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REALTORS® Giving Vender Referrals

By Randy L. Prothero

Real Estate Agent with eXp Realty 2021016812

October 24, 2007 09:43 AM

Referral Agent This topic comes up regularly. How do you decide on venders like home inspectors or loan officers to give your clients?

The most common school of thought among agents I have spoken to over the last few years is to give a list to your clients. I have such a list and freely share it with clients. In a recent regional meeting of the Honolulu Board of REALTORS®, the attorney for our Board said that giving a list may not minimize your exposure to potential future law suits. He said that whether you refer one or ten names to your client, if something goes bad you may be on the hook. By giving more names you may actually be increasing your odds of trouble. I may be better to give a referral with just one name you trust completely than a few names of people you are not as sure of.

You better trust and have faith in the person or people you refer them to. As a business decision I try to work with a least three different venders in each category id possible. That gives me the ability to have someone who we can trust if the other one is not available or if they and the client do not hit it off.

In the case of loan officers, some loan officers are great for certain types of loans and some are better at others. For example I do a lot of transactions with VA financing and gravitate towards those who also specialize in that direction. My favorite home inspector gives a military discount and is one of the best I have met.

I have read a few posts and sat in with agents who say they do not give vender referrals because of the liability. There is something to be said for that. I on the other hand have made a business decision that in order to properly service my clients I have to take on some liability. Hopefully by performing in a professional manner and on giving referrals to top professionals I can minimize that exposure. After all we want all of our clients to love us.

Mike Janquish wrote a good blog post as a follow-up to this topic: Cary and Raleigh, NC, Real Estate: Vender Referrals. Don't we owe it to our clients to take on some Liability?

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Joshua Talayka

Chase Internatinonal - Reno, NV

Generaly when it comes to refering vendors, i disclose to my clients that they have a right to choose who ever they want. However, i tell them that over the years, i have worked with many people and have narrowed down the list to a couple that i have consistently received terrific service with.

Oct 25, 2007 08:52 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Sally - Don't let my wife read this, I am sure she will have something to say about my dancing. LOL

Joshua - That seems sensible.

Oct 25, 2007 10:29 AM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

Randy I agree with giving the list of referrals. You might have a stronger opinion in some areas like a lender but ultimately it is their choice not yours. You can say you recommend but that they don't have to agree with your recomendation. Maybe that's your out.

Oct 25, 2007 10:41 AM

Georgie Hunter R(S) 58089

Hawai'i Life Real Estate Brokers - Haiku, HI

Maui Real Estate sales and lifestyle info

Wow, good post and comments. I usually do give 3 names when asked for referrals. Our office DOES NOT promote any person or business over another. Their performance is what brings them to the top of the list, or off the list if that is the case.

Oct 25, 2007 11:02 AM

Kim Carpenter

Coldwell Banker - Alton, NH

Lake Winnipesaukee REALTOR -Lake Winnipesaukee Real Estate, NH

I was taught this year in a GRI class (I believe thats where I heard it) to give the names of three venders..I am going to stick with that.

Oct 25, 2007 11:15 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Gary - It is always their choice, but many/ most times they look to us because they do not have a good vendor.

Georgina - It is easy to fall off my list than to get on it. If I send a referral, I want to know they will take care of my client and make me look good.

Kim - The attorney who spoke at our Association meeting is the same guy who teaches our GRI class. He did not have a problem with the list of three names. His point is that it does not necessarily remove liability by giving three names instead of one good one. In some cases it may increase liability.

Oct 25, 2007 12:58 PM

Ann Cummings

RE/MAX Shoreline - NH and Maine - Portsmouth, NH

Portsmouth NH Real Estate Preferrable Agent

Hi Randy - I know the school of thought from most companies is to give 3 names. I disagree with that, and have for a long time.

If I have first-hand experience with a certain vendor, that's the name I'm giving. If I trust a certain vendor or vendors, those names I'm glad and happy to recommend. But if I don't have 3 to give, I will not give 3, especially if I don't have first-hand experience with them.

