This article explains how to become the go-to referral agent in your market whenever an out-of- the-area real estate agent has a client to send to your area.
We discuss proven ways to become the local expert in your market.
Finally, we wrap it up by showing with minimum effort; how you can achieve maximum results to ensure that other out-of- market agents know you’re the go-to person any time they need an expert Realtor in your area.
First, let’s start with the basics.
What is a referral agent?
A real estate referral agent is a licensed agent that connects sellers and buyers with experienced agents in other markets outside of their local area.
Note: Several states have local laws dictating a special status real estate license that restricts agents from sales but allows them to send referrals to their brokerage. In this article, we’re focusing on the active agent.
Real Estate Referral Agents have established relationships with homeowners looking to sell and home buyers looking to purchase a new home. For several reasons, they may not be the best for that particular transaction. When that’s the case, they’ll find another expert in the client’s desired market and refer the client to that agent.
Why act as a referral agent?
There are often reasons why an agent who has a great relationship with someone isn’t going to be a great fit to represent them in a real estate transaction.
The issues vary from person to person and transaction to transaction, but there are a few common reasons.
Sometimes the desired property type doesn’t quite match the agent’s expertise. For example, the traditional residential Realtor will refer clients interested in buying commercial real estate to a commercial brokerage.
Another widespread reason a real estate agent will send outbound referrals is due to geographic location.
Real estate licenses are usually bound to state borders, and agents typically only have advanced knowledge of their local market.
When a client needs an expert outside of the geographical area their trusted agent covers, that agent will look for an outbound referral partner.
When sending an outbound referral, the referring agent will usually receive a standard commission rate of 25%. Still, each situation is independently negotiated based on the details of the client’s needs.
How can agents get more referral clients?
There are several ways in which agents can get more referral clients. Let’s break down each method here so you walk away with a comprehensive strategy for building your business as a referral agent.
Educate existing clients
First, they can ask their existing clients to refer prospects to them. Many clients are not aware of all services agent can offer. They might not know that agent can help them nationwide, not just in local geographic area.
Educate your clients, have a page in your website specifically about referrals and your nationwide partner agent network.
Once clients understand your services, next time when they or their friends, family looking to buy or sell home, you will be in their top of mind and will contact you for help.
Once the client contacts you with the referral, it’s essential to explain what kind of relationship you have with partner agents and what makes your partner agent an excellent choice for that particular transaction.
Having client understand what they will do as a referral agent, such as doing a warm introduction to partner agent goes long way in success of the referral and tracking the referral later.
Agents may be surprised with how receptive their clients are to the idea, especially if they’ve had great experiences with that agent in the past.
This can serve as a reminder for agents to ask clients for referrals. Sometimes what’s apparent to an agent is not always obvious to a client, and an occasional reminder, education can go a long way.
Keep in mind that real estate commission requirements dictate that referral fees can only be paid to a licensed broker, never to the general public.
Network with other agents
Agent to agent referrals, also known as broker referrals, are the 2nd best referral source. What is excellent about these referrals; they already have a working relationship with referral agent, educated about the home buying or selling process, are qualified and ready to execute the transaction.
All it takes is a simple message or phone call to the partner agent to start the relationship. Follow-up email with information, website, social media links about you will help reinforce the relationship.
Real estate referrals are largely based on relationships and trust among agents. Being a pre-connected agent goes a long way in attracting more referrals to you versus someone who is not a connected agent.
Referrals.io makes it very easy to invite your partner agent, add to your network, view your network on the map visually and manage the relationship.
When an agent is looking for another agent in a particular zip code, they would filter by location, specializations to see agents on the map and send a referral.
Some agents might want to broadcast to pre-connected agents near to the client’s desired location, and others might want to do a public broadcast referral to all agents near to the target location. Learn more about the types of referral exchange.
For the maximum success of receiving more agent referrals, connect with as many agents from different geographic locations as possible.
Identify a niche to generate more outbound referrals.
Start by identifying a niche in your local market, the area you know best. Once you’ve done that, you can dig into why those people move when the time inevitably comes.
You’ll find some common threads. Sometimes in urban commuter areas, you’ll notice a trend that young professionals move out of their two-bedroom condos around the age that they have their second child.
If they’re staying in-state, there may be a popular suburb that most people move to from the city. If that’s the case, you can find an agent in that area to refer clients to and begin an outbound referral partnership with them.
