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The Nature of Referrals

real estate referral business

I’ve been wanting to address referrals here at Agent Genius for a while – not so much the logistics of it but the attitude behind them.  We can agree that the Internet has changed the way we do business in this industry – whether you are a Realtor, a mortgage broker, building inspector or whatever.

In the past 3 years, our Internet referral business has grown exponentially but there is always a dark cloud that hangs over a lot of the transactions either before they occur or after they are completed.   From the person that keeps referring leads that are not very strong and never come to fruition, to the friend of a friend who ends up not completing their part of the deal.

Whether we are on the giving or receiving end – sometimes these can get a bit complicated – could be paperwork, could be lack of response from actual clients and the result can leave a sour taste in your mouth.  I’m always beyond appreciative of referrals and will go out of my way to help those clients – I also don’t hold the referring party responsible for the clients’ lack of commitment or disloyalty but I know many in this business do.

We’ve had 3 referrals from the same source in the last 3 months and all have turned out to be working with other agents and not been very upfront with their objectives – although we kept on top of the communications with the referring source, I wonder if the client’s lack of commitment reflects on me.

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I’ve also referred business to different local agents with different communication styles and even if they don’t close those deals have found that the ones that kept us in the loop are the ones that continue to get our business.   Disheartening when someone you trust ends up stabbing you in the back…..but that’s a different post for another occasion.

If you refer business, don’t consider that to be a gift either – some of those transactions can take more work that ever imagined, and it’s only right for you to be thankful that the client was taken care of – even if you helped someone make a buck.  I confess that the easiest money we make are referrals that we don’t have to move a finger with and we make sure we don’t ever forget that.

What I’m trying to say here is that in a business of referrals, we need to expect the unexpected and always keep communication channels open.   We need to be honest with ourselves about the level of commitment it will take to service those referrals and never hold the referrer hostage.

And when all else fails – just start drinking the kool-aid and come back and tell me if it helped.  As a mortgage friend of mind just reminded me this weekend when I was complaining about work….. It’s all in the ‘tude. 🙂

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Written By

Ines is all Miami, all the time. A Miami Beach Realtor® with Majestic properties, Ines authors,, and and is always on communication's leading edge. She goes out of her way to engage and be engaged, often using Mojitos to keep the mood light and give everything she does a Miami flavor. You can find her goofing off or instigating trouble at Twitter, Flickr, Facebook or LinkedIn.



  1. Baltimore Homes

    September 28, 2009 at 9:00 pm

    Referrals do take a lot more work or at least most of us think they do. In my opinion, when an agent receives a referral they try to go above and beyond the call of duty to ensure that the new client is well taken care because we feel honored to be referred by a previous client, agent or friend.

    The problem is that most agents will put blinders on and do not follow their instinct. Simply put, clients require you to provide service and evaluate their needs, however if the client is not serious you need to communicate this to the referring party and move on to business with better odds of success.

  2. Ines Hegedus-Garcia

    September 28, 2009 at 9:34 pm

    Nick, you bring a great point – a lot of the so called “pre-screened” referrals are really not, they become a lot more work and the referring party NEEDS to know -it’s never easy, is it?

  3. Atlanta Real Estate

    September 28, 2009 at 9:56 pm


    So far I’ve been lucky with the referrals. This year, I’ve closed two deals from referrals.

    Deal #1 I showed two homes to, they wanted #2 and absolutely refused my many attempts to at least show them the rest of the homes on the day #1 list. BINGO!!

    Deal #2 was the parents of some folks I relocated here last year. Showed them maybe 6 or 8 townhomes and they bought the first one I showed them. BINGO #2!!

    So I’ve been extremely lucky this year with that. All my problematic ones have been leads off my site.


