Referrals are a two way street.
Real estate agents benefit from both inbound and outbound referrals. With inbound referrals, agents get to help a client buy or sell a house and usually shares some of that commission with the referral agent. The outbound referring agent usually gets a 25% referral fee as a reward for passing the client on to the other agent.
But is it worth actually prospecting for outbound referrals?
Prospecting Outbound Referrals
Something real estate agents have started doing is spending more time prospecting outbound referrals. Outbound referrals are a great source of revenue, and coupled with the power of ReferralCloud is a great way to lock-in future incoming business. The great thing about outbound referrals is that the referral client doesn’t have to be in the same market as the referring agent to be able to make a referral.
While traditionally the referral is a client of the referring agent, there are also times the referral is a friend of the agent who lives in another market, or someone the agent just met.
Are Referrals the Future of Real Estate?
Previously agents were not extremely motivated to deal with referrals. Many times the client being referred would simply find another agent, or the agent taking the referral would not send a referral check to the originating referral agent and there was no way to track the client or what was going on.
Companies like ReferralCloud are providing real estate agents a powerful took in tracking your referrals so that you have a higher chance of being paid. We are the one of the largest referral marketplaces for agents. It used to be said that you “list to last” but the agents of the future will be the ones with the most access to future clients. It is highly likely that if an agent does not have a strong network of other agents to refer clients to them, they are going to be left behind.
Aren’t referrals a zero-sum game?
Consider this scenario. Joe is a real estate agent in San Diego. He has a client who is moving to Las Vegas and Joe is going to list their home in San Diego. Joe sells the house and doesn’t refer them to another agent. The clients find an agent off Facebook or Google and use them to buy a house. Joe missed out on not only an opportunity to get a referral fee, but missed out on the opportunity to have the ReferralCloud engine send him another client in San Diego. He missed out on not only the 25% referral fee, but the opportunity for more business. While the agent in Las Vegas didn’t have to pay a referral fee for the client, the agent also missed out on the opportunity to get more clients from ReferralCloud.
Yes even just being the recipient agent and successfully closing a deal in the portal puts that agent at a higher priority for more inbound real estate referrals.
Are these free leads for real estate agents?
If by “free leads for real estate agents” you mean they don’t pay up-front then yes. Referrals are generally paid at closing, which means there is nothing paid until the transaction closes. At that point the ReferralCloud so it can be processed and the referral payment sent to the referring agent.
Many other “referral companies” aren’t actually referrals, they are a pay for leads scheme, and the idea of a referral is that there is another agent helping make sure the client actually uses the referred agent. Also its not really a referral if the agent is paying up front. ReferralCloud doesn’t ever charge up front, and just the real estate leads paid at closing. Any time a company charges for leads there in a financial incentive for them to give those same leads to multiple agents, which makes it not only difficult for the consumer, because of numerous agents constantly contacting them, but makes it difficult for the agents because they feel like they have to make numerous contact attempts just to get someone to talk to them.
Get More Referrals!
Referrals are one of the best sources of business for real estate agents. Many experienced agents will tell people they “only work on referral” which means they aren’t paying for advertising. Most of those agents have friends, family, past clients etc referring them business. What’s more important is that this is a powerful signal to the potential client because the weight of another person they know. It makes it easier for them to trust the agent and more likely that the client will keep using the agent.
If you want a strong and lasting real estate business, make sure referrals are part of it. Stop paying for “leads” and start using ReferralCloud to place your outbound referrals and get more inbound referrals.