Title companies offer great tools to agents for prospecting and research. They have many filter options to identify the targeted clients and building lead farming profiles. Check with title company you work with and ask about farming tools.
Find agents who service the types of clients you don’t
You can also build your outbound referral strategy by finding agents who work in different market segments. Commercial, industrial properties and even land are often a different niche than residential agents avoid and refer out.
Strip malls and commercial office space are other opportunities to find referral partners in and around your market.
Tap into property syndication groups
Many clients forming investor groups and investing in alternative real estate investments by forming syndications. This is a great opportunity to network with those groups and people those facilitating syndicated transactions.
These groups often high net worth individuals looking to buy more residential properties by distributing the risk with other investors. Networking with one group provides an agent big number of clients and referrals.
Network ahead of time for referrals exchange
How do agents get referrals from other markets or even out of state?
The most common way agents get referrals is by building relationships with agents in other markets well in advance.
As a sending agent, by being prepared, you ensure you’re not at risk of not negotiating the best fee for the referral, at minimum losing those 25% referral fees by scrambling to find a quality agent for your client at the last minute.
We covered some quick strategies in another article “guide to real estate referrals” you can visit to learn more.
Leverage easy digital opportunities
Email signatures are missed opportunity for many. It’s a great place to put a link asking partner agents to connect with you and exchange referrals.
Referrals.io has a feature where it generates a special invitation link for you. Just put that link in email signature for partner agents to click and send connection request to you. Having connected with other agent helps you to stay in top of their mind when they need an agent in your area.
Page for referrals in your website
Another great digital opportunity is add a page in your website specifically for client and agent referrals.
Referrals.io has a solution to display partner agents network map in your website so you stay in client mind for their nationwide real estate needs. Contact us for more information. Make it easier for other agents to connect and partner with you.
Agent network map integration like above is a live map. Whenever new agent connects with you, above automatically updates to show more markers.
Attractive referral ad
Create an attractive referral ad targeting fellow partner agents. People like visuals over the text. Good graphic ad about your referrals will help catch the attention of agents quickly.
Referrals.io platform has a special feature to design and publish agent referrals ads. These ads are searchable by other agents with filters like location.
One of our referral toolkit features is the ability to promote yourself and your local expertise on our platform, so anytime agent logs in looking for a referral agent in your area, they see you right away.
No waiting for search engines to find your content or residents to see 7-10 pieces of your content over a couple of months – our ads ensure agents see you as the local referral expert in your market.
If you’d like to learn more about building your business by referral, we post a short, actionable breakdown, tactic, or strategy designed to help you grow your referral business regularly and update existing content.
Read our previous post about agent-to-agent referrals guide and why they are key channel to grow real estate business quickly.
Social media and landing pages
Once you have above email signature personal invitation link or website page dedicated to referrals; you can publish graphics, content in social media, Facebook, Instagram etc., linking clicks back to your landing pages.
What is the Digital Mayor Strategy for Real Estate Agents?
The Digital Mayor Strategy is a term you’ll find all over the internet since the rise of social media marketing in the real estate business.
The goal is simple: become the most trustworthy referral partner in your market, so others will trust you to be a great referral partner for their clients.
When the mayor of a small town walks down the street, everyone knows who he is. When he stops in to get lunch at the local pizza place, they know him by name.
In this strategy, as you continue to build your presence in the social community, you become the trusted referral partner and hear others mention, “We see you everywhere!”
How to Get Started with The Digital Mayor Strategy for Real Estate Referrals
This is the point where most agents turn around and walk the other way.
The idea sounds great in theory, but when it comes time to turn the camera on or sit down at the keyboard to do the work of becoming a local expert, frequently, something else becomes a priority.
Start small, and focus on showcasing stories, businesses, and people from the community – not production quality.
You can get started with your phone and a $10 phone stand. Make sure the camera is at eye level and stable. Have a source of light in front of you (daylight keeps it simple.)
That’s all you need for production value right now. If you provide great information, no one will remember you didn’t have any special gear. Focus on the community. It’s OK to share real estate information occasionally, but don’t overdo it.
There are exciting stories in your area that people would love to hear, but no one is covering them. Local businesses that have been around for a long time are a great starting point, as are prominent people in the community.
Another great opportunity is local niche radio stations. There are many radio stations serving different cultural groups. Start a segment like “Your local realty expert talk” for 30 minutes a week to answer listerns questions about the market. This is a free sweat equity marketing to get your name to large network of audience.
