Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372


This post inspired by Justin Gramm describing how he feels about the referral fees.

Mr. Gramm doesn't accept referral fees because:  "I just don't feel right asking to be compensated simply for taking an hour to do some research and refer my friend/client to a competent agent in another state."

Unlike Mr. Graham, many agents DO accept referral fees because:

1.  Our experience through the day-to-day practice of real estate brokerage gives us the knowledge to identify agents qualified to serve the buyer's or seller's needs.

2.  We are often well connected to industry professionals through networks like ActiveRain to identify qualified practitioners that match the buyers specific needs.

3.  Agents are more responsive to another agent about their experience and specialties when seeking help for buyers with specialized needs.

4.  When requested by a buyer or seller for an agent referral, the consumer relies on our experience and knowledge to meet an agent that will help them with their specific needs.

5.  Experience and knowledge in real estate brokerage are acquired through practice, training and continuing education.  That knowledge and experience is cumulative and compounds over time to give us the insights to identify good referral agents. 

Even if it takes only an hour to identify a good referral agent, that hour reflects our training, practice and experience.  

Making a quality agent referral has value, surely value equal to or more than some of the other tasks we perform for buyers and sellers. 

Experienced agents and brokers understand that,


Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988. 


                                       Agent Referrals

"John.  Congratulations on finding your home in New York so quickly.  How did you find your agent?"

"Thanks Sue, the agent who sold our home in Virginia referred us to him.  Yes, he did a wonderful job."


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Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease


Referral is not a dirty word!  I love the way Loreena commented, so much of what we are being compensated for in a referral is our knowledge and experience.  That's priceless!

All the best, Michelle

Feb 03, 2010 11:56 PM #20
Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers Designated Broker Leolinda Realty
Leolinda Realty - Surprise, AZ
Sun City Grand in Surprise Arizona

I love referrals.  They normally result with ready and willing buyers and highly motivated sellers.

Feb 04, 2010 12:37 AM #21
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Lenn:  I have to say, I'm in your camp on this one.  I send out my fair share of referrals and do get compensated for them. 

Feb 04, 2010 12:46 AM #22
Allison Stewart
St.Cloud Homes - Saint Cloud, FL
St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

I can attest to that! 

Feb 04, 2010 01:35 AM #23
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Lenn.... I don't have a problem with referral fees, as long as it doesn't get added to the borrowers bottom numbers and makes it more pricey. You pointed out some excellent reasons to why someone should be compensated. My only concern is at whose expense and how much. I am just making a general statement in regards to all referrals and not directly tied into realtors.. just my opinion.  thanks

jeff belonger

Feb 04, 2010 01:55 AM #24
James Downing - Metro DC Houses Team REALTORS®, CRS, GRI, ABR,MRP, MilRes
Real Living | At Home - Washington, DC
When Looking to Buy or Sell - Make the Right Move

Lenn - I completely agree with you.  I also always expect to pay a referral fee.  It's just what we do.  Now how much can be another story...

Feb 04, 2010 02:04 AM #25
Tony Cordi
Tony Cordi, Broker (Beachtime Realty) - Hermosa Beach, CA

Well stated Lenn.  I read your post right after adding someone on AR as an associate.  I like his writing style and thinking.  I would definitely work with him if I knew of anyone buying in his area. 

Referral fees make perfect sense to me and I don't hesitate in paying them.

Feb 04, 2010 02:24 AM #26
Jim Crawford
RE/MAX Paramount Properties - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

Lenn, thanks for this post.  I read the post and could not disagree with a position more.  My business like your is Internet based.  I develop more leads than I can possibly handle, and so I refer out the leads.  Many persons are helped by this.  First of all buyers and sellers benefit when a good lead is handed out to a competentagent.  They either can finally sell their home or buy the home of their dreams. 

The next item is agents.  I have many agents that make a great living each year from leads I give them.  One cannot forget that real estate is a difficult business to survive in.  We have no benefits, hospitalization, retirement, unemployment benefits or disability entitlements.   20% to charity?  Why not 25%?  Why not 30%?  35%?  Why skim an extra 5-10% off the top for yourself?  How self serving.  Charity begins at home.  Referrals are as basic to real estate as ABC!  Most agents are more than happy to pay a referral fee for their hard work!  They appreciate the opportunity for a lead to be thrown in their laps that they did not have to generate by knocking doors, cold calling or by spending big money on a marketing campaign!   It puts food on the table, pays a doctor bill, pays for the car, puts gas in the tank, and lets us all live the Americandream!  Hope their business models survives.  I know mine will as long as there are referral fees!

