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What's Up with Referrals????

By
Real Estate Broker/Owner

Giving and getting agent to agent referrals has changed over the years.  The number of agents in the business and the internet has put a new spin on this process.  Referrals are a business deal.  One agent agrees to pay another agent for a "lead" to work.  Now with the internet however I am finding:

1.  When I call to give a referral I am quizzed.  How do I know the person I am referring, how long do I know them, are they a friend, did they just find you on the internet, have you worked with them for a long time,  and more such questions.  For a while I thought that these questions were just talk and the agent trying to obtain some background information.  Now I know that a lot of agents are tryng to find out the likelihood of the referring agent finding out that they sold the client/customer.

2.  Make sure that the client/customer is contacted, and contacted within 24 hours not two weeks from now.  A referring agent wants to know that there was follow up, we have put ourselves out on a limb and don't want the ball dropped.  Make contact and let the referror know either by email or a call that you spoke to the individual and that you feel you can help them or can't help them.  If you feel that you can't work with the individual please don't just not follow up, let the referror try another agent that's only fair.  I call and follow up.  I touch base every couple of weeks to see how it is going. 

2.  If you are giving a referral it is up to you to discuss how much you expect to be paid if the broker sells the individual.  I have gotten 15%, 20%, 25%, 30% referrals.  I have one agent who will only take the referral if the payment is on a sliding scale.  He feels that if he ends up working with the individual for a very long time it will not be worth paying 25 or 30%.  This needs to be discussed, agreed to and put onto a referral form so that it is clear to all before you give the referralDO NOT ASSUME THAT AN AMOUNT IS AGREED TO WITHOUT A SIGNED REFERRAL FORM! 

3. If you change offices or let your license lapse or expire call the referring agent and explain to them what you would like done. If yoiu license is no longer active you are no longer affiliated with any office!  DO NOT EXPECT THEM TO KNOW WHAT YOU WANT.  A referring agent does not know the circumstances of your status change, does not know which office you were with when you gave the referral, does not know who your office/broker is or should be.   A referral you might be entitled to may go to the wrong office without your knowing it.  I just sold a young couple who was referred to me by their relative out west.  That agent kept in touch with me, sent me her license and explained to me what she wanted done with the referral check, she did the right thing, kept on top of the referral and I knew exactly who to make the check out to and where to send it. 

4.  If you have a friend search out an agent for you to refer to for whatever reason and the referral is given by the friend as "THE REFERRING AGENT IS >>>>>>>>>>>, THIS REFERRAL IS FROM>>>>> I AM NOT THE REFERRING AGENT" please don't change the referral terms to suit you.  You can't become the referring agent because circumstances have changed and it suits you better. Live by your word.  Your word is golden.

5. Agents who work hard to sell and work with the client you have sent want to be respected and thanked for their hard work and it is very hard work in this environment.  Call and say thank you I appreciate your efforts and am glad it turned out well.

Last week I sent a referral to an agent in another state.  I have not heard a peep from her.  She has not signed the referral form I sent, does not respond to emails. It is amazing but that is what is going on.  It is incumbent on me to make sure my referral is placed properly.  I called the client who has not heard from this agent and I will refer to another agent.  If I am to be paid the ball is in my court to follow up, discuss the amount, get it in writting and communicate with both the agent and the client. 

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New Orleans Property Lady, LLC

Broker/Owner and REALTOR (r) 

New Orleans, LA 70125

504-908-2268 (C)            

 Licensed in the State of Louisiana, USA

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Copyright 2012, Miriam Bernstein, All Rights Reserved

Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Miriam...We should treat these referrals with the same deligence we would expect to receive from the.  Simple enough.  If we are not prepared to work the referral properly and to respect the agreed upon conditions we should not take the referral.

I am sure you will never refer another client to that agent that did not respond.

Kate

Dec 20, 2008 02:13 PM
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

Anything and everything needs to be in writing -- always does. Happy holidays.

Dec 20, 2008 02:13 PM
Barbara Delaney
Park Place REALTORS, Inc. - Roanoke, VA

Dear Miriam,

I am basically with you, but I received a referral recently. I spoke with the seller once and still haven't been able to re-connect, about 3 weeks! Both the referring agent and I are working on it and communicating--that is good! This is difficult. the seller won't communicate, but we are.

Now here is a situation that really chaps me! I buyer calls me to see my listing. I show it and either at that time, or later, find out that they are working with an agent outside our MLS and a long way from us. That agent want full compensation as a buyer agent.

What do you think?

Barbara

Dec 20, 2008 02:23 PM
Barbara Delaney
Park Place REALTORS, Inc. - Roanoke, VA

Dear Miriam,

I am basically with you, but I received a referral recently. I spoke with the seller once and still haven't been able to re-connect, about 3 weeks! Both the referring agent and I are working on it and communicating--that is good! This is difficult. the seller won't communicate, but we are.

Now here is a situation that really chaps me! I buyer calls me to see my listing. I show it and either at that time, or later, find out that they are working with an agent outside our MLS and a long way from us. That agent want full compensation as a buyer agent.

What do you think?

Barbara

Dec 20, 2008 02:23 PM
Craig & Sue Guffin
Coldwell Banker Monsees Realty - Sedalia, MO
Sedalia Mo Real Estate

Good information. I do agree with the sliding scale on the bases of how good (ready to buy) is the referral? Qualified, Loan approval, do they know what they want etc. 

I do believe that one should keep a referral source as informed and happy as is realistic. With the ease of communication these days there is no reason not to. Thanks.