Leverage digital marketing to build your local brand.
If you have your website, consider adding landing pages or niche-focused pages for your community. Each market area has its niches, but let’s use the example of a commuter city with a train station that’s within walking distance from residential neighborhoods.
A simple 5-minute video where you set out to show the walking route to the train would be a great attention grabber for anyone who’s not familiar with the city but is considering moving in the future.
Start by showing the route on a google map and talk to the camera for 10-15 seconds.
Cut to a quick interview with the owner of the coffee shop where everyone stops in the morning, giving the viewers a behind-the-scenes look.
Wrap the video up by walking into the station and showing the ticket machines or purchasing window and arrival and departure boards, so anyone not familiar gets a sense of what the station looks like.
That’s it. Later, you can repeat the process for the commute home. Instead of the coffee shop, stop off at a local bar or restaurant and do another interview, showing the viewers that your a local expert, and know the ins and outs of your market (not just the real estate, but the community, too.)
This method has been wildly successful for agents who execute it properly. You’ll find that it starts slow, but if you keep at it, you’ll reach a point where people begin to become familiar with you.
Over time, you’ll notice that searches on Youtube and Google will point people toward your content, too. That’s one way to be branded as a local expert and built trust for more referrals.
How can agents send and track referrals?
You may be an agent sending out few referrals a year or investing to build a business based on exchanging lots of referrals; you need a way to connect with agents, send referrals, get updates and track them to close successfully.
Several agents shy away from pursuing agent referrals income stream knowing its manual, labor intensive work to track until referral closes and referral fee check arrives.
Like most of real estate relationships; agent to agent referrals have been built on trust between agents involved.
Connecting with agents and establishing your referral network makes the process easier and smoother.
3 ways of exchanging referrals
There are primarily 3 ways of sending referrals to partner agents.
Private Referral – Send to One Receiver Agent
Send the referral to single selected agent at the client desired location.
Network Referral – Send to Connected Agents
Send to multiple pre-connected your network agents near to client desired location.
Network referral provides the benefit of sending referral only to selected agents and also increases chance of success with one of the receiving agents accepting and connecting with the client quickly.
Public Referral – Broadcast to Multiple Agents
Broadcasting referral to all agents in the target area provides many benefits. Gives maximum exposure to referral offer and triggers responses from multiple agents for sender to chose and award to one.
It increases exposure to your brand. As it sends notifications to targeted agents, they learn about your brand and would like to connect as partner agent.
Success story $151,000.00 GCI of agent-to-agent referrals with no cost
Setup system for your referral program
Whatever method you chose to send referrals, core things remain same i.e, setting up referral processes, making it easier and building your referral network.
Use any number of strategies agent has for forming strategic relationships with other agents and real estate brokers across the country.
There are no boundaries or standard practices (as long as all agents meet the local licensing requirements in their state) regarding how many markets or which agent will be the best fit for the client you’re looking to refer.
It’s vital to perform due diligence when searching for a receiving partner agent. Check their profile, online reviews, talk on phone, check how their brokerage works, who will sign the referral fee agreement and how the commission fee check will be sent to you.
Once you identify the trusted, motivated referral partner agent who will take good care of the client, you can invite them and connect in referrals website. It helps you to build your own private referral network and provides many benefits like we discussed above to maximize inbound and outbound referrals business.
Having a dedicated referrals app incentivizes agents to actively engage to get more referrals for inbound and outbound transactions with hassle-free experience. With software tool, you don’t have to pay additional referral fees to third-party companies on every real estate referral transaction.
Grow your nationwide referrals and business income.
As a Realtor, we often forget that we can actually help clients across the nation. Not just the local area where our expertise lies in.
Imagine how quickly you can grow business if you can increase your income by 25% annually and it compounds fast from there. In National Association of Realtors survey, majority of active referral agents mentioned that 1/4th of their incomes comes from agent-to-agent inbound and outbound referrals.
Next time when you are having conversation with clients, business partners, family and friends; if you hear conversation about someone wanting to buy/sell home in another area; do not pass it. Know that you can help them as referral agent and provide a great service.
In similar fashion; there are agents from across the country looking for agents in your area to help their clients.
Referrals from other agents are the best, yet the process is difficult, and often tracking is lost. Leverage hassle-free solution built for networking, agreements, alerts, and automated tracking of referrals with ease. Start today with email, it takes 2 minutes to begin and work towards becoming a top producing agent.