If you’re a real estate agent, you know how difficult the real estate industry can be. Sometimes the well is dry and you’re desperate for leads, other times you’re overwhelmed with potential leads, many of them irrelevant or outside your purview or area of expertise.
Any smart real estate agent understands that finding the right leads can lead to the right client conversions. However, locating and securing these new clients may be significantly more time-consuming and resource-draining than ever expected.
Real estate agents struggling with this common and head-scratching problem are not alone. Fortunately, various networks, referral agents, and third-party platforms can assist.
At eXp Realty, agents like Elizabeth Riley can help agents, new and old, make the most of any referral.
With the professional guidance of a referral company, any real estate professional can reduce time and effort, maximize potential conversions and profit, and widen one’s reputation within the industry.
The following sections cover real estate referrals and how they benefit clients, referring agents, and those receiving the referrals. All parties can find this article helpful as they approach every lead, sale, transaction, and market variable in their desired area.
What Is a Real Estate Referral Agent?
Generally, the real estate referral agent offers one primary service. A referral agent works to help prospective buyers and sellers find trustworthy professionals to facilitate transactions.
In other words, if you’re an agent, a referral agent is both helping the prospective client by referring him or her to you, and helping you by saving you time, effort, and money on lead generation. With this service, agents of all types can reap the benefits.
If the transaction is closed, the referral agent will take a portion through the referral fees. However, a typical referral fee may differ depending upon various agent criteria, agency requirements, and state and local laws.
What Do Referral Real Estate Agents Do?
As previously mentioned, referral agents take the steps necessary to align a prospective client with a prospective licensed real estate agent or professional to maximize the likelihood of a transaction. In this sense, referral agents service both their fellow agents as well as potential buyers and sellers.
However, the current industry is not like it used to be. Brick-and-mortar brokerages and online agencies now have access to countless real estate listing services, marketing and advertising platforms, and other cutting-edge industry resources.
For every national association or nationwide network of brokers, agents, and property listings, there is fierce and ongoing competition.
Fortunately, through top-notch referral services, referral agents can make it easier to obtain more leads and increase conversions as well.
A real estate referral agent will typically go through the following steps or processes.
Earn a Real Estate License
Generally, a referral agent will have to take some kind of realty course and pass a licensing exam. Following the licensing process, the real estate agent can find a licensed real estate brokerage, establish a professional rapport, and begin marketing his or her referral service.
Client procedures, referral fee structures, and guidelines will differ from broker to broker. Every referral agent must understand the particular rules and regulations in play.
Although your clientele may sometimes give you referrals, it is wiser to work with someone who has an actual real estate license. The upside can be very attractive.
Market to Prospective New Clients
This can be done in a variety of ways. By working with various agents, brokers, realty networks, real estate attorneys, and other real estate professionals, a real estate referral agent can build a substantial reputation in the market.
Clients want somebody experienced, knowledgeable, and truthful. The best referral agents will have track records of successful transactions, healthy working relationships with fellow professionals and clients, and an approachable and friendly demeanor.
Through regular social media interactions, reputable website content, and other prominent media connections, a seasoned real estate referral agent can leverage his or her professional status on behalf of clients everywhere.
Help Streamline the Process
Once advertising and marketing have generated more leads and brought in buyer after buyer, or seller after seller, a referral agent can help ensure the process goes smoothly.
This entails contacting both the referred client and the real estate professional offering services. A real estate referral agent will spend time discussing any fee agreements, property procurement and relinquishment processes, and other important considerations in closing the real estate transaction.
Referral agents may also follow up to establish lasting professional relationships with both clients and fellow agents. This will increase future opportunities for referrals, conversions, and commissions.
Secure the Real Estate Referral Fee
Under the Real Estate Settlement Procedures Act (RESPA), it is illegal for real estate agents to give kickbacks and real estate referral fees to other parties in the transaction. Although some referrals may come from past clients, it is illegal to reward these individuals or parties.
Only referrals from licensed real estate agents can be rewarded for the referral.
