Getting a real estate referral from a former client or family member is a great boost to your business. However, those referrals are generally few and far between. It’s more reliable to join a real estate referral network to get consistent, high-quality referral leads.
However, it’s important to understand how those systems operate. Here’s what you should know about real estate referral programs and the fees they charge:
Many Programs Charge Upfront Fees
A lot of real estate referral companies charge a referral fee upon providing a lead. This helps protect the business, but it doesn’t do much to help you — there’s no way to prevent the company from sending the same referral to multiple agents.
When you choose the best real estate referral network, you’ll be working with a company that doesn’t charge anything upfront. Instead, they take a referral fee only once the deal closes and you actually make money from the client.
Referral Rates Vary
Real estate agent referral companies all charge different rates. The range is between 20 and 35 percent, but 25 percent is the most typical.
If someone is asking you to pay more than 25 percent, be very wary. There are a lot of real estate agent referral websites you can use that will charge you the usual amount, and they may be a better option.
Having a Contract in Place is Important
Any time you receive or place a referral, you want to make sure you’re protected legally by getting all of the expectations in writing as part of a contract.
The contract should include the names, addresses, and license numbers of both parties, along with what to expect. Specify whether the referral fee will be paid immediately or after the deal closes.
If you’d like a free contract template, we can provide one. Simply fill out the form below and we’ll send it over!