Real Estate Agent and Trainer, Robert Rico, explains what the real estate referral system is all about and how it works. Do you want to see more video blogs? Subscribe here!


One great way for agents to make money without doing much work (also known as passive income) is via referrals. There are two main ways to go about this.

  2. refer past clients

    A great way to get more clients is via word-of-mouth referrals from your past clients and sphere of influence. It may sound obvious, but you should be actively asking your past clients to recommend you to their friends, family, and their sphere of influence, as well as following up with your past clients regularly to see if they can become repeat business.

    People are also interested in a referral system for their own businesses. If you have a lot of self-employed clients, be sure that you are referring business their way too! Every real estate agent is asked, at some point, for a recommendation on a painter, mover, stager, landscaper, or something. If you know good people in these fields, absolutely refer business their way so that they can refer business back to you.

    Asking for referrals is a natural source of business and also one of the ones that comes with high trust capital. People trust the opinions and recommendations of people that they know, so asking for referrals will ensure that you get positive feedback and a warm introduction to your new potential clients. They will also think you are more trustworthy from the get-go, since their friends recommended you.

  4. referral

    First, let’s say you have a client in your city who wants to move to another city where you don’t know the area, but you do know an agent over there. If your client uses the agent you recommend (for example, to buy a home), that agent will give you a pre-determined amount of their commission in exchange for you sending the business to them.

    A second way for earning income on referrals is through deals in other states, where your license is not valid. Refer your clients to a local agent in the area they want to buy or sell, and sit back and earn your portion of the commission (generally 25%). This is all contracted via a referral agreement. If you refer them to a good agent, chances are good that the transaction will complete, thus earning you and the other agent your commissions. Plus, if you recommend someone good, you have built and maintained trust capital with the clients, which is crucial to ensure you get repeat business and referrals from them in the future.

    A third idea is to send business to someone you trust in exchange for a portion of the commission (or if another agent sends you a client). Sometimes it’s an out-of-town deal where you wouldn’t be the best agent for the job, or maybe another agent is on vacation and you’re the one helping manage their business. If you are helping another agent out, you would take over the leads and clients they would normally handle, but treat them as your own while the agent is on vacation. Depending on the agreement, you might get to handle the deals for those clients even after the agent comes back from vacation, which will earn you repeat business and a sense of goodwill from the clients. Either way, you can earn money in these ways and even earn a new client along the way!

As you can see, there are many different ways for referrals to work for you. Whichever route you choose – any or all – should be a great way to earn income and boost your reputation, all while helping out fellow agents and business owners!


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