A typical real estate referral fee, or finder’s fee, may reach as high as half of the real estate commission paid but is usually within the 20 to 25 percent range.
Importance of Referral Fee Agreements
This is why real estate professionals must work with expert referral specialists before engaging in any type of referral, whether they are the agent receiving referrals or making referrals. A referral fee agreement should be the first important step in any real estate referral process.
It doesn’t matter if you’re a sterling realty agent with years of service, closing big-money real estate transaction after transaction, or if you’re fresh and green to the industry. In the end, real estate referrals deserve a deeper look.
Again, always be sure to discuss with a top-notch broker or local expert in referrals before you begin to receive referrals, give referrals, or discuss any real estate referral agreement with other agents.
Real estate referrals have the potential to help you tremendously. They can open up invaluable time while providing you the professional freedom to make income without the traditional stressors and obligations associated with real estate agent services.
Benefits of Referral for Real Estate Business
Every real estate agent can use a helping hand from time to time. More than a helping hand, real estate agents want a predictable, dependable method for generating leads, converting leads, and closing deals with efficiency, effectiveness, and substantial profits.
This is where a real estate referral agent can be extremely helpful.
Whether transacting residential real estate, commercial real estate, or industrial real estate, every licensed realtor needs to know how to capitalize on client needs. Most agents struggle with establishing a professional rapport that keeps clients coming back.
Fortunately, a referral agent can reduce these difficulties significantly. Whether you become a referral agent or are a client of a referral agent, your business has a lot to gain from such a service.
Beyond mere money, the business benefits of real estate referrals are numerous.
Topnotch Lead Generation
A good client referral can deliver results very quickly, expediting the screening, listing, negotiating, and transacting processes by days, weeks, months, and even years. When real estate agents spend resources seeking buyer after seller after buyer, it can become wasteful.
This is time that should be devoted to other critical aspects of the profession, such as scheduling home inspectors, filing paperwork, calculating loans, dealing with mortgage brokers, and more.
With a real estate referral, agents don’t need to lose all those days and nights simply trying to get the ball rolling. A good real estate referral will fill the funnel with potential sales.
An expert real estate referral agent delivers already pre-screened high-quality leads that are more likely to sell or buy than the average Joe.
Why Real Estate Referrals Are Unique Leads
Unlike other marketing mechanisms and tools, which can be cost-prohibitive, real estate referral methods can keep you from having to pay an exorbitant amount of money just to find a prospective client.
They are one of the best ways to increase high-quality, dependable lead generation.
With the use of search engine algorithms, keyword optimization, social media adverts, and landing page websites, potential clients can be readily identified for their exact interests and needs.
It’s a win-win. Potential clients find the real estate agents most likely to service their needs, and real estate agents find potential clients most likely to need their service.
Real Estate Profile Expansion
Online brokerages, real estate firms, and professional real estate businesses have made expanding your real estate profile easier than ever.
But only if you know what you’re doing.
The internet is seemingly infinite. Because there are so many opportunities for any real estate agent, that means there are also many opportunities for others.
This means that the online realty network is incredibly saturated, complex, and competitive.
Fortunately, a real estate referral company can offer you an optimized service to push your business through the noise and separate your agent brand from the services of others.
Advantages of Online Accessibility
With the best referral program, potential buyers can find your profile on various listing websites and immediately present details about their goals, expenses, desired markets, preferred property type, and more.
These comprehensive forms then present real estate professionals directly with everything they need to know from leads that are already primed.
This is far superior to dealing with lukewarm and cool leads who are undecided as to their needs, their desires, and the type of real estate professionals they want.
Additionally, real estate referral fees through third-party marketplaces are often far smaller than those through traditional agents. Not to mention, third-party platforms can draw upon vast interconnections. Ultimately, this may generate better and more numerous leads than any traditional broker ever could.
Through various marketplaces and companies, you can benefit from referral agents rather quickly.
Say you close on a house sale in one state and then the client is buying a house across the country. If you can establish a rapport with another agent in that state, the two of you can create a referral relationship that is long-lasting and mutually beneficial.
