When In Doubt, Do You Refer Out?

Real Estate Agent with Howard Hanna Real Estate Services

When In Doubt, Do You Refer Out? - Originally posted at Cleveland Real Estate Blog


when in doubt do you refer out


Most business professionals, especially those of us in sales, are faced with this dilemma at some point. Do we take on a client that we may not be able to properly service, or refer it to another professional?

Sometimes it's very cut and dry, while other times it can be an agonizing decision. After all, business is tougher than ever, plus people in sales are competitive by nature and don't like to give things up. Given the state of today's economy it can be especially tough to pass up on a nice piece of business. So, what should you do?


The key thing here is to know what your strengths are, understand what you cannot do and be consistent. No one can be everything to everyone. A foot doctor won't do open heart surgery, a real estate attorney won't represent someone in a criminal case and a real estate agent shouldn't take on a client they can't properly service either.  While these examples are fairly simple, the scenarios do get tougher. 


Referring a $100,000 buyer is one thing, but would you be so quick to turn your back on a $1,000,0000 buyer that wants to buy in an area you don't service? Many people struggle with these types of decisions, especially when money becomes part of the equation. I do see a lot of agents take business that perhaps they shouldn't.

People will take any business, for a variety of reasons. Some are simply very competitive and want all the business they can get their hands on. Others really need the business, especially in today's tough economy, and then there are those that feel obligated and don't like to say "no".


A friend of ours referred someone to us who wanted to buy a home in an area that we didn't service. With the buyer's permission, we referred them to a great agent who knew that area like the back of her hand. They ended up finding a home in just a few weeks and are thrilled. The person who referred the buyer to us was happy too, because we took care of her friend. Although we didn't personally work with the buyers, we did put them in very good hands, and everyone ended up winning.


At the end of the day, every business professional has to make their own decisions and I'm certainly not here to tell you what to do. However, I will say this, if you ever come across someone who wants to buy in an area that you don't even know how to pronounce, or you can't locate on a map, do everyone a favor and refer it out. As for the more difficult choices, I'll leave that up to you to decide.


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About The Authors:

Dan and Amy Schuman live in Solon Ohio and specialize in Cleveland Luxury Homes, working with buyers relocating to Cleveland, and first-time buyers.

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When In Doubt, Do You Refer Out? is the property of The Schuman Team and may not be duplicated or used without their written consent. ©September 2011



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Brad Baylor
ERA Coup Agency - Milton, PA

Dan & Amy - Couldn't agree more.  I refer out commercial business because I'm not yet comfortable in that market.

Sep 09, 2011 04:36 AM #33
Jim McCormack
Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-784-EDGE (3343) - Murfreesboro, TN
Nashville Short Sale REALTOR - Stop Foreclosure

Good advice.

Sep 09, 2011 06:04 AM #34
Kelli Grant Group Berkshire Hathaway HomeServices Arizona
Kelli Grant Group | Berkshire Hathaway - Scottsdale, AZ
The heart and soul of real estate

Absolutely!   #1 You're not providing the best service or value to a client when you're unfamiliar with a product or neighborhood. There's more to our jobs than just looking up homes on an MLS and letting them in the door. We should get to know the client's style & personality beyond features they've requested in a property because we may be able to suggest something that they didn't even know to ask for!  #2 If it's far, it's probably not a good use of time (or gas!) either.

I have agents in my office who I have gotten to know and trust over the years that live in various areas of the "Valley of the Sun" who I know are experts and live in an area. I even refer family members to them if it's out of my area of expertise.  Realtors need to learn the word NO and realize there's enough business for everyone.  Realtors will respect you and know that you are professional and refer you business someday!

facebook.com/KelliGrantRealty       Twitter.com/KelliJGrant

Sep 09, 2011 06:12 AM #35
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

It's tough when you are not sure if they are going to be taken care of properly. There are a few agents I know and trust completely, but when I don't...it's tough

Sep 09, 2011 06:52 AM #36
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

I agree with Karen, #36, I'm reluctant to refer other professionals unless I have confidence in them. That's why I like AR, because you can observe and read about a person's character and capabilities over time to feel comfortable to refer a prospect or client.

Sep 09, 2011 08:13 AM #37
Ronald S. Accornero
OC Signature Properties - Villa Park, CA

Dan & Amy:

Good advice! I always refer out clients who want to buy in an area I am not familiar with.  I collect a referral and don't have to worry about selling them the wrong home and taking the extra time to research the area.



Sep 09, 2011 09:33 AM #38
Liz Benitez
DeHanad Real Estate Services - Waldorf, MD

Getting a referral fee is much better than paying a fine for misrepresentation. Or getting a bad reputation for not serving a client well.

Sep 09, 2011 09:49 AM #39
Steven Pahl
Keller Williams Tampa Properties - Tampa, FL
Real Estate Consultant Tampa, FL 813-319-6423

Refer it out, 20 - 30% of something is better than 100% of poor representation!

Sep 09, 2011 01:59 PM #40
Gerard Gilbers
Higher Authority Markeing - Asheboro, NC
Your Marketing Master

Great points. There are some people that make a good living by doing referrals! It is better to know are limitations and so what is best for the client.

