ReferralCloud does two important things. First we are a referral coordinator. We help agents place their outbound referrals and help track them from initial assignment until the agent who placed the referral get paid. The second, and probably most important thing we do, is to make sure that agents who are giving outbound referrals are rewarded by being first in line in their market to get an inbound referral without paying any upfront fees.
Are any other companies doing referral coordination?
In short, no. There are other companies that do referral placement and tracking but there are two major differences. The first is that the other companies in this space are either charging much more to the outbound agent, as much as 40%, or they are paying the agent who referred the listing less. Some take as much as 50% to act as a “debt collector” for referrals. The other companies doing referral coordination tend to take 10-15% of the referral fee, for their services while ReferralCloud only gets 5%. In addition, there are no other companies acting as a clearinghouse, making sure that the method in which referrals are being assigned to the agents who are placing referrals. This “quid pro quo” is the main reason ReferralCloud exists. To reward agents who give referrals.
Don’t franchises and relocation companies also have referral departments?
Franchises and relocation companies do have their own referral networks, but they are generally more costly and less effective than ReferralCloud, which is why we started the company. In general there are a few problems with relocation companies and franchise referral departments.
- The fees they charge are too high
- They do not generally cover the entire US.
- They self-limit themselves to only their internal network
- Any agent can’t just join and use their network
These limits make it harder for agents to have a robust enough group of agents to find a referral agent and tend to be why real estate agents go to Facebook groups and post “I need an agent in ___” and then get bombed with dozens of recommendations of agents.
Can any agent join ReferralCloud?
Yes. The network we are building is not going to be like the REO agent networks where a handful of agents shared all the information about asset management companies and banks with each other and then made sure that all that lucrative “no-prospect” business was locked up by them. Instead any agent can join, get referrals, place their outbound referrals, and put themselves in a better position to get an inbound referral. The main reason agents join ReferralCloud is because they get real estate referrals with no upfront fees.
What if I just placed my referrals the way I do now?
You can certainly do that. In most cases, agents place their referrals directly and then they get to negotiate whatever referral fee they desire, typically 25%. What they lose out on by doing that is the ability to get an inbound referral from some agent they don’t know and that wouldn’t have given them a referral previously. The idea of the clearinghouse is to make sure that they are rewarded and having the opportunity to have more business in addition to being able to collect referral fees on their outbound referrals.
Why should I trust ReferralCloud and the system?
Unlike Zillow, Opendoor, and the slew of Silicon Valley tech startups that have made it their mission in life to get rid of the real estate agent, the Co-Founders of ReferralCloud are agents ourselves. Every tech solution we have built has been done with one goal in mind, preserve the existing real estate agent to consumer relationship and also to improve the experience for the consumer and help direct business back to agents. One of our most recent startups, HomingIn, helped people who didn’t think their Zestimate was accurate connect directly with an actual real estate agent to give them a home value through the HomingIn app or website. Homing In was a great source of business for real estate agents. During the process of meeting with Silicon Valley venture capitalists we were not popular with individuals who’s goal it was to get rid of agents. Once they found out we were not trying to “get rid of agents like Zillow is” (a famous So Cal investor told us) they simply said they were not interested in supporting the current model of real estate.
That’s unfortunate for them, but its not for us, because that’s entirely what we plan on doing. Supporting the existing consumer/agent model, but instead of being a big tech company that just sells out to Zillow, our intent is to morph this into an API company that ends up actually being something real estate agents just use all the time that won’t work as a separate tech company. Sort of like a de-centralized referral coordinator with a centralized coordination system for distributing referrals to agents.
Why do I care about getting an inbound referrals?
An inbound referral is going to be one of two things. Its going to be a buyer (who needs to sell at some point) or its going to be a seller that has to list a house. Additionally each time an agent successfully helps a client, they expand their sphere of influence, so when one of your clients moves out of town, you can replace them with a new inbound client that will likely also lead to additional business in the future.
Are the referrals all buyers or are any listings/sellers?
Surprisingly we are finding out that its about half and half with buyers and sellers. While most referrals would seem to be buyers being referred from agents who are listing their homes, we are finding that consumers looking in a new market to buy are finding out they need to sell their homes first, and once they find an agent are happy to have them refer them to an agent in their market for the listing. Eventually we will let agents set limits or preferences as to the type of clients they prefer, either listings, buyers or both so that they can focus on the type of business they do best. As we ramp up with more agents using the system we will add more controls for the agent to make sure they are getting business in an area they know well.
What’s the current order for agents and do we have access to see it?
Right now its tracked internally at ReferralCloud on the admin backend. Eventually we will have the ability for agents to see where they are for a referral and how they would move up in priority as they submit more referrals. Currently in a given market its any agent who has placed a referral, then any agent who has closed a referral, and finally any agent who is signed up on the platform in order of when they created their account. The first agent to get a referral was an agent in Kennewick Washington, referred by an agent in Las Vegas, and the agent in Kennewick was the only agent signed up on the site, so they got the referral.
Why did you build ReferralCloud?
The two real estate founders of ReferralCloud have sold over 3,000 listings. Mostly listings. Almost all that business came passively. Passively meaning not having to call expired listings, for sale by owners, SOI, geo farming, other other active methods. In 2009 we were the #1 team in the US with 750 listing sold. Most of that business came from REO asset managers and banks, and we know that passive business is the best kind since it highly scalable and not reliant on agent prospecting. We wanted to help other agents also have passive business and we know the importance of referral clients to an agents business. We also wanted to be able to teach real estate agents how to generate outbound real estate referrals and make even more money.
What if I want to find out more information about the ReferralCloud referral network?
The easiest way is just to read our blog. You can also email any questions to support@referralcloud.co or you could even just call us on our mobile phones. Oana’s number is 702-285-4207 and Todd’s in 702-218-2819.
We are always happy to hear from you and answer your questions.