One of the largest networks a realtor can tap into is with other agents. According to the Association of Real Estate License Law Officials (ARELLO), they estimate there are over three million (3M!) active real estate licensees in the USA.
When a client is moving to another state, oftentimes these agents reach out to other agents in their network to hand off their client for a commission.
That’s when you can enter into an Agent to Agent Referral Agreement.
What is an Agent to Agent Referral Agreement?
An agent-to-agent referral agreement is a contract where both parties agree, via commission, that the referee gets paid.
A real estate referral agent can be an individual who is not an active agent because they have set up a system where they are just handing off referrals.
An agent-to-agent referral agreement is a cooperative system that works between real estate brokers, realtors, agents, and clients.
In some regards, agent-to-agent referral agreements will help build professional networks and a loyal customer base, and become a great passive income stream.
How Much Does An Agent Make From A Referral? And How it Works.
The industry generally accepts that the usual referral fee is around 25% of the selling agent's fee. But this is up for negotiation.
Some agents might ask for more as they've done the grunt work of getting mortgage approval and more.
But before getting ahead of ourselves, it's always best to follow a streamlined process and steps.
The steps are usually as follows:
The client must be onboard for the referral
Get the agreement in writing
Finalize referral fee
The last step is making the referral.
Let's go through the stages.
Talk To Your Client
You will need your client's permission to share their details with another agent. Another element to tackle will be ensuring that they trust your referral.