Dec 20, 2008 02:33 PM
Bill Kennedy
Keller Williams Greenville Upstate - Greenville, SC
Homes For Sale Greenville SC

These are some great thoughts on referrals.  It irks me that there are SO many people moving to different areas of the country, and yet the percentage that are actually referred to an agent is miniscule!  Agents aren't taking advantage of an awesome income opportunity

Dec 20, 2008 03:14 PM
Roland Woodworth
Blue Cord Realty - Clarksville, TN
Blue Cord Realty

Referrals are great.. I love to send and recieve them. I actually just placed a referral with another AR member this week.

Dec 20, 2008 03:16 PM
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
850-476-4494 - Pensacola, Pace or Gulf Breeze, Fl.

Wow, what a great post, I am bookmarking this one and will look back over it a second time. I like the details and the do's and don'ts.

Dec 20, 2008 03:53 PM
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker

Hi Miriam, This is a great outline for how referrals should be handled.  I have been frustrated on both sides of this issue.  I addition to making a referral and never hearing from that agent, I have also been offered a referral, agreed to take it and told I had it, but never again could I get the referring agent to return my calls to give me the client's contact info.  I still don't know if the client ever got help.  And I hope that wherever the client is, he doesn't think it was I who dropped the ball!

Dec 20, 2008 04:11 PM
Miriam Bernstei
Rochester, NY

Barbara, I just did a post and answered your question.

Dec 20, 2008 10:22 PM
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

I love referrals and gladly pay the agreed percentage.  They are a large percentage of my business.  The client is usually a better buyer.

Dec 20, 2008 11:54 PM
Malisia Wilkins Upstate SC
Williamston, SC

I would be more than happy to accept any referrals. I can assure you that I will be on the phone with your customer the moment I recieve the referral. I can assure you that my broker will pay you 2% commission on full sales price for bringing a referral. I work for a builder and I greatly appreciate referrals from other agents. As far as I am concerned the agent sending the referral is just as valubale as the customer being referred. Happy Holidays!

Dec 20, 2008 11:56 PM
Yvette Gardner
Keller Williams Realty, Spartanburg, SC - Spartanburg, SC

Great information.  We love referrals and a good part of our business is based on referrals.  You are absolutely correct.

Dec 20, 2008 11:59 PM
Kris Kombrink ~ The Kombrink Team
RE/MAX Excels - Chicago's Western Suburbs - Geneva, IL

Miriam, I honestly wish I had your problems.  Referrals in our area have gone down tremendously in the 13 years I have been in the business.  I think this year we only had about 5 either incoming or outgoing...

Twitter

Dec 21, 2008 01:23 AM
Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Good advice on referrals. I had my share of non-responding referral agents of late BUT finally found the perfect person in Puerto Vallarta for my client. Took a lot of work and interviews with agents but I've got a real winner now.

Dec 21, 2008 01:48 AM
The Somers Team
The Somers Team at KW Philadelphia - Philadelphia, PA
Delivering Real Estate Happiness

Miriam, these are some great tips and advice for the referral process.  It is amazing the lack of follow-up of some agents when we send a referral.  That just happened to us last week as well... is frustrating.  When it all comes together though, it is a great feeling and a great process !

Dec 21, 2008 02:14 AM
Bill Laraway
Century 21 Lynn M Strunk Realty - Kinderhook, NY

MIRIAM, SEND ME A REFERRAL AND i'LL SHOW YOU HOW FAST YOU'LL HAVE THE REFERRAL PAPER BACK AND HOW QUICKLY I CALL THAT POTENTIAL CUSTOMER. CALL ME LIGHTENING, BILL

Dec 21, 2008 04:18 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

You are absolutely right that referrals have changed.  I recall a time when a referral was treated like gold.  The receiving agent would keep me informed, pay right away and genuinely appreciate a good referral.

These days, too many receiving agents take the referral and then ignore the sending agent.  Collecting the referral fee becomes a matter of good dectective work.

I have a network of wonderful referral agents.  I treasure them and charge a low referral fee to encourage them to help my referrals and pay the agreed upon fee.

Good post.  It's so discouraging when you find agents who have no ethics. 

Dec 21, 2008 06:26 AM
Steven Beam
RE/MAX Alliance - Parker Colorado Real Estate. - Parker, CO
Parker Colorado Real Estate

This really gets me going. If I get even so much as a hint of a bad feeling from the person/agent I just contacted (to basically hand them a deal) I will tell them thank you but I believe they are not a good match. It amazes me how picky Realtors become on the phone calls. I'm calling them to hand them a deal and they start quizzing me about my business and the client. Sorry no deal for you.

Be happy and thankful and work hard to make US BOTH look good. I give and EXPECT to receive a minimum of 25% for any referral.

I recently sent a deal to a southwestern state that was a seller of a $500,000 house. The broker I referred it to called me when the deal closed and said she had to chip in $1,200 to get the deal closed so she wanted me to take the hit. I said sorry send me the 25%. Not my problem you agreed to take a hit.

Oh and I've been on the other side and had to chip in to get it done. I've always paid and I actually pay with a smile. I'm happy to send you your referral check and TELL YOU how grateful I am that you choose me to help with YOUR client!

Dec 21, 2008 07:30 AM
Miriam Bernstei
Rochester, NY

Steven, if the agent took a hit didn't that reduce the sale price and therefor the commission?

Lenn,  times are tough right now and everyone is working so hard.  It's hard for a lot of people.

Yes, all of you who commented that you would treat any referall with immediate response, pay right away, etc. would prefer comments about recent experiences you have had with referrals instead since I am not sending anyone a referral.

Dec 21, 2008 10:07 AM