This article series is largely taken from the Real Estate Marketing Playbook with permission from the author.
One of the benefits of being a licensed real estate agent is the ability to legally collect a fee for referring clients to other agents. This, of course, goes both ways. Agents who have built a referral network are able to earn additional revenue by sending and receiving referrals.
The best way to become the agent who gets the referrals in your area is to build relationships by networking with agents in markets that typically move to your area. For example, an agent who does business in the gulf coast of Florida or Arizona may want to network with agents from Minnesota. A lot of retirees are “snowbirds” and own property down south where they stay during the winter months.
“When it comes to agent-to-agent referrals, this sometimes is a popularity contest, and brand loyalty may come into play,” said Joseph Magsaysay, a real estate agent with Better Homes and Gardens Real Estate Preferred Properties.
“This is the reason why I believe in building relationships. Whether it’s within NAR, your state association or within your company, relationships will always be the key. Wouldn’t you rather have other agents raving about you, so you don’t have to sell yourself? Last year, I received at least 10 referrals from different agents. It is also important that when they look you up on social media, your profile has personality and is very inviting.”
All to say, as an agent, being the top-of-mind choice is important to the growth of your business. So, if you’re looking to generate more referral-based business, here are a few places to look.
1. National conferences
National conferences are a great place to meet agents for potential referrals. However, don’t be “that guy” who just collects business cards (or in today’s virtually based world, contact information). A handful of solid relationships are better than a hundred acquaintances. While we’re at it, don’t add everyone to your generic email newsletter. That’s called spam, and we’re all getting enough of that already.
2. Facebook groups
If you aren’t able to make it to events, you can still build relationships with agents in other markets by contributing to Facebook groups. By continuing to share your knowledge and provide value to other members of the group, you’ll gain their trust.
When the time comes and someone has a referral for your area, you’ll find other members tagging you before you even see the request. Having five different people say you’re a recommended agent for your area looks a heck of a lot better then you replying to promote yourself.
3. Online profiles
If you’re with one of the major real estate brands, you’ll likely have a referral network in place. Be sure to fill out your profile completely so that you have the best chance to be selected. Even if you’re with a smaller company, many agents will simply search online to find the best fit for their referral regardless of brand.
If I don’t already know an agent in a particular market that I have a referral for, I tend to look at reviews on Zillow, and productivity and average price point on Homesnap to determine if it’s a good fit.
Agents search for potential referral candidates the same way consumers do. The agent with the best online presence will typically get more opportunities. This past year we’ve had three agents refer us business that simply found us online.
4. Other agents
Referrals aren’t necessarily always out of market either. Sometimes, if agents are too busy or have chosen to specialize in a certain niche, they may share opportunities with other agents they trust. For example, an agent may have a lot of listings that generate buyer leads but doesn’t have time to work with them. They can send these out to hungry agents in exchange for a referral fee upon closing.
Look for agents in your company who handle REO properties or work exclusively with a builder. Start by offering to host open houses for them. Once you’ve built rapport, ask if they have any sign calls or leads that need to be followed up with.
5. Referral network companies
There are also companies that specialize in facilitating agent-to-agent referrals. They typically collect an additional referral fee on each transaction, and there may be an up-front cost to join.
Referral Exchange, for example, promises to match your outgoing referral with three great agents and will pay up to a 25 percent referral fee. Paid members have the opportunity to receive referrals from other agents who have been qualified, as well as leads from their site.
HomeLight has gained a lot of traction recently since launching a consumer-focused advertising campaign. The premise is that consumers are matched with agents who specialize in their area and price point. The recommendations are based on the agent’s previous transaction history.
The company essentially charges 25 percent to act as a middleman for the agents who are willing to pay it. I was very disappointed when I followed up with a seller lead only to find out she had decided to go with the agent that HomeLight recommended. I guess that just proves that it does work.
Agent Pronto is a hybrid between the two. It matches consumers with an agent in their area based on experience, but also allows agents to input outgoing referrals.
When working with any of these sites, make sure to fill out your profile completely and respond promptly to any inquiries as you’ll be competing against two other agents every time.
Any outgoing referrals you submit should have given you permission to do so. Otherwise, it may be an invasion of their privacy. Remember that when they signed up on your website, they did not give you permission to resell or share their contact information.
Real Estate Marketing Playbook was inspired by observations and experiences over many years in the real estate business. This series includes example strategies from the playbook, and the full text is available on Amazon, Kindle and Audible.
Brandon Doyle is a Realtor at Doyle Real Estate Team — Re/Max Results in Minneapolis and co-author of Mindset, Methods & Metrics – Winning as a Modern Real Estate Agent. You can follow him on Twitter.