Agent referrals can be incredibly helpful for both those on the giving and the receiving ends, but they need to be handled with care. Here are 11 ways to avoid a referral gone wrong.

Inspired daily by the takeaways learned in the field, top producer Cara Ameer has 18 years under her belt with licenses in both Florida and California. A self-proclaimed fitness fanatic, she loves working out, finds cleaning and organizing relaxing and can’t say no to strawberries.

So you have a customer or perhaps a lead (friend of a customer’s cousin whom you have never met) that needs real estate help in another city or state. Depending on where that may be and the price point, as much as you’d love to jump on a plane and go along for the ride (and you just might anyway), you’ve been tasked with finding an agent that can assist them.

Sigh. Where to start. If you’ve been in the business for a few years, chances are you’ve been on the receiving end of what’s called a broker-to-broker referral. Somehow, someway, an agent in another area contacts you about referring a buyer or seller to you.

If you are part of a large national network, you have been selected by the powers above (your manager, relocation director or otherwise) as a good match for the customer. Sometimes a referral happens through social media and your name was mentioned.

However it happens, it can often be a mystery when the lead comes through as to what it is the customer is really trying to do. There is often more you don’t know upfront. Details, if any are vague as to price range, type of property and the purpose of the move (job relocation, elective move, vacation home, retiring, etc.).

Broker-to-broker referrals are like gold. For the referring agent it is passive income, and for the receiving agent it is found business they otherwise would have never gotten.

However, this sector of the market is often handled poorly by both referring and receiving agents. It is a bit like Russian roulette with a name and phone number (and email, if you are lucky) that gets punted to an agent on the receiving end.

Sometimes when an agent reaches out immediately, they get no response from the referral for days and weeks. Calls, emails and texts go unanswered. No response from the referring agent either, who initiated the referral in the first place.

Sometimes, the opposite happens and the agent receiving the referral drops the ball in reaching out to them promptly and the customer is turned off. Or even worse, what starts out as a seemingly good experience goes south real fast. The agent doesn’t want to make time to service the lead, is too busy, does not have the market knowledge needed or checks out once the sale is made or the listing goes under contract.

When this happens, the agent’s lack of service impacts the credibility of the agent that generated the referral and to the source of that referral in the first place. Perhaps a longtime customer was trusting you to help a family member or a dear friend.

When a referral does not go well, you may find yourself having to save face and having to do major damage control to the very people that entrusted you in the first place. Relationships are fragile and could be damaged as a result, which could end up in lost business to you as the agent that initiated the referral in the first place.

In order to ensure a successful referral experience, here are 11 ways to handle the placement and receiving of referrals for those making the referral and those receiving it.

For the referring agent

1. Details matter

If you are the agent placing the referral, don’t you think you owe it to the customer to get as much information from them as you can? Even if you don’t know them, ask the person that connected you for their contact information. Reach out and call. It is that simple.

There is only so much that email and text may convey and you may miss a lot of critical details by not talking to them in person. Plus, this will give you an idea of their personality type, communication style, etc., that will help you in finding the right agent to assist.

There is something in it for you too, so don’t just throw it against the wall hoping it will stick. Minimal information will breed a minimal outcome. I recall several broker-to-broker referrals that I have received whereby there was minimal information provided and several attempts to contact the referring agent before attempts at reaching the customer ended futilely.

In one case, I was attempting to speak with an agent who was at a noisy sports event and they had never met the customer before, but had helped them on a home purchase a few years ago — all done by phone, email, etc. They couldn’t tell me much — even what the person did for work — and I was told very generally they may rent or buy.

Turns out the buyer was a doctor. The search needed to revolve around a short commute to the hospital due to the nature of their job. I was able to extrapolate all of that once I made contact with the customer but, still.

2. Research

Agents seek agents to assist outside of their market in numerous ways. If your company has a relocation department, that is often the first place to start with, and company policy may require that. Perhaps your relocation department can get some recommendations from the brokerages in the network where you need to place the referral. However, names are only that; there are no guarantees.

I have been given names of agents that came recommended from their relocation department only to have quite the opposite experience with them. Get online and start researching the suggested agents. This can be quite time consuming, but research profiles, look at their listings and sales, see if you can find testimonials.

Everything online is amped up for maximum effect and the agent’s online presence may be more hype than reality. Everyone is a top producer so it can be difficult to discern who may be the real deal.

Conversely, agents with little to no online presence other than the bare minimum on their company website or other digital platforms also says a lot (or very little) too. They could be great people, but if they haven’t taken the time to present their value proposition online, that may be an indication of complacency, being average and just getting by.

