The Two Types of Referrals Every Real Estate Agent Should Master

By David Brough

From a young age, real estate captured David's interest, and that passion has remained throughout his life. Over the past 15 years as a Realtor.

The real estate business runs on referrals. They are the top source of new clients, and every agent wants more of them because they help build trust, strengthen relationships, and bring in quality leads. If you want to thrive in this business, you need to learn where referrals come from and how to respond to them. Here are the two main types of referrals and how you can handle them the right way:

1. Referrals from your sphere. The first type of referral comes from your sphere and past clients. When someone from your network sends you a referral, thank them right away. Do not wait until the transaction is complete. The timing of the closing has nothing to do with when gratitude should be shown.

Delaying appreciation sends the wrong message and may discourage future referrals. Anyone who refers you should be added to your top 50 list and given ongoing attention. A referral is not just a one-time favor. It is a sign of trust, and it should be treated that way.

It is also important to talk about referrals regularly. Do not assume people know how to refer or what to do. Keep the message clear: referrals are appreciated and are a key part of the business.

2. Broker-to-broker referrals. The referrals from agents in other areas who are looking for someone to help their clients. These usually come with a 25 percent referral fee, which is taken from the gross commission income. This fee goes to the referring broker, and both managing brokers will sign off on the agreement when the deal closes.

When receiving a broker referral, show enthusiasm. Sometimes, these referrals come from close relationships, like a friend or family member. Show that it matters. This helps the referring agent feel confident that their client is in good hands.

What you need to know about fees. Referral fees can vary. If the client is a hot seller, the fee can go up to 30 or 35 percent. If the client is a first-time buyer who needs more attention or is not pre-approved, the fee might be lower, around 15 to 20 percent. Keep these general guidelines in mind when discussing referral fees.

Referrals are not just about getting names. They are about relationships, trust, and showing people that their effort to help is seen and valued. When you handle them the right way, they can become a steady and valuable part of your real estate growth. If you have questions or need guidance, please reach out. You can call me at 260-750-2818 or send an email to david@anthonyrealtors.com. I look forward to hearing from you.