Most agents don't understand the necessity of referring clients to other agents. It's one of the least utilized methods of generating commission revenue, yet it requires little or no significant effort. Referral could be defined as generating business from leads that you are unable to work yourself, either due to distance or your inability to handle more business. If your income from referrals is less than 20% of you total, you could easily benefit by beefing up your referral business.
But how do you handle potential referral opportunities in a way that ensures your best chance of success? Here are some of my suggestions:
1) You may only have one personal contact with your potential referral. Try to get as much information as you can, including all contact information, purchase preferences, whether or not pre-qualified and whether or not they have a property to sell. This could lead to a listing or a second referral.
2) Develop good relationships with top producing agents in other areas. It's always better to work with people you know and trust, and top producers usually have assistants and buyer's agents on their teams. They are much less likely to "drop the ball" with your referral, and usually have procedures in place to follow up on the work.
3) Have a follow-up system in place. Check the status of your referral regularly. It gently acts as a reminder that you have expectation of the agent handling your referral, and also will give you a good indication of whether or not you will be sending more referrals to the agent. If they act disinterested or confused, it might be better to seek someone else to handle your business.
4) Educate family and friends that live in other areas to keep an eye out for anyone that might be interested in buying or selling, and ask them to pass their names along to you. Remember to always send a small gift for the referral as soon as you get it, regardless of whether or not it closes. This will ensure that you are always on their minds when real estate pops up in a conversation.
Good luck with referral, and if you have anyone looking in the SW Atlanta, Newnan area pass them along. I'll be glad to take care of them!
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Hi Richard, I just received a referral from an agent and he was not prequalified. I made the mistake of not getting a prequal letter from him right away. I spend many hours searching and looking at homes. We found the one he wanted and it turns out his credit score is in the 400's. I should have known better, but somehow I just assumed since it was a referral from another agent that they had checked him out..... What do they say about assuming.....