3. Interview

Once you have identified a few agents that seem like a good fit, contact them to discuss placing the referral. Is the agent easy to reach? Do they respond promptly? Ask them what price ranges they tend to work with, what their current workload is like and if they have time to assist.

Find out how long they’ve been selling in their current marketplace, how long they have been with their particular brokerage, how many current listings they have, percentage of sellers vs. buyers they work with, etc. If this is a listing referral, ask what kind of activities and tools they utilize to sell a home.

Also find out if the agent is the team lead or is part of a team, if they have an assistant, showing partner, etc., so you will know who else could be involved in servicing the customer.

Many times, a referral in a lower price range (defined by whatever that is in your particular real estate market) may not be given the same time and attention as a buyer or seller in a more substantial price range.

Communicate your expectations about the referral (including expected referral fees) and how all will be handled to make sure the agent(s) you are speaking with are on the same page. You will get a good feel from the conversation as to if the agent may be a good fit for the customer or not.

Depending on the buyer or seller need you may have to go further than just a conversation with the agent. If this involves placing a VIP or a buyer or seller with a more involved property such as a ranch, farm, winery or luxury property, you may need to do more sleuthing and ask for customer and/or vendor references to get a sense of these people’s experiences with the agent and also to get an idea of the kind of service providers they work with (title, escrow, mortgage, etc.) so the customer knows what to expect. It may be hard to get a true sense of the agent from just their manager, who of course will tee them up as wonderful, no matter what.

Lastly, depending on the customer, you may decide to let the customer interview the agents you’ve identified and vetted. Every buyer and seller is different. Some don’t have the time or inclination and want you to find someone to assist.

While you certainly don’t want to create more work for anyone, some buyers and sellers are more hands-on and perhaps after having a bad experience in the past, are more selective when it comes to who they will work with on their next purchase and/or sale.

In some cases, that may be the better option to go so it does not completely fall on you as the agent to decide. While an agent may say and do all the right things on the phone and in communicating with you leading up to the placement of the referral, a customer interacting with the actual buyer or seller in person may have a totally different take of the interaction.

How that agent presents him or herself in person and conducts their dialogue with an exchange of information sharing and gathering will be telling.

4. Selection

After your vetting process, once you’ve determined who will be the best fit, place the referral through your company’s referral protocols, spell everything out in writing and make sure the form is fully executed and signed by all involved and that the agent receiving a referral has a copy of the referral agreement.

Many companies have documents they facilitate for this process and keep it stored electronically as part of the referral file. Make sure expectations are communicated about updates you want to receive and how often they are to be done.

5. Check in early and often

While you don’t want to micromanage the process, stay in contact with both the customer and the assigned agent to find out how it’s going. Find out if the customer is happy with the service they are receiving and if their needs are being met.

Ask if there is anything that could be handled better or differently. This way you’ll get a heads up to any potential issues and, if needed, can provide feedback to the other agent.

If it turns out the referral is not a good fit and the customer wants to work with someone else, you can assist in making that change. The customer will feel that they have an advocate because you didn’t just match them up with someone and wash your hands of it.

As the agent receiving the referral

1. Be honest

If you are contacted about a referral opportunity and it is not in your wheelhouse (as far as area, price range, etc.) or you don’t have time to service it, please be honest and upfront about it and say so.

Don’t smile and gladly take it or try to pawn it off on another agent in the background to help you, only for the ball to be dropped and expectations not met.

2. Negotiate referral fees

This is a big no-no. Unless the referral fee being asked for is excessively high with no details provided on the front end, do not go back to the referring agent trying to knock a few percentage points off here or there. Referrals are found business and should be accepted with grace and dignity.

Trying to renegotiate the fee may be frowned upon by the referring agent and they may move on to someone else. If the referral is a listing, don’t bring up all the costs and expenses involved. They are no different than any other listing and that is part of doing business.

It is not the referring agent’s problem to reduce the referral fee because of what you may spend on photography, video and staging. That is standard today and should be expected.

If the listing is highly unusual and going to require a substantial financial investment upfront, you can diplomatically discuss that with the referring agent, but that really should not be the referring agent’s concern to worry about.

3. Don’t discount the service to the referral because of the price point

While fees come into play that eat into the actual commission made on the referral, the lead is about seizing and maximizing the opportunity.

Maybe it is only a certain price point on the sale today, but perhaps that person has lots of people they will refer to you if you do a good job. Their connections could become your connections.

