It’s no secret that agent-to-agent referrals are among the best lead sources for businesses in residential real estate. They require right updated modern strategy.
Agent Referrals compound over time, have little up-front cost compared to leads from online portals and require 95% less follow-up than running Facebook or pay-per-click ads.
Why do most agents end up waiting until the last minute to build a referral strategy?
From the day you get your license, you’re told to network, contact your sphere of influence, and keep in touch with everyone you meet.
Yet, search for the term “referral” in almost any sizeable real estate Facebook group. You’ll find dozens and dozens of posts with agents yelling into the abyss, “I have a referral for XYZ market in XYZ state!” with hopes that someone raises their hand to identify themselves.
That’s not how you’d treat a friend or family member who asked you for help finding an agent, but it’s expected when looking for a referral partner out of state.
This article will explore the current methods for finding real estate agent referral partners, what’s broken, what works, and how we’ve improved it with our an agent referrals software platform here at Referrals.io.
The Old Way Still Works, Sometimes.
There are a handful of ways Realtors typically find agent-to-agent referrals partners for out-of-the-area clients.
- Facebook Groups
- Local Community Sites like Nextdoor or Alignable
- In house networks within their office franchise
Any of these can work, and do work, some of the time. That’s the problem. You may find a great referral partner today and need someone else in another market next week and be left hanging.
As time goes on, things on social media platforms change.
Looking back over the last twenty years, we’ve migrated from Myspace to Facebook, with Instagram and TikTok now taking the lead. Snapchat and LinkedIn serve different purposes but still pull for everyone’s limited digital attention.
Relying on any specific social media platform means you’re hoping to find someone who uses the same platform regularly, has alerts or notifications on, logs in, and sees your post.
That’s what causes the issue of “Maybe I’ll find someone, maybe I won’t” when looking for a referral partner on Facebook.
Local Groups like Nextdoor are great for residents already in the community. Still, it can be difficult to gain meaningful access as an outsider, looking to find someone hundreds of miles away on short notice.
That leaves us searching on review platforms, scrolling through Zillow, and hoping we find someone that can take a referral for the area their profile mentions.
That’s not the most reliable way to spend time scrambling to find someone, who has time to help your client and guarantee you’re going to get your referral fee on this particular transaction.
How to get paid for real estate referrals
Proactively building a network of referral partners for agent-to-agent referrals means you have a system to rely on.
Just like you use a CRM to stay in touch with clients strategically, you need a system to build your agent referral business.
Waiting until the last minute when a potential referral comes in leaves too much to chance. The odds that someone sees your post works in the right area have excellent reviews, an open schedule, and are an overall perfect match for your client to get slimmer with each requirement we add.
Proactively building your referral network means being prepared when the next opportunity comes in.
You can do it manually or use technology to help you take some of the weight off your shoulders. Let’s take a look at some of the requirements for a strong referral strategy.
You need to know your referral partner’s reputation and expertise.
Sure, this means knowing their names and where they work, but also understanding the market, what type of property they sell, and how they market.
You’ll want to know if they’re a full-service broker or a part-time agent on the side. Do they have a team and admin staff, or work solo?
Questions like these help you stay to match your client to the right referral partner.
You need to know their availability.
If a referral is too busy, you’ll be risking upsetting your client and possibly losing the referral fee.
Most clients won’t reach out to you for a second referral if they have a negative experience with the first. They’ll assume you sent the best agent you knew of and will look for their own agent next time.
You need a way to connect with your referral partner and stay in touch throughout the agent-to-agent referrals transaction.
You need to keep in touch with the agent and be aware of how the transaction is progressing without manually remembering what’s happening every day.
Real estate gets crazy, and if you’re relying on your memory rather than systems and processes, it’s only a matter of time until you miss something. Having an automated system helps here.
You need a way to collect your referral and the required documents when the transaction is complete.
Ensuring everything is wrapped up approaching closing and making sure the payment information for your referral fee is correct are the last steps in an active referral transaction.
Miss one, and your payment will be delayed, so it’s best to have these issues covered in advance, so you’re proactive, not reactive when closing is rapidly approaching.
Pre and Post Closing Strategies
You need a way to stay on top of marketing your referral partners.
When agents are actively trying to find more referral partners, it’s not out of the ordinary for them to spend a couple of hours every week posting, positioning, and sharing their profile(s) across social media platforms.
You can use tools to make your referral marketing easier rather than manually posting on social media.
First, find where the fish gather (where do you find agents who want to get more referrals actively?).
Next, go where the fish are (and bring your tools – the right bait and rods will help you catch more fish with less effort.)
After decades in the business, we saw a need for an independent real estate referral tool to help agents boost their referral business and proactively generate more income from referrals with fewer headaches.
Referrals.io is our system that creates certainty and helps agents build an additional lead generation strategy for their business, boosting their referrals both inbound and outbound.
Using the right tools means you’ll have a system in place when you need it. With Referrals.io, you’ll quickly find your referral partner and know that your client will be well cared for.
Here’s what we do and how our system helps agents proactively build their referral network, so you’re not rolling the dice when that subsequent referral comes in.
Find the perfect agent for your referral.
Build your personalized network of referral partners across the country. Find agents that match the service you provide for your clients, so you can rest assured your clients are well looked after.
Save money and keep more of your referral commission.
Other so called: referral programs, referral companies, referral placement services, referrals exchange program, referral networks etc. charge hefty fee to place referral with them and on top of it percentage-based fees after closing.
We don’t take a cut of the commission at any time, so you’re free to negotiate with your referral partner and come to an agreement on terms for your direct agent-to-agent referrals.
Attract more inbound agent-to-agent referrals.
When you’re a member of our network, you’ll be able to receive inbound referrals from agents anywhere in the country.
Save time by not having to manually manage the entire referral process yourself.
Rely on our convenient automated system to ensure referrals are closed successfully and referral fees appropriately paid.
Market yourself as an agent-to-agent referrals partner to specific areas.
Recent trends show that the COVID-19 Pandemic influences homebuyers to move out of specific areas like the northeast into warmer weather areas like Tennessee, Texas, and Florida.
This study of migration trends shows warmer weather states were the most popular one-way destinations last year.
That’s an excellent opportunity for warm weather agents to advertise themselves in our system as the go-to agent for referrals from their cold-weather counterparts.
With the proper systems in place, an agent can boost their referral business substantially. If you’d like to learn more about our system, you can try free and check it out.