We live in a sharing society. Even if you feel socially independent, think about all the other ways society groups us together. Ride-hailing, cloth-swapping, tech rentals, crowdfunding — each utilizes communal effort for the greater good of all its parts.
Most companies push a collaborative ideology onto their employees. After all, creating a sense of camaraderie and community is important for a thriving business. But when you primarily work on your own, the importance of developing a strong support system doesn’t weigh as hard.
You might be fine working solo, but the benefits of creating friends in the industry can help grow your business.
Where to network with other agents
More individuals are realizing the power of collaboration. Agent advice boards on social media pages via Facebook and LinkedIn are everywhere, offering original and thought-provoking opinions on the current market. Portals offer pro advice for new and seasoned agents alike. The opportunities for conversation, growth and development are endless.
Take advantage of these opportunities. Start topics of conversation on discussion boards — subjects that don’t necessarily cause controversy but allow others to get a little passionate and express their opinions. You and another agent in the same city might be considered ‘competitors,’ but finding common ground won’t be difficult.
Beyond just making friends, consider the monetary benefits of having allies in the industry.
When to prioritize referrals
While referrals between agents bring in money, they are mostly more valuable when you’re first starting out or during the slower months when you need fresh leads. Later on, when you’ve already established a client base and a steady stream of inbound leads, it might not be worth the commission cut.
Referral fees are common but not always fair. Is there that much work put into name-dropping? No, but that agent could have referenced anyone, and it’s still money in your pocket.
These fees are much easier to justify when the referring party puts in some of the work, or at least passes along an uncomplicated lead.
“Send me clients who are preapproved and plan on buying within the next 30 days. Or buyers who want to look at only five houses, houses that I personally like,” writes Teresa Boardman.
Referral best practices
If you do decide to go forward with a referral that has a fee attached to it, first understand the guidelines of the process. For starters, always keep the client out of it.
If you work off referrals, the money details should exist between you and the other agent. Even if there’s a personal relationship between the referring party and the client — it’s best to handle things agent-to-agent, as you normally would conduct business.
Also, be sure to document everything. As is standard in real estate, there’s a specific form you have to fill out when collaborating with another agent. You can find the Realtor referral contract form here. Fees vary, but putting the numbers in writing eliminates discrepancies down the line.
Leveraging your brokerage
When first starting out, you might choose a brokerage that promotes internal networking. Try joining a team brokerage, where you start underneath a successful agent. While you’ll receive higher-quality leads than you probably could’ve on your own, it’ll cost you.
New agents on teams don’t receive 100 percent of the commission, but the deal and commission could be higher given your mentor’s notoriety and experience. Aside from the money issue, the long-term drawback is that you’re not building your personal brand as quickly.
Even without teams, many brokerages charge for internal referrals. They take a cut when an agent gives a lead to another agent.
“In my company, they do everything possible to intercept the lead, and route it through relocation so they can then charge us a referral fee once forwarded to us,” said one respondent of a recent Inman study.
Should you base your entire year’s pay off of referrals? Not necessarily, but it’s certainly an easy way to diversify and supplement your client base.
Inman Connect San Francisco is right around the corner — register now and save $200!