Do an exceptional job and the referring agent may sing your praises and you’ll become their “go to” for anyone they have in your area.

4. Communicate, communicate, communicate

The conversation does not stop with the referring agent after the customer has been placed with you. Communicate early and often — even if it is a quick text or email letting the other agent know what is happening with the process.

If it is a buyer search, offer to loop the referring agent in on listings that are being sent to the customer so they can stay connected to the search. This may work particularly well if this is someone that the referring agent has a close relationship with.

The customer may feel they are being taken care of and watched over at the same time. If you are listing a property, keep the referring agent informed of the competition, inventory levels, how the home is priced relative to others, etc.

If it is not selling, explain why that is and what you think it will take to get the home sold. The referring agent may become your advocate, offer reinforcement and a third party opinion to the customer who may be more inclined to listen.

5. Be available

If you are going to accept a referral, then you better make sure you are available to the customer; the referring agent is expecting this as well. As obvious as this sounds, this means being accessible, reachable, available to call, text and email as well as meet in person.

There is nothing worse than a new customer being referred to an agent only to have the experience that the agent is not responding in a timely manner or it seems difficult to figure out a time to meet. If the customer is a buyer, then they are going to have an expectation of being able to see properties.

While agents are busy and often have multiple things going on at once, sometimes scheduling conflicts can happen, so make sure you have an appropriate back-up to assist, if that is the case. Perhaps it is a licensed assistant or showing partner. Be involved with the selection of properties to show.

Don’t just leave it to the customer to tell the person assisting you what it is they want to see. Let the person assisting you know how you would like the showings to be handled.

Take a hands-on approach, including crafting an itinerary along with suggestions of some things to see that they may not be aware of. If new construction is involved, contact the site agents ahead of time to let them know about your customer and coordinate a time for bringing them by and have picked out some things to show them ahead of time.

6. Be present

Being present is different than being available. This should go without saying for any customer, but this means being mentally engaged and focused on the process from end to end.

This comes particularly into play with new construction where agents sell a buyer a new home and they view their job as basically over once the contract is signed. We’ve all heard stories of this happening, and unfortunately, it happened to me with a referral who was vetted and came highly recommended for a customer that I had been asked to help find an agent to assist them with a new home purchase.

The agent checked out after the contract was signed and this was a $600,000-plus home for a first-time homebuyer. Not exactly chump change and that buyer needed guidance.

Some agents view the fact that they are paying a referral fee as translating into providing minimal service. Showing property and making an offer with a buyer, or negotiating and accepting an offer with a seller, is just the beginning.

It is important that you are engaged and involved in the process from end to end. With new construction, you need to be involved in the contract signing. If everyone is meeting in person with the site agent, then you need to be there from beginning to end.

You should make frequent visits to the home and check in with the builder for updates. The reality is, builders and site agents are often the worst at communicating with agents and tend to only communicate with the actual customer, even if you as the agent specifically ask to be kept in the loop.

Be proactive in your communication with the builder and continually bug them (for lack of a better word). Let them know you will be checking in early and often. If you are having a hard time finding out what is going on, let the customer know that.

They will appreciate your efforts. Maybe the project manager has changed or there is someone else that has started to communicate with the customer that you were not aware of. Find out who that is so you can stay connected to what is happening.

Educate the buyer on the benefits of hiring a third party home inspector to inspect the home at the different phases of construction (if the home is being built from scratch) or around the time of the first walk-through prior to closing. You want the buyer to feel that you are working for them and have their best interests at heart.

While no buyer should ever go to closing alone, you should especially never let a referral buyer go to closing alone. Have a trusted agent partner to assist if you cannot be there and make yourself available by phone.

Review the closing statement ahead of time and coordinate with the builder or listing agent of the home being purchased so the buyer has everything they need day of closing with respect to details for accessing the home, amenities, keys, mailbox number, location, how to transfer utilities, etc.

With a seller that is a referral, don’t just put the sign in the ground, never to be heard from again. Actively check in with the seller, even if there isn’t anything happening.

Keep them informed with activity updates of competing inventory in the area, along with suggestions and ideas to make the home more competitively positioned as the selling process moves forward.

Provide concierge-level service with vendors that can assist with the selling process from contractors, stagers, landscapers and mortgage lenders that can qualify leads.

While things can and do happen and there are no guarantees, by taking these steps, you can ensure a successful experience for the customer no matter what part of the referral process you are involved with, from generating the referral to receiving it.

Cara Ameer is a broker associate and global luxury agent with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Florida. You can follow her on Facebook or Twitter.

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