How to Become a Referral Agent in Real Estate
Advance Commissions For Realtors
Real estate agents can explore many professional opportunities as they gain industry knowledge and expertise in the field. Some experienced agents may move on to become real estate brokers, while others may choose to specialize in specific types of real estate or work with certain types of clients.
There’s another option for real estate professionals to consider: the role of the referral agent. Real estate referrals help to connect clients with agents who will work directly on their behalf. Let’s answer the question of why this arrangement is valuable to referral agents, regular agents and clients, then look at more specifics of this unique type of real estate career.
The value provided by real estate referral agents
Real estate referral agents might be seen simply as intermediaries between clients and agents who work directly with them, but this view ignores the value of the connections referral agents provide.
Real estate platform Compass explained that agents focused partially or exclusively on referrals utilize their relationships with fellow professionals and knowledge of the area’s market in the course of their work. This means thoughtfully considering the agents the referral agent knows professionally and carefully pairing them with a given client.
For potential buyers and sellers who may not have much experience in a given market or with a specific type of real estate — like vacation homes or large metropolitan areas in which real estate goes on and off the market quickly — a referral agent can help them find a dependable and knowledgeable agent. Similarly, referral agents can also provide crucial support when clients haven’t previously purchased or sold a home.
How do real estate referral agents make money?
Referral agents earn their money just like standard real estate agents do: through commissions. The difference is the money comes from the referred agent’s own commission, paid on the successful sale or purchase of real estate. While a single commission for a referral agent is not as substantial as one earned by a traditional agent, it also involves significantly less work.
Referral-focused brokerage General Referral said that while the average real estate agent generally works somewhere between 40-120 hours with each client, a referral agent will usually take about five hours to complete their main task. Additionally, they can reduce expenses — therefore increasing earnings — by avoiding the need to pay MLS dues and professional association dues in many cases.
How do you start a real estate referral business?
Much of the work that goes into becoming a real estate referral agent is the same as becoming a standard professional in the field.
And nearly all referral agents start out as regular agents or brokers. You need to have a real estate license. Additionally, you must either operate your own brokerage or find one willing to work with you in a referral agent capacity to serve as a real estate agent. You’ll also need to maintain client records, market your services and take on many other tasks similar or identical to the work of a traditional real estate agent.
There are a few more unique considerations to keep in mind, as Career Trend pointed out:
- Aspiring referral agents need to learn about licensing requirements specific to this role, which can vary from state to state. An internet search for the state you plan to work in or a call to the state government’s department or office that licenses real estate agents can help you understand exactly what is required.
- Joining a referral network in the state you plan to work in, which will help connect your leads and clients with full-service agents.
- Build and maintain relationships with traditional agents, so you can make effective and profitable referrals.
Why would I want to be a referral agent, rather than actively sell real estate?
Referral agents can work in the world of real estate without facing as much pressure to produce results or demands for their time as regular agents. Retiring real estate professionals sometimes move into this role if they no longer want to pursue full-time work in the field. A variety of changes to your personal, family and professional life may mean this type of real estate work aligns with your responsibilities, needs and goals.
Referrals through Just Commission Advance
At Just Commission Advance, we offer advances to real estate agents on pending sales. As part of our operations, we give professionals in the world of real estate the opportunity to refer their colleagues to us and earn a financial reward for doing so. To learn more, including how a referral can provide income for as long as three years, visit our sign-up page.