What is a Real Estate Referral Agent?
Most people are aware of what a real estate agent does, but not very many people are familiar with what a real estate referral agent does, or why they would ever need one. Acting as a referral agent, however, is a good way to generate an income stream if you have contacts in the real estate industry or you’re an agent looking to pull back from being actively involved in sales.
Essentially, a referral agent is a real estate agent who refers a buyer or seller to another real estate agent who will handle that client’s real estate transaction. Subsequently, the referral agent gets a part of the commission when that client buys or sells a house.
One thing to keep in mind is that the state of New Jersey changed the laws regarding real estate referral licenses in August of 2018. From this point onward, anyone who wants to remain or become a referral agent must have their license with a referral only office. The South Jersey Referral Network is a referral only agency and is fully compliant with these new laws.
How to Become a Real Estate Referral Agent
Before you can become a real estate referral agent, you need to earn your real estate license. After you complete this process, you can choose to become a referral only agent instead of actively working as a real estate salesperson. In addition, you must also be connected to a referral only agency that can receive and process the commissions you generate from referrals. Put simply, anyone in southern New Jersey who wants to profit from referrals must hang their license with a referral only office. Furthermore, this person is not permitted to hang their license with a full-service brokerage company at the same time.
As soon as you have fulfilled these requirements, you are eligible to start working as a referral agent. The most important part of the job is marketing your services. Whether it’s through your own website or social media or a network of vendors and service providers who know prospective clients, a referral agent needs to connect with people who are interested in buying or selling property.
Why Would Someone Need a Referral Agent?
One of the main reasons someone would use a referral agent is if they have never bought property before and do not know any real estate agents in their area. In this case, they could use a referral agent to find a real estate agent who knows their area and is familiar with their market.
Another situation in which a referral agent comes in handy involves clients who are looking for property in areas they don’t know very well. Maybe they are scouting for a second home near a lake or they want a getaway in the mountains but have never actually lived there. If a buyer has a specific type of property in mind, they could use a real estate agent that knows the area to help them find it. Therefore, a referral agent can guide them towards a real estate agent who understands their needs.
Also, sometimes a buyer or seller may have a family member who is a real estate agent, but that agent would prefer not to be involved in the transaction due to a potential conflict of interest. For this reason, the agent would refer the interested family member to another real estate agent.
What are the Building Blocks to a Profitable Real Estate Referral Business?
The key to generating referrals is by maintaining a robust network that can lead you to prospective clients. In addition, a successful referral agent must have a strong list of agents in active markets to whom they can refer their clients. After a client has been referred to a real estate agent, the job of the referral agent is essentially finished. However, a conscientious referral agent will stay in contact to make sure that the real estate agent he referred is doing a good job for the client.
Although a real estate referral agent is licensed to sell real estate, he or she does not actually deal with clients to find or list a property. Nevertheless, this is a great option for a real estate licensee who might be looking to step back from actively showing properties or someone who is great at generating leads but would prefer not to list or show property.
If you are real estate agent based in the South Jersey area would like to become a referral agent, contact South Jersey Referral Network today to leverage your network to create an entirely new revenue stream.