A real estate referral program is a simple, written promise: when someone sends you a buyer who books, you thank them in a way agreed in advance. For developers and brokers in India, the best referrers are happy buyers, residents of your past projects, channel partners and people in the local community. A good program makes referring easy, pays rewards on time, and stays within the RERA and tax rules.
This guide explains who to ask, when to ask, how to set rewards, the legal points to check, and how to track referrals so nobody is forgotten.
Why referrals work in real estate
Buying a home is one of the biggest decisions a family makes, and buyers look for someone they can trust. A recommendation from a friend or relative who already bought from you carries that trust. In Nielsen's Global Trust in Advertising survey (2015), 83% of online respondents said they completely or somewhat trusted recommendations from people they know, more than any form of advertising.
Referred buyers also arrive with context. They have heard what the project is like, how the builder or broker behaves, and roughly what it costs. That usually means fewer basic questions and more serious conversations. Referrals don't replace ads and follow-up, but they add buyers you didn't pay to reach. Our guide on how to generate real estate leads shows how referrals fit with other channels.
Who can refer buyers to you
Past buyers and residents. The most trusted referrers, especially after possession, when they live in the home and neighbours visit.
Current buyers in under-construction projects. They often know others looking in the same area, and a good construction update gives them something to share.
Channel partners and brokers. Professionals who bring buyers for a commission under a written agreement. Our guide to channel partners in real estate explains how those agreements work.
Local professionals. Chartered accountants, interior designers, architects and others who meet people planning to buy. Be careful here: if they refer regularly for money, see the RERA section below.
Your own team and their networks. Staff outside sales can refer friends and family under clear rules.
Ask when buyers are happiest, such as at key handover.
When to ask for a referral
Ask when the buyer is happiest, not when you need sales. Good moments include:
Right after booking, when the excitement is fresh and they are telling family and friends.
When the home loan is approved or the agreement for sale is registered: a big relief.
At key handover, the most emotional moment in the whole process.
After you solve a problem well. A complaint handled quickly often creates a loyal supporter.
Keep the ask simple and low-pressure. A short WhatsApp message works well:
Congratulations on your new home, {{name}}. If any friend or relative is also looking, I'd be glad to help them the same way. You can share my number: {{number}}.
There is no single right reward. Common choices for referrals by buyers include:
A discount or credit on the referrer's remaining payments or maintenance.
A gift, such as appliances, furniture vouchers or a modular kitchen upgrade.
A benefit for the new buyer too, such as a waiver on a charge, so both sides gain.
For professionals and channel partners, a commission under a written agreement.
Whatever you choose, write down:
What counts as a referral: for example, a buyer who was not already in your records and who names the referrer before or at the first site visit.
When the reward is earned: usually once the referred buyer's agreement for sale is registered, or after a set number of payments, so you don't pay for bookings that are cancelled.
When it is paid: a fixed number of days after it is earned.
What happens if two people claim the same buyer: usually the first one recorded in your system.
Pay on time, every time. A late or disputed reward turns a supporter into a critic, and they will tell people that too.
RERA and tax rules to check
RERA agent registration. Section 2(zm) of the Real Estate (Regulation and Development) Act, 2016 defines a real estate agent as someone who negotiates or acts for another person in a sale and receives remuneration or commission for it, and Section 9 requires agents to register with the state RERA before facilitating sales in registered projects. A buyer who once recommends a friend and receives a thank-you gift is very different from someone who regularly brings buyers for a fee. If a person refers buyers as a regular business, work with them as a RERA-registered agent or channel partner. Check the position with your state RERA or lawyer.
TDS on commission. Commission payments are subject to TDS under Section 194H of the Income Tax Act. The rate was reduced to 2% from 1 October 2024, and the yearly threshold below which no TDS applies is set in the Act. Confirm the current rate and threshold with your chartered accountant.
GST. Brokerage and commission services generally attract 18% GST when the person providing them is GST-registered. Pay against a proper invoice.
Gifts and discounts. Rewards to individuals can have their own tax treatment. Ask your CA how to record discounts, credits and gifts before you launch the program.
Most referral programs fail because nobody records who referred whom. Keep it simple:
Add a "referred by" field to every lead in your CRM or sheet, and fill it in on the first call.
Give referrers an easy way to share: a short WhatsApp message with your number, a referral card, or a link to your project page with a code they can quote.
Ask every new lead "How did you hear about us?" Many referred buyers don't mention it unless asked.
Tell the referrer what happened. A message like "Your friend visited today, thank you!" keeps them involved, even before any reward is due.
Review monthly: referrals received, site visits, bookings and rewards paid.
Unclear terms, so referrers and the company remember the deal differently.
Late rewards, which hurt trust more than having no program at all.
Asking unhappy buyers. Fix the problem first; ask later.
Paying regular referrers commission without checking RERA rules.
Over-promising. Don't let referrers promise returns, discounts or dates you haven't agreed to. They speak for your brand.
Forgetting the referred buyer. They expect the same quality of service their friend received. Deliver it.
Getting started this month
Write a one-page referral policy: who can refer, the reward, when it is earned and paid, and how disputes are settled.
Add a "referred by" field to your lead records.
Make a list of buyers who booked or got possession in the last year and were happy.
Send each one a personal thank-you message with the referral offer.
Add the referral ask to your booking and handover process, so it happens every time.
Referrals grow best when every buyer has a good experience from the first enquiry onward. If you want to see where enquiries slip through your process today, get a free marketing audit of your ads, landing page and follow-up.
This article is general information, not legal or tax advice. Rules differ by state and change over time: check the current RERA rules in your state and confirm tax treatment with your chartered accountant.
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A written promise that when someone sends you a buyer who books, you thank them in a way agreed in advance, such as a discount, a gift or, for professionals, a commission.
Who are the best people to ask for real estate referrals?
Happy past buyers and residents, current buyers in under-construction projects, channel partners and brokers, local professionals such as CAs and interior designers, and your own team's networks.
When should I ask a buyer for a referral?
When they are happiest: right after booking, when the home loan is approved or the agreement for sale is registered, at key handover, or after you solve a problem well.
What rewards work for real estate referrals?
A discount or credit on payments or maintenance, a gift such as appliances or furniture vouchers, a benefit for the new buyer too, or for professionals a commission under a written agreement.
When should a referral reward be paid?
Usually once the referred buyer's agreement for sale is registered, or after a set number of payments, so you do not pay for cancelled bookings. Then pay within a fixed number of days, every time.
Does someone who refers buyers need RERA registration?
Section 2(zm) of the RERA Act defines an agent as someone who acts in a sale for commission, and Section 9 requires agents to register. A one-off thank-you gift differs from regular referrals for a fee. Check with your state RERA or lawyer.
Is TDS deducted on referral commission?
Commission is subject to TDS under Section 194H of the Income Tax Act, at 2% from 1 October 2024, above a yearly threshold set in the Act. Brokerage generally attracts 18% GST if the provider is registered. Confirm with your CA.
How do I track real estate referrals?
Add a referred-by field to every lead, ask every new lead how they heard about you, give referrers an easy way to share, update the referrer on progress, and review referrals, visits, bookings and rewards monthly.
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