I receive a phone call from a past client. She informs me that she is looking to buy a property, and that she is very excited (as she should be). She goes on to declare that she wants to work with me and my team (GREAT!), and that she is looking in San Diego.(not my territory)
Because it is very important to work with a Buyers agent that is familiar with and knowledgeable with the local community I go into my referral scripts. After having this conversation with her, and going through the benefits of working through a referral it hit me. Referrals really are a win-win-win for all parties, and so much so in today's market that any hesitant buyer should hire their agent through a third party referral.
I know that I'm out on a limb when I say this, but you should not hire an agent unless you either 1. have a previous established successful relationship with that agent or 2. you are referred to that agent. Even if you've seen the agent working around your area and you think they're qualified; you are better off going to a professional third party (even if out of the area) and have them refer you to that agent. I know it may sound crazy, but I honestly believe that this becomes a win-win-win situation for all parties.
By allowing a third-party professional to recommend you to a professional who knows your area, that they trust, and are willing to put their reputation on the line for will benefit everyone involved in the transaction.
First, the sole benefit that the referring agent receives is a referral fee upon the close of the transaction. This seems to be an industry standard of 25-30% of the representing agents commission. Now you might be asking yourself, "that's great they make some money, but why would I want them involved in the transaction?".
You'll want the third party professional involved because it will give you increased accountability and security throughout the transaction. Because a referral is a business-to-business partnership, referrals from other professionals tend to get better treatment and attention than even their own clients. Why would they give you this increased attention, you might ask? Because they want to keep that business relationship alive and well. They know that a referral is the highest compliment that you can pay a professional. So they’ll want to be sure to live up to this high standard of peer-to-peer expectation.
Second, it benefits the client by allowing the third party professional access to get updates on your transaction's progress and partake in the problem solving process should a challenge arise. This is very important because if for some reason the client feels uncertain, or is not 100% sure that the advice they’re receiving is the absolute best possible they have a third party organization that they can call on. Because they referred you over and they not only have a financial interest vested in the successful close of your transaction which gives them the right to ask for an update. Their reputation is on the line because they referred you to this agent if the client is not getting the best service possible the referring agent takes it personally and will follow-up.
Since the representing agent will gladly give the up-dates and the planned next steps on what’s going on to keep the business relationship alive and well. The third party professional can evaluate the decision making process, and even partake in the brain-storming sessions to help overcome any challenges that may arise. This is absolutely great for the client because it means that at all times they have access to a professional third party to hold the representing agent accountable, honest and the client can take comfort that the best possible decisions are being made on their behalf.
So by going through a third party referral the client benefits by having accountability of their agent from a third party, increased quality service, and peace of mind that the decisions being made are sound and to their benefit. The referring agent gets money for holding them accountable, so now you're left thinking "what could possibly be the benefit to the representing agent that they could possibly want to give up 25-30% of their commission?" And I'm glad you asked... :)
The representing agent also wins in the referral situation. There is a ton of negative statements going around about the real estate industry, and we all know that clients are getting advice from a lot of people who are not in the industry, nor privy to reliable information other than the panic reported by the news media. This creates an environment of unease in a buyers minds. If an agent comes along and tells a client that they have found a great buy for them, but they'll have to move fast because it wont last. Well, that is contradictory to what the media is saying, and probably what their family is saying so it makes them uneasy. Never mind the fact that it may be true. (See it takes a loss to get them off the fence)
Now if that same client does what a majority of buyers are doing now days, they'll turn to the internet to get their answers. As many of us know there are some agents out there that will tell a client anything they want to hear to get the deal. Unfortunately that reputation tends to precedes even the best professional agents. With that said there is something to be desired about knowing that your clients have a professional to turn to and ask questions without loosing their client.
I've had many phone calls from people who found me through my Active Rain blog, who are uneasy with their current agents progress. Now I'm not one to second guess another professionals work (especially with the contract still signed), but I always ask "Have you spoken to your agent about this?"
A resounding majority of them say they have not even tried to talk to their agent about it before seeking outside help!
As a Psychology major it makes sense to me that people want to avoid confrontation, and if they've attributed a simple miss-communication as being miss-representation; it is no wonder they're not in a hurry to make contact with that agent. The benefit of having another professional resource that is not competing with you (after-all they already referred it to you) that your clients can turn to for advice, assurance, and accountability. Having this referral support system in place truly makes this a win-win-win deal.
If you're looking to buy, sell or relocate we have professionals with integrity nationwide that we would be happy to put our reputation on the line for; while holding them accountable to our high quality assurance standards.
Click Here If you are looking to purchase or sell your home, but you have been on the fence because of what you are hearing from the media or from your family, coworkers, or friends. We would be happy to be your accountability partner through this exciting time.
If you are an agent that is already working with a client and you believe you could benefit from having an outside professional that your client could confide in, we would be happy to assist you and your client. Click Here to Contact Us! *Referral fee is negotiable depending on how far along in the process you are.
If you know someone who is relocating to the East San Gabriel Valley or the Inland Empire, we would love to service your client and have you as our accountability partner for the transaction.
Seth Miller | West Covina Real Estate Consultant
Associate Brokers My West Covina Real Estate Pro
Don't hire anyone... Hire a Pro! of My Real Estate Pro. Licensed REALTORs® in California to list your property for sale or to purchase a property in Alhambra, Anaheim, Arcadia, Azusa, Baldwin Park, Brea, Chino, Chino Hills, Claremont, Covina, Diamond Bar, Duarte, El Monte, Fullerton, Glendora, Hacienda Heights, La Habra, La Puente, La Verne, Monrovia, Montclair, Monterey Park, Ontario, Pasadena, Placentia, Pomona, Rosemead, Rowland Heights, San Dimas, San Gabriel, San Marino, Santa Fe Springs, Sierra Madre, South El Monte, South Pasadena, Temple City, Upland, Walnut, West Covina, Whittier. We Are Always Accepting Referrals!
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