  4. Steven Beam

    September 28, 2009 at 10:11 pm

    I just closed a deal I received over two years ago. Initially the buyer told me thank you but they decided to use someone they already met in town. I was persistent and over an 18 month period gained their trust and finally got the deal closed. Throughout the process I emailed the referring broker of the slow progress and she was thrilled. So thrilled she told me to knock off 5% of the referral fee for my extra hard work. She said she didn’t think she would get paid on it and was thrilled for the check even after such a long period.

    Referrals are almost NEVER easy slam dunk deals but the clients usually turn out to be life long friends and referral sources.

  5. Ines Hegedus-Garcia

    September 28, 2009 at 10:33 pm

    Lucky you Atlanta – it’s been pretty crazy here and none of them are easy – our team has closed a few, but gotta say they have been more work than one of our regular transactions. Nick above is absolutely right – we’ve put our foot down and even asked for buyers agencies or won’t even waste our time (that’s when the referral is an Internet lead).

    Totally agree Steven – just closed a third family member from a referral we got last year. Once you prove your worth, the business is there and friendship even better 🙂

  6. Atlanta Real Estate

    September 28, 2009 at 10:42 pm


    Ahhh, the ‘ole F4 here in GA, the Exclusive Buyer Brokerage Agreement. I call it the EBBA and require that it’s signed at our first or second meeting, or we have a no-go situation.

    This thing has gotten out of hand here in GA and is now FIVE pages long and quite intimidating. Getting a “sophisticated” buyer to sign one of these now is murder and most won’t do it. Too much legalese all over it.

    I pleaded with one of our Brokers recently, who also happens to be on the GAR (GA Assn of Realtors) Forms Committee to please boil this thing down to one page, two pages max.

    Her reply was “no way and it may even get longer.”

    But I’m with you: if they won’t sign this, we are through.


  7. Karen Goodman

    September 29, 2009 at 12:49 am

    I have one person that sends me a lot of referrals. Sometimes they are really tough situations. Sometimes the price point combined with the referral fee makes it less worth my time than a lead I get on my own. BUT, knowing that this person sends all of her referrals to me is enough for me to work hard as I can as a thank you, even if I would have cut the client lose if they had come to me directly. As long as the client wants to work with me, I’ll do everything I can for them.

    On the flip side, I try to be understanding if one of my outgoing referrals just doesn’t work out. I understand that the client may go do something on their own even with the best efforts of the agent that I sent the lead to. As long as I can see that the agent is trying, and I get good feedback from the client I referred, I’ll send more referrals that way even if the first one doesn’t end up panning out.

  8. Joe Loomer

    September 30, 2009 at 6:43 am

    It is not the referrers job to qualify your clients – it’s yours.

    Treat the referrer better than anyone else on the planet – or the referrals stop.

    As for the EBBA in GA – agree with Rob about the convoluted lingo – it’s a hard hurdle to jump when you just met someone and want them to sign something. I typically refer to the bold sub-title on the document, which states:

    “State law prohibits Broker from representing Buyer as a client without first entering into a written agreement…”

    I tell them it’s “Free Realtor Day” but will need the document signed either when we finish our viewings, or when we meet up for our next outing (or better – to go sign a contract).

    Navy Chief, Navy Pride

  9. ines

    September 30, 2009 at 11:38 am

    Don’t get me wrong, we don’t make all of our buyer clients sign buyer agencies – it’s the ones that like working with several agents at a time and don’t understand the nature of our business and the fact that we are not a taxi service and don’t get paid until we close.

    Hearing about 4 pages makes me cringe – eeesh

    Karen, we have someone like that as well – it’s tough because we cannot give those referrals to our buyer’s agents because of the fees involved and at the end, some end up costing us money – but we surely appreciate them and keep working them and don’t think that will change.

    Joe – it depends of the referral – sometimes it may be their best friend, or a family member and the referring agent assumes that they are the perfect client. So when you qualify them and communicate to the referring agent, that’s when it can get ugly. And “Free Realtor Day” makes me smile……we should launch a campaign 😀

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