When you think about real estate referrals you probably think primarily about former clients and other members of your sphere of influence. However, an important source of referrals can be your professional network, including affiliated professionals like lenders, stagers, contractors, and attorneys.
How can you build a professional network that is not only robust but reliable, providing you with referrals year after year? And how can you provide your real estate clients with referrals to well-qualified professionals while maintaining your credibility and professional integrity? What follows are optimal practices to ensure the best outcomes for everyone involved in a referral network.
Identifying qualified professionals
The first thing you’ll need to do is carefully choose the professionals with whom you want to network. This is not the time to reach out simply based on personal preference or second-hand friend-of-a-friend information. You’ll want to find folks who are experienced and hard-working, ready to give clients the same level of dedicated, responsive performance that you provide yourself.
Remember, everything that your affiliated providers do reflects on you. Even if your clients love you and the service you give them, they’ll think of the professionals around you as part of your professional “team.” That means that any dissatisfaction they have with your affiliated colleagues will become part of the experience they associate with you.
Reaching out for the first time
If you’re serious about cultivating a process for professional referrals, you don’t want to reach out casually on social media or via text. They may mistake your serious inquiry for spam. Send an email or, if they have a scheduler, schedule an appointment to discuss ways that you can collaborate with them via phone, Zoom, or an in-person meeting.
If you know someone who knows them, ask for an email introduction to smooth the way and establish your bona fides. If you don’t, let them know how you heard about them—from your broker, a colleague, a client, or their work from a recent transaction.
Negotiating the referral process
Once you’ve discussed ways that you can refer clients to each other, negotiate a process for providing referrals and discuss compensation, if appropriate. Have your attorney put together a standard referral agreement outlining what constitutes a referral and how much you’ll pay each other, as well as how that payment will be structured.
Different markets have different rules when it comes to fees and compensation for professional referrals. In many areas, only licensed agents or brokers may receive referral fees and then only from broker to broker at the close of the transaction. Be sure to check with your broker or your local association to find out what the specific rules are in your area regarding referral processes with affiliated professionals.
There are a number of ways in which a referral can take place, including the following:
- A referral partner may receive a referral from you via email introduction, and then work with the client independently.
- A referral partner may provide you with a discount in lieu of a referral fee when you book their services directly as part of the package of services you provide to the client.
- A referral partner may receive an email introduction from you and begin working with the client right away while deferring their service fees until closing. This allows you to provide a value-added service while offering additional convenience for the client.
Remember, if your client reaches out to the professional independently, you may not be considered the source of the referral. That’s why it’s important to put a process in place for clarity, and then follow up if you find out that one of your clients is working with one of your partners.
Staying connected and top-of-mind
It is vital to stay connected with your referral source so that you can be the first person they think of when they’re working with a new client. Collaborate on mutually beneficial opportunities to forge a stronger professional relationship, including:
- Co-creating content like blog posts, videos, and podcast episodes
- Coming up with marketing collateral that promotes both of you, and then splitting the costs
- Incorporating referrals into your drip campaigns and sales funnels
- Co-hosting events designed to educate and network with clients
- Co-sponsoring teams, events, or promotional materials at local fairs, festivals, or schools
When you see an opportunity to promote your business, think about who else you can work with to take advantage of that opportunity. Become invested, not just in your own success but also in the success of your referral partners. This will help you to cultivate the kind of reciprocal relationship that will take both of you further professionally.
Following up with clients
If you reach out to clients for feedback, reviews, or testimonials after the sale, be sure to offer them the opportunity to comment on their experience working with your referral partner. This can be a good early warning system in the event that one of your partners is becoming less engaged or less effective in his or her professional services.
Should you find that a referral partner is no longer providing the top-notch service that your clients expect and deserve, it’s a good idea to reach out and tactfully share with them the information. There may be a good reason and the incident may be based on a misunderstanding.
However, be mindful that your professional reputation isn’t impacted by the behavior of your professional partners. Don’t hesitate to scale back or stop working with a referral partner if a change in staffing, failure to scale effectively, or other service interruption is making them less reliable.