I've always been a little skeptical of referrals that I receive from others because more often than not I've been terribly disappointed in the services I receive. Bad haircuts, bad financial advice, bad doctors. You name it, I've had them. But what strikes me most is how much we value referrals in the real estate industry. A referral from one agent to another can be worth thousands to both if the buyer or seller successfully completes their end of the transaction and the agent didn't have to go out prospecting for the business so everyone wins. Maybe.
Yesterday I received a call from buyers interested in The Grove at New Windsor who are selling their home locally and looking to move into a two story townhouse. In fact, the buyers were most interested in a Belmont model which is available at both The Grove at New Windsor and a previous K. Hovnanian community in Monroe, NY called Meadow Glen at Monroe. I was thrilled to speak about the Belmont model because I have one listed for sale in Meadow Glen at Monroe and I know K. Hovnanian homes and communities from top to bottom. I know the ins and outs of dealing with management, what's happening in and around the communities, each model layout (I could walk through any K. Hovnanian home in Orange County, NY blindfolded and I'd know what model I was in and even point out the rooms), amenities and what price you should pay for the home because I've had a hand in selling or renting a number of these homes.
We scheduled an appointment for this afternoon to view both The Grove and Meadow Glen but a few hours before our appointment, I received a call from one of the buyers who mentioned that she would like to cancel her appointment because her listing agent referred her to one of her friends in the Orange County area and she is going to meet with that agent today instead.
At first I was surprised because I thought we had built a great relationship leading into our appointment today but then it had occurred to me that the buyer was going with this agent purely because her listing agent and friend of many years had referred the agent because she was a good friend of the listing agent.
I didn't fight the referral or blame the referred agent for being referred but I do question whether the listing agent acted in the best interest of their seller client by referring them to a friend that doesn't appear to specialize in townhouses or these communities. I asked the buyer if there was a referral fee involved in the referral -- She doesn't know. If I were the buyer I'd want to know if there was a financial incentive for the listing agent's recommendation of a particular agent.
Further, even when I do recommend agents I encourage my buyer or seller client that is being referred to interview about three agents, including my referral, to see who would be the best fit for their needs. My most recent client did this and negotiated a fair commission and still used the agent I had referred because they felt she was the best fit.
The end result of today was that I instead spent my morning trying to track down the referred agent to give her the listing information on my Belmont in Meadow Glen so the buyers would still benefit from seeing the home model they are most interested in today. My Belmont is the only Belmont with the most upgrades at the lowest price in the community so I look forward to seeing what they think about the home. For the record, had the buyers been interested in purchasing the Belmont I have listed I would have referred them to a buyer agent in my office because, as a rule of thumb, I don't represent both sides of a home purchase.
So now I'm left wondering -- Did the listing agent really do the buyers a favor by referring them to a catch-all REALTOR friend in their quest to find a two story townhouse?
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