Fifteen percent of Jennie Wolek’s business last year was referrals sent to her by other real estate agents. Wolek, CRS, GRI, a sales associate with Keller Williams Realty Advantage in Tulsa, Okla., received 69 referrals from out-of-town agents; 13 closed with her and earned her $86,000 in commission ($3 million in sales volume). The rest were warm leads she added to her customer database to maintain contact.
While many real estate professionals focus on building a referral network with past clients, other agents can be some of your greatest—but often overlooked—sources for new business. But it works both ways: In order to receive referrals from agents, you must be willing to send some, too. Even being an outbound source of referrals can be lucrative.
Some agents say they earn between $20,000 and $50,000 a year in outbound agent-to-agent referral fees, according to “The Agent-to-Agent Referral Economy,” a survey conducted jointly by ReferralExchange and the Council of Residential Specialists. But many are missing out on these opportunities, with a third of real estate pros saying they send only two or three referrals per year to other agents and nearly half saying they earn less than $5,000 annually on outbound referrals.
Agents like Wolek, who has devised an entire system for nurturing a nationwide network of practitioners, say it’s worth the time and effort to make agent-to-agent referrals a priority. Besides serving as an income generator, these referrals help build your reputation and make converting leads easier. Agent-to-agent referrals have a higher conversion rate than any online lead, according to the ReferralExchange/CRS study.
“It’s an easier way to work,” says Wolek. “The people [agents refer] to you already trust you because their friends or agent already trust you. The relationship builds quicker.”
Build Your Agent Network
Linda De Fusco, a sales associate with Keller Williams Arizona Realty in Scottsdale, Ariz., decided to start an agent referral network in 2012 to help clients who were moving away. She realized she could play a bigger part in their transition by connecting them to real estate professionals in their destination city. “[My clients] needed good agents all around the country or even internationally,” De Fusco says. “I wanted to vet the agent for them so I knew they’d be taken care of.”
So De Fusco launched a Facebook referral group, which has grown to 16,000 members across the world. In 2015, she created an offshoot called Affinity Referral Network, which includes about 300 agents. The group allows only one agent to represent each individual community in the U.S. and Canada. Agents must be vetted prior to being accepted into the network, and they pay a $799 annual fee.
If you want to build a small network of agent-to-agent referrals for your own business, how do you get started? Here are a few tips.
Target agents in specific locations. Consider the markets from which people tend to relocate to your area, and focus on networking with colleagues from those places at conferences and events or online. Shannon Williams King, GRI, broker-owner of TriBella Realty in Arlington, Texas, noticed that many of her relocating clients were moving from California. So she reached out to agents across the Golden State to start a conversation about referring business to each other and setting up face-to-face meetings when she traveled to California. Making authentic connections is important, and King says that can be done online as well. Join a real estate-related Facebook group and “watch the conversations, and once you’ve found a group you connect with, respond,” King says. “Answer other agents’ questions and be a resource. You’ll build close friendships online this way.”
Add agents to your CRM. Wolek enters agents’ information into Top Producer to ensure that they receive communications from her going forward. She also flags “referring agents” in the system—those who passed a lead or referral to her and her team—regardless of whether the lead ever closed a transaction with her. If she has an outbound referral to offer, she will consult her database and give referring agents priority.
Create a system for keeping in touch. Wolek has a system in place for maintaining contact with her network of out-of-town agents, including writing a handwritten note after an initial meeting; adding the agent to her social media networks and private Facebook group; mailing a branded, quarterly postcard, which includes a testimonial from an agent who has sent her a referral; adding the agent to her email campaigns; and making phone calls and sending cards for special occasions.
Vet the agents you refer to. If you don’t know how the agent will treat the client you are referring, you could be putting your reputation at risk. Research agents online, read their customer reviews, and evaluate their production numbers and the types of listings in which they specialize. De Fusco vets agents prior to accepting them to the Affinity Referral Network through an application process, which includes verification of their business, how active they are as an agent, and their experience level.
Give back to referring agents. The law of reciprocity is critical to any successful referral network, De Fusco says. You should send referrals to agents who send them to you. However, Wolek, whose city of Tulsa is less transient, says she doesn’t always have a wealth of referrals to offer her network. Instead, she contributes content, such as two- or three-minute videos featuring staging ideas or tips on how buyers can use a personal letter to win in a multiple-offer situation. Her network of agents can use this content in their communications with clients.
Make sure your clients know you have a referral network. You also want to make sure your clients know you can be a source of referrals for them. King tells her clients that she knows agents across the country in case they or their friends ever decide to relocate. If one of King’s friends on social media ever mentions anything about relocating, she messages a congratulatory note to them and offers to introduce them to an agent she knows in their destination location.
Show gratitude for a referral. Wolek sends a thank-you card to the referring agent along with a gift, such as a $5 Starbucks gift card. Additionally, she gives end-of-year gifts to referring agents who referred a client who closed with her. The gift is usually tied in some way to her community, such as specialty chocolates from a local boutique with a note that reads, “You’re so sweet. Thanks for your referral!” “You have to reward the behavior, even if the client doesn’t make it to closing,” Wolek says, “because another agent still took the time to recommend you—and that’s a big deal.”