Sep 09, 2011 03:51 PM #41
Linda Humphrey
Humphrey Home Connections Realty, Reno, Nevada - Reno, NV
CRS, Broker/Owner HHC Realty

Dan and Amy - I bet you sleep very well at night ;-). If one makes the slightest effort, it doesn't take much soul-searching to discover the correct path. I believe that what is "lost" on one deal referred out is more than made up in good will, respect, and future business. Then consider the downside of a potentially botched referral and it is a no-brainer.

Sep 09, 2011 04:18 PM #42
Dörte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Dan and Amy,

If you do not know the geography or subject matter, it is better to refer. In our area, some communities are too far to drive to with frequest heavy traffic or bridges, so I rather refer to those areas. You do not make money sitting in traffic and it is not fun being late. For anything other than office condos or other commercial closely related to residential, I refer. I have no clue about how to calculate the right numbers for a gas station or what details to keep in mind for a medical office. Besides, if you are busy already, it does not feel like a loss, just the right thing to do for the needs of that client.

Sep 09, 2011 05:14 PM #43
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

I refer out things that I don't know.  Properties like mountain property, horse property, and other hard areas like massive raw land commercial development deals.  Stuff that I don't know.  A million dollar buyer.  I think it's about talking and finding their area.  I think negotiation skills would be more important than neighborhood knowledge.

Sep 09, 2011 06:52 PM #44
Julie Babcock -Nook & Cranny Home Inspections
Nook & Cranny Home Inspections Tonawanda, NY - Tonawanda, NY

I certainly have referred commercial inspections in the past and don't regret doing so.  I wasn't trained on commercial buildings and, although I could probably do them, I'd rather always do my best, even if that means money lost.

Sep 10, 2011 04:04 AM #45
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

This is an area where too many agents are torn. Increasing the price seems to make it even harder! Personally I tell people straight out that I don't work the area & won't.  I just has a very persuasive person here on AR want me to work with someone that her son knows.  I don't work in the city of Chicago & that's that.  I have my limits & I'm very happy.  I've seen others trek all over northern IL to get a sale - you really can't do your client justice.

Sep 10, 2011 07:26 AM #46
Dan and Amy Schuman
Howard Hanna Real Estate Services - Solon, OH
Luxury Home Specialists

Ruthmarie - Nothing wrong with expanding your area but I suppose at some point you need to draw the line.

Erica - Certainly understandable to want a return on your investment of time.

Norma - Sounds like you took a lot into consideration to make a wise business decision. I suppose travel time would come into play in a big city.

Tammy - Didn't catch your post but it makes sense to think that way. Sometimes greed gets in the way of making smart decisions.

Rocky - I like your thought process here. There is something to be gained by partnering up with a fellow agent.  Some agents though don't partner well, so you have to find the right one.

Bill -  50 miles to show a home? My Prius would be come in handy there. 

Terry -  As long as the clients know up front, than nothing wrong with it and completely understandable.

Brad - Commercial is a totally different ballgame. However, I do see commercial agents take on residential listings quite a bit here in my market.

Jim - Thank you.

Kelli - Saying "no" is tough for a lot of agents. It's nice that you have a great network of agents throughout your market.

Karen - Good point. Finding someone that will be a good reflection of you is not always easy.

Kimo - AR is a great place to find first class agents to refer to.

Ronald - Referral fees are a great thing.

Liz - Agreed.

Steven - Makes a ton of sense to me.

Gerard - Sometimes it takes time for agents to understand this.

Linda - You seem to be on the same page as us. I know agents who I really like and respect and after 20+ years in the business, still don't understand the wisdom of referring out. Some agents aren't open to doing things differently.

Dorte - Thank you so much for your comments. I've been to Annapolis a few times and thought it was a beautiful town.

Mike - There are a lot of things to consider. I prefer to stick with what I know as it makes my life much easier.

Julie -  I imagine you could do them, but there may be a few nuances that are different so it's good that you refer them out.

Lyn - Sounds like you know your limitations, which is a good thing.


Sep 10, 2011 11:03 AM #47
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

The out of area thing is a tough issue.  Sometimes the relationship and the trust the client has with me is worth more to them than my knowledge of an area.  As long as they understand where I am coming from.

Sep 10, 2011 11:10 AM #48
Beverly Femia
BlueCoast Realty Corporation - Hampstead, NC
Broker Realtor Stager - Greater Wilmington, NC Are

You've said it very well.  I had just his situation this week.  Although I've worked in the area before and have a reciprocal agreement between my home MLS and this one, they have a different electronic key and most importantly, it would take too much of my time to do the only kind of job I wan to do for a Client - A Good Job!! I'm referring out! 

Sep 10, 2011 05:36 PM #49
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Good, good.  It does nobody good to work with people outside of our area of "expertise."  -Kasey

Sep 12, 2011 09:21 AM #50
Cheryl Ritchie
RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD
Southern Maryland 301-980-7566
I just noticed that sometimes you link at the bottom of your AR posts to an outside blog post article you all have written but sometimes it is to another AR internal post you have done. What is the rhyme or reason? I may start this as a good practice. Your links give me choices for which post of yours to reblog when I already like the Featured one today!
Sep 16, 2011 01:34 AM #51
Dale Taylor
Re/Max 10 New Lenox Illinois - Frankfort, IL
Realtor = Chicago Illinois Homes Townhomes Condos

...or if it is a niche I simply don't like to work in I refer to a Realtor who does!  Like your post!

Dec 23, 2011 08:09 PM #52
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