How to Do Agent-to-Agent Referrals the Right Way
Agent-to-agent referrals can be a valuable income stream for real estate professionals. However, they require a structured approach to ensure a smooth transaction for both agents and clients. In this episode, we discuss how to do agent-to-agent referrals effectively, covering everything from finding the right agent to ensuring you get paid.
What Is an Agent-to-Agent Referral?
An agent-to-agent referral occurs when you connect a client with an agent in another market where you are not licensed or do not feel comfortable working. The referring agent and the receiving agent agree on a referral fee—typically a percentage of the commission earned on the transaction.
Steps to Successfully Handle Agent-to-Agent Referrals
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Identify the Need for a Referral
If a client needs to buy or sell a home in a market you don’t serve, it’s time to refer them to a local expert. -
Find and Vet the Right Agent
Research potential agents through brokerage networks, social media, referral groups, or professional organizations. Look at their online presence, reviews, and response time to ensure they align with your client’s needs. -
Negotiate and Send a Referral Agreement
Agree on a referral fee, typically 20-25% of the commission, and complete a referral form before introducing the agent to your client. -
Stay Updated on the Transaction
Periodically check in to confirm the agent is handling the transaction properly. This ensures the client receives excellent service and helps you stay informed about your referral fee. -
Ensure You Get Paid
Provide your W-9 and office details upfront to avoid delays in receiving payment. If needed, follow up after closing to confirm your referral fee has been processed.
How to Get More Agent-to-Agent Referrals
- Build Relationships in the Industry: Attend conferences, join professional organizations, and participate in networking groups.
- Be Active in Online Communities: Engage in real estate Facebook groups, Substack communities, or podcast groups where agents exchange referrals.
- Offer Value on Social Media: Creating informative content can attract agents looking for trusted referral partners.
- Leverage Your Brokerage’s Network: Many brokerages have built-in referral systems where agents can connect across markets.
- Educate Your Sphere: Let clients and agents know you can help them find a trusted agent in any market.
Referral Etiquette: Avoid These Mistakes
- Never claim a referral after the transaction has started. The referral agreement must be in place before the agent begins working with the client.
- Don’t micromanage the agent. Trust your vetting process and only check in as needed.
- Understand the value of referrals. While referral fees are standard, ensure you are providing real value before expecting compensation.
Agent-to-agent referrals can provide consistent business if done correctly. By following a structured approach and building strong relationships, you can create a reliable referral network that benefits both you and your clients.
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