Agent-to-Agent Referrals – I'll Be Your Huckleberry

Agent-to-Agent Referrals – I Won’t Be Your Huckleberry

For the past year I’ve spent much time thinking about agent referrals. Actually, I have come to detest agent referrals, and not for the obvious reason you may think.

It’s Always About the Money, Right? Or Is It?

I’ve found the relationship I have with my clients is vastly different from the relationship I have with customers from agent referrals.

Perhaps it’s because my clients are mine exclusively. I’ve invested time, energy and money in prospecting for customers who I can turn to clients. Because of this high investment, customers are like gold to me, and I work diligently to earn their trust.

“You’re Not Special” Just Because I Gave YOU a Referral, Says the Referring Agent

• Agent referrals are batched out. It appears agents will give their clients more than one agent name. Here is where it appears the referring agent is out for the referral fee and not necessarily interested in finding a competent agent to refer their clients.

In one of my former offices, the managing broker gave the same leads to different agents in the office. I guess it’s whoever makes the killing sale first, wins.

• Agents in an agent referral agreement may not even know the other; much less have any kind of professional relationship. Some agent referrals may come from adjunct offices in other cities, or states. Because two agents work for the same “brand” doesn’t mean they know each other, or the other’s competency level.

 

• The customer may have gotten the agent’s name from an agent who is their cousin, or from a former agent in another state where they used to live.

 

• Agent referrals may come from a simple source, such as “google.”

The truth is agent referrals are handed on a silver platter. There hasn’t been the same investment in time, energy and money. Likewise, it’s more difficult to earn the referral customer’s trust.

A Sense of Entitlement, Agent’s Are Dispensable and Dis-respected

From agent referrals I’ve observed some interesting  behaviors on the part of the customers.

1. Sense of entitlement. Maybe it’s because the client-agent relationship is too familiar from the start. After all so and so (agent) gave me your name.  
2. The agent is dispensable. The game plan on the part of the customer is if you don’t do what I want, the way I want, when I want it, then I’ll tell the referring agent, who can refer me to someone else. The customer doesn’t have to say a word to convey this message. Their actions speak loud and clear: I don’t need you.
3. The agent is not respected. For some, depending on their personality, and if they really dislike real estate agents, it’s an opportunity to bully and abuse agents. The sentiment is agents will do anything for a buck and should be treated as such. This leads to resentment on the part of the referred agent. At this stage there can never be a healthy client-agent relationship built on mutual trust and respect.

Agent Referrals are Legally Problematic

As explained to me, once the referred agent agrees to accept a referral agreement, they must follow through to the end. There’s no changing later, or mid-stream while in escrow. The referring agent broker is entitled to the referral fee after close of escrow that was agreed upon between the referred and referring agents. If the referred agent does not comply with the initial agreement, they could risk losing their real estate license.

The other point that is not discussed much is if there is a dispute later between the client and the referred agent. The referring agent could be held as responsible and accountable since they were the ones who “referred” the bad agent. I guess it may be wise before referring an agent to know them well.

The other point that has been made is other professionals, such as doctors and lawyers, do not take a “referral fee” for referring patients or clients. Why then do agents take “referral fees”?

Did I Hear You Say RESPA Violation?

I’ve often wondered if agent referrals could be a RESPA violation. Paying a referral fee to a non-licensed person outside of escrow definitely is. What is bothersome to me is referral fees are not disclosed on the HUD statement, nor are they usually discussed with the client, or the other brokering agent of the real estate transaction.

In California, commissions between the selling agent and listing agent are disclosed on the escrow instructions for all to read. Both buyer and seller sign these escrow instructions. However, neither buyer nor seller would be aware if there were a referral fee involved after close of escrow. Hmmm, sounds a little shady to me.

Raising the Bar - Opting Out of Agent Referrals, Just Say No

There’s been much discussion over raising the bar for real estate agents. Instead of focusing on making it harder for those to enter our profession, why not consider treating our profession as it deserves to be. If agents refused agent referrals that would raise the bar and begin to change the low opinion many consumers have of real estate agents, which is pretty much we will do anything for a buck.

Well, not this agent. I won’t be your huckleberry.

Pamela Seley, REALTOR®
Short Sale Resource | CA DRE lic # 01824145
www.temeculavalleyhome.com | Dir 951.491.4063 | Email pamelaseley@gmail.com

Serving Southwest Riverside County California| Temecula, Murrieta, Menifee, Winchester, Lake Elsinore, Canyon Lake, Corona, Wildomar

Sign up for FREE REAL ESTATE SEARCH

Agent-to-Agent Referrals – I Won’t Be Your Huckleberry

All information deemed reliable, but not guaranteed. Copyright © 2009-2011 by Pamela Seley, REALTOR®