Are You Referring To Me?

Many agents and brokers don't treat the referral process with the professional respect it requires.

September 16, 2015

There's a reason referrals make up more than half of my business. Agents want to work with me on referrals because I treat them like business partners, keeping them in the loop as to what’s happening with their referred client—and, of course, their referral fee. No referring agent or broker will ever have to ask me, "How's it going?" I wonder why there aren’t more real estate professionals like me.

Anyone who refers a client wants clear communication about where the process is going. I update referring agents weekly. They'll know when an offer is being written and when a contract is signed, as well as what day we're opening and closing escrow. In essence, I consider agents who trusted me with a referral to be working alongside me through the deal. So I communicate with them as such; a little information goes a long way.

Need for Clarity

I'm also clear about my referral fee: 30 percent of the commission. And I’m proactive about letting referring brokers know that I will set up their referral check to be paid directly from the closing company. They won't have to wonder why they haven’t received payment.

Unfortunately, I often have a very different experience when I refer my clients to other agents and brokers. From the get-go, it can even be hard to get anyone to respond to the question, "Do you want a referral?" Similar to when consumers complain that practitioners do not respond to their online inquiries, I get silence 80 percent of the time when I reach out to other agents seeking help for my client. When it comes to collecting referral fees, I typically have to ask for payment or bug an office manager for the status of a check.

The way some agents and brokers handle the referral process is appalling. I once referred my best friend, who lives in the Midwest, to an agent who became incommunicado with both of us soon after taking the referral. When the agent answered questions via e-mail, it was with one- or two-word responses. She would disappear and go on vacation at the drop of a hat. I began to follow up weekly.

My friend's doubts deepened after she signed a contract and couldn't get the agent to address key problems found in the home inspection, such as a nonoperational furnace. Hearing about the agent’s poor follow-through skills from my friend was embarrassing. While my friend signed a contract six weeks after I made the referral, it took another seven weeks after the closing for me to receive the $1,500 referral check.

So who's at fault for such referral troubles: the agent or the broker? Actually, both.

Payment is the responsibility of the broker. It's up to the referring broker to explain how and when you’ll get paid. But communication throughout the referral process is an agent issue—assuming you made the referral to an agent. Real estate professionals who don’t treat referrals with urgency and importance stand to leave a lot of money on the table in fees. I get referrals from big Los Angeles "brokers to the stars" at large, well-known brokerages because of how attentive I am to their needs. There are brokers and agents in my own county who typically compete with me but also send me referrals. I make it easy and pleasant for them to do so.

A lot of money is at stake in referral partnerships, and we as an industry need to be better in our handling of them. The way to excel with referrals is deceptively simple. Those of us who do it well stand out: We communicate better, are gracious and act professionally throughout the experience, and always offer a "thank you" for the business. Only one person in my 26 years in real estate has ever thanked me for a referral in a quick e-mail. Keep the golden rule in mind when dealing with referrals: Treat everyone as you wish to be treated. None of us is entitled to anything.

Kimberly Dotseth is the -broker-owner of Blend Real Estate in San Diego and was named the Greater San Diego Association of REALTORS® Broker of the Year in 2011. You can contact her at blendrealestate@att.net.

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