How to Get Paid for Real Estate Referrals
SUMMARY
- Find the best agent.
- Set the referral amount you charge. 25-35%
- Ask for regular updates.
• First contact/attempt.
• First meeting.
• Weekly to monthly. - Get it in writing and cc their broker.
• Per your broker, their broker is a party to the referral. - Prep your refer-ee. (“If not happy, let me know…”)
- Follow up monthly.
- Get paid.
FULL TRANSCRIPT
This is one of my favorite parts of real estate and nobody ever talks about it, including me. But we’re gonna fix that right now.
Hi there, it’s Kevin Ward the founder of YESMasters Real Estate Success Training helping you get more yeses and more successes in your business and in your life and today let’s talk about how to give referral fees and get paid for it. How to give out not referral fees, how to give out referrals and how to get paid for giving out referrals. And there’s really seven things you need to do, to do this successfully.
Now, what’s crazy is, is that getting paid referral fees for successful referrals is one of the most profitable lucrative opportunities out there in the real estate market, and we really don’t talk about it very much, and we really don’t focus on it very much and, consequentially, most real estate agents don’t ever make much money from referrals and yet when you learn it and when you do it, it’s so beautiful ’cause literally you just make a phone call and an email and a digital signature and then a couple more phone calls, and you get paid, and it’s really the simplest way on the planet to make money in real estate. The key is, you gotta set it up and do it right, or you’re not ever gonna get paid. Have you ever had a referral, had somebody in another city or another state or another town that was moving there or selling or buying, and you referred ’em to another agent and nothing ever happened?
You never heard anything, or they didn’t use that agent, they ended up going with a different agent. That’s happened to me so many times and so I finally figured out how do you get this to actually work where you get paid? And that’s what we’re gonna talk about today. So there are seven steps to getting paid when you send out a referral. The first one and this is where it starts. If you don’t do this, you’re gonna lose, and here it is. You’ve got to find the best agent in that market, wherever you’re referring it to. If you refer it to a sorry agent, you’re gonna get a sorry result and if you get a sorry result you don’t get paid. So, make sure you find the best agent out there. Now how do you do that? Well here’s how you do it.
If you are with a large brokerage, a large company, a large brand that has that brand, the same company offices in that market that you’re doing it to, one of the best things to do is call and ask to speak with the sales manager, the team leader, the broker of record, whoever runs that company because there’s no one that knows an agent in an office better than the broker, the manager, the person who leads the office. So, call and talk to that broker. And you don’t say, “Hey, I’ve got a referral, who do you recommend?” Because you never know who they’re gonna recommend, ’cause sometimes they’ve got a new agent that’s really trying hard but hasn’t had any success.
They go, “I’ve got an agent for you,” and they’re gonna give it to this agent they like and they feel sorry for, trying to help an agent get started and you’re not interested in trying to help an agent get started who hasn’t had any success, because you’re talking about somebody you know and you’re referring them as a client to someone else, you want to make sure they’re gonna be taken good care of, right? So you want to make sure you get the right person, so don’t just ask who would you recommend? Here’s what you ask, if it’s a seller referral, say, “Who are the top three listing agents in this area?” So if it’s a suburb or a certain area in their market, say, “Who are the top three agents in your office in the last year, in that suburb?” And let her know, I’ve got a referral that I want to send out and I want to find out who are the top three agents, the top three listing agents in your market that sold the most listings in that area in the last 12 months.
And have them give you three, okay? And they’ll do it. Buyers agent, same way. Who’s the top buyers agent you have that knows that market best in this area? And ask them to give you three people and as they give ’em to you, now you can ask, “Tell me about them?” Look, it’s a little bit of a hassle I get it, but it’s worth the phone call ’cause now I’m gonna get the best agents so now I’ve got three to choose from. They may indicate that of the three, two of ’em really, they’d think would be better, stronger, great. So I’m gonna make a phone call to that first agent based on everything that I’ve heard, you can Google ’em, check ’em out, check out their website. Any information you find from ’em online. Spend a little time doing some research on the agent because it’s the most important thing in terms of determining if you’re gonna get paid or not and then call ’em.
