At first glance, referring clients to another broker might not seem to make sense from a business standpoint. But look closer – making referrals can improve customer service and grow your business.
A large part of the value you offer home buyers and sellers is your local expertise—your knowledge about the area, the schools, the services, and the culture, as well as all the special considerations, like building codes, local governances, and much more. When a home buyer or seller contacts you about an area you’re unfamiliar with, it’s important to evaluate whether you possess the knowledge, experience, and training necessary to complete the transaction. It’s simply a good customer service practice, not to mention it’s part of your license obligation.
Know Your Area of Expertise
Many real estate professionals choose an area of expertise because it helps them better market their services. It also helps them articulate their value to potential clients. Because they know the area well, real estate professionals can easily follow through on everything they’ve promised. This makes for a successful real estate transaction that leaves the client feeling like he or she received the best possible service. Plus, when you know your area of expertise, it’s easy to determine when a referral is necessary.
I have given several referrals outside of my local expertise. The most recent was a woman looking to move back to either Loveland or Fort Collins due to a divorce. I feel that handing her off to someone that was better connected to her area of interest showed that I am a true professional and as a professional I understand that her best interests were served by finding her the most qualified person to help. This builds trust and confidence with the public. She said she was so impressed and that she intended to refer me to anyone she knew in my area of expertise because of this professionalism.
Get to Know Other Local Experts, Build Business Relationships
One of the best parts about referrals is that they’re reciprocal. When you send clients to other local experts, they send clients to you. Soon, you’ve built a statewide network of business associates you entrust with your clients and who can trust you with theirs. There are several ways you can start to build your network:
- Search for an agent using REcolorado Matrix
- Search for an agent using Homesnap Pro or REcolorado.com
- Attend industry events
- Network through your REALTOR® association
I received many referrals through my (then) company’s referral system. I became friends with my clients and the referring agents, and so the referrals boosted both my business and my personal life!
Make a Referral, Earn Extra Money
When you refer a client to another broker, that broker agrees to pay you a referral fee when they earn the commission. Some real estate offices already have referral programs in place, so be sure to ask your managing broker. When a referral is made, the client is happy they were able to work with a local expert. Furthermore, the broker is happy about the professional connection and commission. And finally, you’re happy the client was well taken care of, and that you made a referral fee. It’s a win-win-win.
I referred my mother-in-law’s home to a broker in Denver because I live in the mountains and didn’t think that I could service the listing properly and didn’t know the market as well as the Denver broker did. She did an amazing job for my mother-in-law and I was happy to get paid a referral fee.REcolorado subscriber
Originally published October 15, 2020 — Updated March 29, 2021