If I use them, or would use them, on my own properties, then they would be on my list - plain and simple.

Ann

Oct 25, 2007 01:00 PM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Ann - I have tried out vendors on my own before I give them to a client also. I feel safer that way.

Oct 25, 2007 01:41 PM

Robin Rogers

Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX

CRS, TRC, MRP - Real Estate Investment Adviser

Hi, Randy:

As far as great loan officers being worth their weight in gold (or caviar): I don't know if other agents do this, but on my listings, even if the buyer's financing seems solid, I suggest they contact my favorite loan officer to see if they can get a better program or close sooner.

Always worth a shot!

Cheers,

Robin

Oct 26, 2007 11:47 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Robin - I haven't done that. I have only sugeested that to a buyer's agent when they came in with a questionable loan letter.

Oct 26, 2007 04:27 PM

Joyce Heffner-Williams

Keller Williams Clients' Choice Realty - Monument, CO

Owner/Broker/EcoBroker - Monument Real Estate

There is risk in everything! I usually just give a few names and let them choose...

Oct 27, 2007 03:39 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Troy - There is always risk.

Oct 27, 2007 06:56 AM

Dena Stevens

Rocky Mountain Realty - Canon City, CO

Putting The Real Into Realtor Since 2004

Great post Randy. I've been struggling with this a lot lately. I haven't had issues but I'm concerned none the less. I have an inspector who does a great job but he belongs to a BNI group. Does that mean I have to worry about who he gives referrals to?

Oct 29, 2007 10:05 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Dena - I would ask him.

Oct 29, 2007 11:07 AM

Kenneth Miller

Jordan Hill Home Services, LLC - Berkley, MI

Dena,

I can't say about BNI, but I belong to a group. We are encouraged to refer people in our chapter, but we are also encouraged to sit down with that person to meet with them to get a handle on the business, who they are looking for leads, etc. I know I won't refer anyone from my chapter or group that I wouldn't use myself. I may not be typical, but that seems to be the consensus in my chapter about reffering work to other members. But, as Randy said, talk to him about it. If he is straight up, he should have no problem sitting down with you to discuss it.

Oct 30, 2007 01:27 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Kenneth - I think that is so important. If you wouldn't use them yourself, you should never, ever refer someone else to them. Good litmus test.

Oct 30, 2007 04:22 AM

Robin Rogers

Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX

CRS, TRC, MRP - Real Estate Investment Adviser

The comments about BNI groups caught my attention. My very good friend, a construction/remodeling contractor, belongs to one. He refers his business to the Realtor in the group, even though I refer prospects to him and recommend him. The inspector I work with most of the time belongs to a different BNI group. He refers prospective clients to me, although not many. He depends on my business more than the remodeling contractor does, so it's a different relationship.

If you're referring business to someone and not getting much back, it might be worth talking to them to see if you can work something out. On the one hand, they may not consider that you NEED any more business, and on the other, there is a lot of pressure in BNI groups to come up with referrals for other members at every meeting.

Too bad we can't just buy referrals. :) That's another blog topic.

Cheers,

Robin

Nov 03, 2007 06:59 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Robin - I don't think I would feel comfortable being part of on of those groups if I was expected to give referrals to someone I do have complete faith in or would use myself.

Nov 03, 2007 05:55 PM

Robin Rogers

Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX

CRS, TRC, MRP - Real Estate Investment Adviser

Hi, Randy:

I'm with you on the referral thing. I refer business to my colleagues in the industry only because I'm confident they will do a great job for my clients. I would feel uneasy otherwise. I didn't join my inspector's BNI group, although I was invited, for that reason (also because they have their breakfast meetings at 7:30--forget that!).

Cheers,

Robin

Nov 04, 2007 10:43 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

Robin - Thank you for sharing you insights.

Nov 04, 2007 10:48 AM

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