Tell ’em I’ve got a seller referral, wanted to just touch base. Your broker had said that you where one of the best agents in that market or whatever and have a conversation with them. And what I’m looking for is, do they seem like they’re really interested in taking the referral? And if they are, all right, now we’ve got somebody to go for. If it doesn’t feel right, I’m gonna say, “I’m gonna send you an email … ” Blah, blah, blah, you can kind of put it off and call the next person, try to find the right fit for you. So number one, find the best agent. Once you find the best agent, number two is you set the referral fee. You determine what is the referral, don’t go like, “How much do you pay? What is your typical referral fee? I don’t know what to charge, what do you do?” You don’t do that.
You know exactly how much you charge and if you ever receive a referral, you should know exactly how much you pay and here’s the reality and the beauty of it. When you are clear about how much of referral fee you expect or how much of a referral fee you pay, people will honor it. They’ll just do it. So, let’s just say The typical referral fees I see most commonly are 25 to 35%, more commonly I see 25 to 30%. So let’s just go with 30%, in the middle. And so, you just say, “Great I charge a referral fee of 30%, wanna make sure that works for you.” That’s it. I charge a referral fee of 30%, I want to make sure that works for you. Don’t say, “Is that okay?” Don’t ask a question, I just want to make sure that works for you, ’cause that’s what it is. It’s the price of my referral, 30%.
Whatever it is. You could do 10%, I don’t care. But whatever it is, be clear, be certain about it, all right? I recommend 25, 30, maybe 35%, you just don’t want to take away the incentive from the agent to do a great job as a great agent. So you set the fee. Number three, you want to get … Once you make the referral, now you make the referral, I’ll give a little more on that in a minute, but you want to make sure that you’re going to get updates, regular updates from the agent that you’re referring it to. Now, here’s what I let ’em know, I say “Great, I’m gonna send that to you, just want to make sure that you’ll give me updates and keep me in the loop because this is my friend, this person I know ’em and I want to make sure they’re taken care of. Do you give updates? Yes? Great.” So here’s what I want them to do and I’m gonna ask for these three things about updates.
Number one is upon your first contact or attempt with my referral I’m gonna send you their information, I expect the agent to contact my referral, my referee, I do not expect my referee to contact the agent. Some will but most of ’em won’t. ‘Cause they’re nervous and they don’t know the person so I’m expecting the profession, who’s the agent, to contact them, all right? Upon on your first contact with them, when you call ’em or you call ’em and they answer or you call them and they don’t answer, I want a report. So when you make first contact, or at least have left them a message, would you let me know? I just want to make sure everything’s moving forward. Cool. Number two is after your first meeting with them, after the listing appointment or a buyer consultation, when the agent that I’m referring it to first meets with my referee, I want to make sure that it went well.
So I want a follow-up after the first meeting and then the third kind of update I want is I want a weekly to monthly update on the progress. If it’s a heavy, hot motivated client, then I may want a weekly update. Let me know when it’s on the MLS. Let me know when it’s got a contract on it, when it’s under a contract and when it closes and so forth. Let me know what’s going on, keep me in the loop. Now, as long as you’re getting updates, guess what? You’re gonna get paid because the communication channel is open and they know you’re paying attention to the referral and this is the key, pay attention to the referral. If they don’t report to you and give you an update it’s your responsibility to reach out to them. And so put that referral … I treat it as a lead and put it my lead system. My hot lead folder or my warm lead folder so I know how often I’m gonna be following up with them.
If I don’t hear from them, they’re gonna be hearing from me because it matters. The client matters and I want to make sure they’re being well taken care of. Now, number four, when you get the referral, you want to get the referral in writing. Do not do a verbal referral. So check with your broker, your office, to find out if your company has a policy of how you send out the referral, you figure that out talking to your broker and so forth but you make sure it is in writing. Period. You send it writing and I recommend that when you send it out that you have both the receiving agent and the receiving agent’s broker sign off on it, because again, the broker in any market, the broker of the office actually owns the commission and they’re held to a higher standard. So you’re more likely to get paid.
