What is A Real Estate Referral Agent? Everything You Need to Know
The real estate market is booming again much to the delight or real estate agents and referral agents alike! After years of decline, in 2017 it bounced back with an 11.4% increase and has shown no signs of slowing down since.
Have you been wanting to buy a property but need someone to help you find a good real estate agent? If you answered yes, then you need to employ the services of a referral agent.
Wondering what a referral agent is and if you really need one?
You are not alone. Many people know who a real estate agent is but many don’t know about real estate referral agents.
Here is a closer look.
Why Would Someone Need a Real Estate Referral Agent?
A real estate referral agent refers a buyer to a real estate agent, but that’s not all they do, you will learn more about their role as you read on.
Once they refer a buyer, they get a commission. For a real estate agent, its good for business because they have a partner to feed them clients on a consistent basis.
If you are a buyer looking to find a good real estate agent, so you can purchase the perfect home, then a referral agent will help you locate the best one.
If you want to purchase property in areas that you are not acquainted with you may need a referral agent. For example, you may want to buy a second home.
This second home may be in a ski resort town or in an area where there are a lot of beach houses. You may even want to buy this home in another part of the country.
In situations like these, since you may have never bought these types of homes before you will want to find a good real estate agent to help you. The best way for you to do this is to find a good referral agent who will recommend you to a real estate agent.
Even if the home you want to purchase is not a second home, if you have not previously purchased a home you would not have a connection with a real estate agent. In this situation, you would need a referral agent.
The final instance in which you may end up with a referral agent is in a case where a family member who is a real estate agent refers you to another agent due to conflict of interest. In this case, your family member becomes a referral agent.
The Breakdown on How Referral Agents Get Paid
Let’s look at an example to see how referral agents get paid.
If someone wants to sell their house and they pay a listing agent $9000 to put the house on the market. That listing agent may want to keep $5000 for themselves and offer $4000 of the listing fee to the real estate agent who brings you in as a buyer.
The real estate agent may decide to pay the referral agent 25 percent of the $4000 for referring you to them. Which works out to $1000 dollar for the referral agent. So, in this case, the referral agent will make $1000 dollars.
Otherwise, referral agents earn money directly from their clients.
Questions You Should Ask Your Referral Agent About Your Real Estate Agent
Even though you will be paying your referral agent to find you a good real estate agent, this doesn’t mean that you should not have a hand in quality control. What this means is that you will need to make your referral agent aware of the qualities you are looking for so that they can find you the best match.
Since you may have never chosen a real estate agent before, here is a guide as to what you need to look for before you accept the agent your referrer recommends.
Familiarity with the Area
You should let your referral agent know that you want a real estate agent with a great deal of familiarity with the area you want to live in. Preferably, you will want someone with experience as well.
It’s not that you can’t hire someone who has just launched out on their own. However, even if the real estate agent has just launched out, they should have at least worked alongside more experienced agents for some time.
Reviews and Recommendations
Let your referral agent know that you are interested in seeing the reviews and recommendations of the real estate agent that you hire.
This is very important, it is not that you shouldn’t trust your real estate referrer’s judgment, it is just always better to apply due diligence. Read through the recommendations and reviews then make a decision.
Ask Your Referral Agent for an Interview
Remember, that your real estate agent will be helping you to make one of the most important decisions of your life. The last thing you want is to end up with someone who is just interested in getting a rapid sale and doesn’t have your best interests at heart.
Often this can be avoided by setting up an interview with the real estate agent. Make sure that you not only approve of their qualifications but their personality as well, since it is very likely that you are going to be spending a lot of time with this person.
If you are ready to hire a real estate referral agent to help you find a good real estate agent, you have made a wise choice. Referral agents usually do their best to find you a good agent because their reputation depends on the quality of the leads they provide.
However, while this is true, it is never a good idea to just accept any real estate agent, they send you. You should make them aware of your needs in a real estate agent and perform due diligence when they send you someone. This will ensure that you get the best service possible.
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