Feb 04, 2010 03:12 AM #27
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Lenn, well put, I saw the post, my initial reaction was not to give it leggs, since you addressed it so eloquently we should ask Mr. Gramm to visit your post and have him read our comments.

Feb 04, 2010 07:16 AM #28
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Lenn, I pay out a lot in referral fees. Referrals probably make up 50% of my buisness. I gladly pay and I gladly receive.

Feb 04, 2010 10:00 AM #29
Betty Knowles
Coldwell Banker Vanguard - www.teamknowles.com - Springfield, MO
TeamKnowles REALTORS® - Springfield MO Real Estate

Lenn, When I give referrals I call it phone money.  When I receive them I call it a super hot lead.   We give and receive 25% for referrals. It balances out all the other hours we don't get paid.

Feb 04, 2010 10:33 AM #30
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX

I almost missed this post and I happily receive referral fees and I gladly pay them after I have done some thorough research on the agents. I expect them to do the same job I would and in just as meticulous a manner!

Feb 04, 2010 11:07 AM #31
Lisa Stafford
Broken Arrow, Tulsa, McGraw Realtors - Broken Arrow, OK
Broken Arrow OK Homes For Sale

Lenn, referrals are just another income stream from this business.  It's sad that some people don't take advantage of it.

Feb 04, 2010 11:27 AM #32
Elyse Berman, PA
Best Connections Realty, Inc. - Boca Raton, FL
Boca Raton FL - (561) 716-7824 - CRS, ABR, GRI

Lenn - I agree with you.  I refer out a lot and am always open to take referrals as well.  If I don't know the area, I'd rather refer it to someone who does.  

Feb 04, 2010 12:45 PM #33
Renée Donohue
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate - Las Vegas, NV
Las Vegas Real Estate Broker - www.urLVhome.com

My first referral I sent out took me more than an hour to find the perfect agent!  I do pay a referral fee and I would like referral fees in return.  I gladly paid a 40% referral for my first one I received on AR.  I received an ABUNDANCE of "back end" selling help from my referral partner.

I guess it just depends on how we look at a referral!

Feb 04, 2010 02:15 PM #34
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

Lenn - I do not see an issue with an agent collecting a referral fee, so I have to agree with you here.

Feb 04, 2010 02:24 PM #35
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY

A good referral creates commerce. If you help create commerce you are entitled to compensation. 

Feb 04, 2010 03:10 PM #36
Jen Olson
First Weber Group Realtors - Marshfield, WI

Lenn-  I definitely think that referrals are a good thing.  I always get as much information as I can to pass along to the agent that I am referring to.  I think that it is important that I give the agent I am referring to not just a name and contact number, but anything else that I may know that will best help that agent assist the client.  I have received referrals that the agent literally has nothing other than a name and number.  I sometimes get a bit annoyed that for that I need to pay out, but then I remind myself that I may never have gotten that lead if not for that referral.  So in the end, any referral is worth a huge thank you to the sender!

Feb 04, 2010 03:17 PM #37
Jen Olson
First Weber Group Realtors - Marshfield, WI

Lenn-  I just linked to Justin's post that you mentioned here.  I do accept and pay referrals fees, but I also wouldn't have a problem referring a client to him, if he were the best suited for the job.  I think that he makes some valid points about full disclosure- IMHO, anyway.

Feb 04, 2010 03:39 PM #38
Carol Culkin
Reece & Nichols - Leawood, KS
Overland Park

Lenn - I consider it a finders fee for matching a buyer to an agent.  In the case of a buyer I am usually bringing a qualified buyer to the agent and not just a looky-loo.  Seller referrals are those who I have determined are ready to list NOW.  I believe in sending quality referrals to other agents - I think anybody would find value in that.  I feel I am entitled to put a price on my time and efforts. 

Feb 05, 2010 01:35 AM #39
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