Your brokerage team might also be able to help you expand your real estate referral network.
Lasting Client Trustworthiness
Success in real estate is a two-way street. Clients need to trust that you can do what you say you can, and you need to trust that your clients will stand by you with that trust. After all, there is no gross commission if the client bails.
Whether prospective clients, current clients, or past clients, you want every client to think of you positively. You want to be a real estate professional known for delivering results, showing transparency, and staying accountable.
How Realty Referrals Accelerate Growth
Through referrals, you are already pre-established as a legitimate, recognized expert in the industry. Word-of-mouth is critical, so when there are positive testimonials, documented deals, and top achievements and accolades attached to your name, your likelihood of success can only grow.
Research has indicated that client referrals stay with a given business more often than regular clients. This is likely because business success is frequently based on reputation. It’s often not what you’re selling, but how you sell it.
If you can get clients to trust you because you’ve been recommended by premiere professionals in the industry, you’ve already won half the battle.
Critical Training Methodologies
Every real estate referral is different, but when it comes to reputable referral programs, the main features are the same. The tools, technologies, and methodologies provided may allow even experienced real estate agents to make great strides.
The benefits of these instructional, motivational, and inspirational real estate referral programs are varied and empowering.
What Realty Referral Programs Can Offer
Real estate agents may benefit from sales and marketing tutorials, advertising programs, professional podcasts, email and phone support networks, and search engine optimization (SEO) strategies and software.
These training methodologies also take the form of seminars, full-scale courses, webinars, and various meetings and presentations. Some may be included as part of real estate referral program packages, whereas others may have separate real estate referral fees and costs associated.
Real estate professionals will learn how to increase lead conversions, reliably and effectively refer, plan necessary business operations, execute successful transactions, and more.
In short, many referral programs go above and beyond mere referral. These are more than lessons on referral commission and potential buyers. Rather, they represent a full-scale education any licensed realtor can utilize.
Commissions, Costs, and Real Estate Referral Fees
The referral commission paid is usually 20% to 25% of the gross commission. For the referring agent, this is a nice cut of the payout, and for the referred agent, the referral fee surely beats never having received the commission in the first place!
Oftentimes, the professional quality of a referral program can be used to boost margins. Referred clients may be willing to pay more due to ‘social proof,’ meaning that both the referral agent and agent receiving the referral mutually benefit.
In other words, a client is essentially pre-sold due to the trust and reputation established by the referring agent.
Overall, real estate referrals impart many benefits when an agent refers the clients, when an agent receives the clients, and when the clients themselves get a professional fit for their needs.
In the end, all parties can be beneficiaries, making real estate referral a promising vehicle for success in the industry. Just ensure you communicate with your broker and any other broker involved so you can optimize your earnings.
Finalizing The Referral
Referrals can be great, but at the end of the day, many real estate brokerages don’t make the cut. The pay often isn’t equitable, the transactions fall through, the networking is sub-par, and the real estate world continues to grind up and churn out well-meaning, hard-working agents and industry professionals.
In short, the industry is unforgiving. That’s why agent referrals are so crucial. You shouldn’t be stressed, wasting valuable hours looking for leads that don’t pan out, spending your cash and resources only to never get the pay you need or deserve.
You shouldn’t be stuck with a brokerage that is bringing you down. Never let bad brokerage sidetrack your career when you could be enjoying a level of success that you can’t imagine.
At eXp Realty, we know what it takes to accelerate your growth and supercharge your career. Whether you’re a veteran professional with decades of transactions, or a fresh-faced baby in the industry, we service every client’s needs.
We are not your typical broker, realty firm, or team of business minds. With global reach and cutting-edge, cloud-based 24/7 access to top market tools, technologies, and expertise, eXp Realty is a leader in the industry.
The longer you wait, the more you miss out. Make the most of your real estate license. Become the professional you’re meant to be.
Contact Elizabeth Riley and her sterling team today and learn how real estate referral can help you achieve the career of your dreams.