In a world where some brokerages' heads may have been turned by paid-for internet leads from portals, the agent-to-agent referral system still dominates agents' lead generation and is the foundation of many top producers' businesses, according to a new report from ReferralExchange and the Council of Residential Specialists (CRS), a National Association of Realtors affiliate."The Agent-to-Agent Referral Economy: A study of the power of referrals in real estate," which was conducted and executed by brand and marketing agency, 1000watt, set out to explore every part of the referral process and found that a typical referral had a closing rate of around 50 percent for the majority of respondents. 1000watt interviewed 1,435 real estate agents via multiple-choice and open-ended questions in an online survey, then followed up with a few via phone.Cold internet leads were not nearly as fruitful, said the authors."These leads amounted to names and email addresses of people who were a...
- The close rate of a typical referral (inbound or outbound) was around 50 percent for the majority of report respondents.
- The majority of respondents (75 percent) make $10,000 or less annually by referring business to other agents.
- Most respondents expect to receive 25 percent of the total commission when they refer out and prefer to pay around 25 percent when they receive a referral.
- Nearly 40 percent of inbound referrals come from the agent’s sphere, with a majority of those coming from past or current clients.
- Another 40 percent of inbound referrals come from other agents.