-only program of HomeBased Enterprises, Inc., CalDRE #01316623. Affiliates must perform referral-only activity, maintain required licensing and follow the brokerage’s written referral procedures. Ask NEXA for current membership and qualification details.