Agent-to-agent referrals are an integral part of any successful agent’s business. But as a new joint report from national realtor referral network ReferralExchange and the Council of Residential Specialists (CRS) reveals, agents don’t see the value of a referral restricted to the potential commission payout.
A successful real estate agent understands the “Referral Economy,” and uses it to his or her advantage.
Why pay for a lead?
While a transaction from a referral has a higher chance of closing, referrals are more than simply business leads. According to the report, over half of all respondents said that inbound referrals result in a closed sale about 65 percent of the time. Several agents said that the highest rate of success with closing a transaction was when the referral came from their own sphere of clients. Indeed, 58 percent of outbound referrals were reported as coming from past or present clients.
Show me the money
Many agents are willing to pay for quality referrals. It’s a mutually beneficial relationship: According to the report, 85 percent of respondents said that they received 25 percent of the final commission for referring a client to another agent.
But the report’s authors warn against the idea of getting rich using only referrals:
“The referral fee is without a doubt an immensely important aspect of life as a successful real estate agent, but it may not be most agents’ top priority. Indeed, in the short term, the referral fee is important. However, it’s the agent’s reputation that will provide long-term income and continued success.”