Number one, you gotta have it in writing, number two, I recommend you have both the listing agent or the buyers agent, the agent that you’re referring it to and their broker sign off on it and you let your broker in the loop with all this communication. It just keeps everything formal, and that’s how you get paid. Number five, is you want to prepare your refer … I’m not sure how to do this, refer-ee, okay? It’s not a referee, it’s not the referee, it’s the refer-ee. So it’s the person that you’re referring to the agent, you want to prepare them for what’s about to happen. I’ve done some research, I found the best listing agent in that market, I’ve talked to them, they’re excited to help you and they know how to get your sold for top dollar. And that’s the reason I’m sending you to them ’cause I want to make sure that you’re taken care of, ’cause there’s too many agents out there that are amateurs and I don’t want you to get stuck with one.
I wanted to make sure you have the best agent. And you let them know, by the way, your referee, you let them know before you start this. As soon as you find out from this person that they’re getting ready to sell their house in this other city, immediately go, “Great, you know what? Let me find you the best agent out there. I’ll look and I’ll find two or three of the best agents and we’ll get you hooked up so that you’re taken care of because there’s so many amateur agents out there and some of them have a good slick sales pitch but they don’t know how to deliver the best results and I know you want the best results, right? Awesome. Let me do some research real quick, and I’ll get back with you by the end of today or tomorrow at the latest with the best agent to help you get this going.”
And so you let them know what you’re gonna do, and then you do it and then once you’ve done it, now I’m prep my referee and say, “Hey, I’ve just sent your information. I’m sending your information over to this agent, I’ve talked to them, they’re awesome, I’ve checked them out, I’ve talked to their broker. You are gonna be in great hands. They’re gonna call you and they’re gonna set up a time for you guys to talk and a time for you to meet. Here’s what I just want you to know, I want to make sure you’re taken care of, so if it doesn’t go well or if after you meet with them you’re not feeling great, let me know and I’ve got a backup.” Kay? ‘Cause what you wanna do and I’ve had this happen and this broke my heart was I had a great, heavily motivated seller that called me and I’m like, “I got you, let me check,” I called the broker, found a great agent, referred ’em, they brought the agent in, had the listing presentation and the listing agent did not wow them.
And they were not happy and so instead of letting me know, ’cause they didn’t want to bother me, they went and found another agent and listed with another agent who turned out to be an amateur and it was a nightmare. And they ended up renting the property instead of selling it because it was on the market, vacant for so long it was just a big mess. So make sure that you let your refer-ee know, if it’s not going well, let me know. I want to help you, I want to take care of you, kay? And I don’t ever try to hide from them that I’m gonna paid a referral fee. Don’t ever talk like, ” Well, I don’t want ’em to know I’m making money on this.” Look, I’m doing the work to make sure they’re protected. It is totally legit and appropriate for you to get paid a referral fee because you’re making sure they don’t get stuck with a bad agent.
So don’t be afraid to do that, really important that you do this. And then number six, is once you’ve got all the ball rolling, agents got the referral or the referral started is now your responsibility, and I kinda already mentioned this, it’s your responsibility to follow up and make sure both that the refer-ee is happy and the agent has taken care of business. It also let’s the other agent know that you’re not just giving it and forgetting it. ‘Cause if you give it and forget it, you’re very likely never gonna see a referral fee. So when you’re following up, they know you’re paying attention and just set it as a reminder in your lead followup system, in however you have a reminder setup in your system. If you’re one of my coaching members, then you can set them up literally, as one of your A Teamers that you’re gonna call every month just to stay on top of it and make sure everything is happening well.
And if you do all of this, then the seventh step is just a breeze. And it’s simply, number seven get paid. It’s the best part. Yes, yes, yes. When you do this right my friend, you’re gonna make money. Keep your eyes and ears open, build the relationships with people you know both in your local market and people all over the place in every town, in every state. When you know somebody, let ’em know, “Hey whenever you or somebody you know is looking to buy or sell, I network with great agents all over the country, let me know and I’ll make sure you get hooked up with the best agent.” Because there’s so many agents out there who are not professional, who are not skilled, who are amateurs and I want to make sure you don’t get stuck with the wrong agent.
And when you do that, you’re gonna get referrals, you send ’em out. You’re gonna get referral opportunities, you’re gonna send ’em out and when you follow the seven step process, you will get paid. Now I’m gonna do another video in the near future on how to get more referrals. That’s a different conversation but if you like this one, make sure you give the video a thumbs up, post any questions or comments that you have on it. Share this with other agents that you know, need and want to get paid on their referrals. Make sure you subscribe to the channel and I’ll see you on the next video.