Real estate referrals are a great source of business for real estate agents. They provide a good source of business and also are a better source of business than leads, which usually require an up-front cost. The best way for agents to get more referrals is to join a number of real estate referral networks.
What is a Real Estate Referral Network?
A real estate referral network is a group of agents who only share their client referral with each other. The advantage of doing this is that the agents can ultimately get more referrals than using non-referral network means. These include google, Facebook referral groups, asking other agents and just asking random people.
One of the benefits of a real estate referral network is the idea of a “central coordinator”.
What is a Central Coordinator?
A Central Coordinator is either a person(s) or technology that tracks which agents have given referrals and then makes sure that those agents are the next in line for those referrals. This idea is that of a clearinghouse. A Clearinghouse is an organization that collects and distributes information as well as holds and distributes money. But where did this idea begin?
Back in the 1700s banks were just beginning. Not all banks gave loans to all types of businesses, so a group of bankers decided to get together to share their applications for a loan. The bankers would trade away their loans to other banks for loans that better suited themselves. This mechanism still exists, especially with large business like banks, airlines and insurance companies.
How to Join a Real Estate Referral Network
Many franchises already have built in real estate referral networks. These companies have a central coordinator, usually someone who tracks everything with a spreadsheet, and makes sure that the referrals from agents that belong to their network are the recipients of real estate referrals from other agents.
Part of the problem with these networks, is that they are ultimately very small. Keller Williams, the largest real estate franchise in the US only has a 10% market share. This means that 90% of the referrals are being missed by Keller Williams agents! This does not include the fact that most agents in these franchises don’t use their referral networks! Instead they use Facebook referral groups and similar resources.
The best way for real estate agents to share their referrals with other agents is to make sure that the real estate referral network does 3 things:
- Allow agents to place their outbound referrals through the network
- Only allow referrals to be given to agents in the network
- Keep track of the referrals to reward agents who use the network with more referrals.
We will start with companies that are actually run real estate referral networks.
List of Real Estate Referral Networks
ReferralCloud is a real estate referral network for real estate agents.
It allows agent to not only place referrals within the network, it only assigns referral to agents that are part of the network. Some of the factors that are included in which agent will receive an inbound referral are:
- Number of outbound referrals placed through the network
- Total number of closed referrals as part of the network
- Proximity of agent to client’s listing or purchasing area
- Length of time in the network
- Other factors
Within the ReferralCloud network are over 1,100 agents that are full-time professional Realtors and looking for more ways to grow their business.
How am I notified about a ReferralCloud Referral Client?
When a referral is placed in the system, an agent is almost immediately assigned the referral. Both and email as well as a phone call will be placed to the agent. When the agent logs back into their ReferralCloud portal they will see all the information about the client as well as any notes from the ReferralCloud administrator or the agent that submitted the referral into the system.
Another main benefit of ReferralCloud is that anybody can do a search for agents in the network and contact the agent directly with a referral. These referrals do not have to be processed within the referral network and they can be handled the traditional way.
Members of the public can also search the platform and find a real estate agent to work with and contact them directly as well.
2. NAR Referral Exchange
NAR (National Association of Realtors) offers a Referral Exchange Network. This is a pay to play network where you are handed off leads that come into NAR on a referral basis.
While not a traditional real estate referral network in the practical sense, this might be a good resource for real estate agents to get more clients.
Here is a link to the page that explains their real estate referral network.
3. Premier Agent Network
A company called Premier Agent Network is a brokerage that also has a referral program for real estate agents.
These agent are known as “referral agents” and can refer clients into the network and be paid a referral fee at closing. While this may not be a good option for agents that are already affiliated with a real estate company, this would be good for an agent who didn’t have their license hanging anywhere and just wanted to give referrals.
Benefits of Using a Real Estate Referral Network
One of the benefits of using a real estate referral network is tracking. A good network will track the referral so that the agent that placed the client in the system is more likely to get paid at closing. Many times agents give referrals, but then don’t follow up with the other agent to see how the transaction is progressing.
Rewarding with More Referrals
A good referral network rewards agents that use the system with more inbound referrals.
One of the advantages of the ReferralCloud referral network is that the agents who place referrals in the system are at a much higher priority for inbound referrals in their market.
Summary of Real Estate Referral Networks
In summary agents should try to pick one referral network and stick with it. Joining every network that they can find isn’t likely to lead to more referrals. Its more likely that if an agent tries to optimize their influence with one network that they will be more likely to get business from that company, and build a high degree of trust relatively quickly.