Fred,

I agree that we as Realtors certainly do support the referral network.  I hope and pray that my sphere of influence continues its open policy.

I wish you success and cooperation in your future.

Fred - The very nature of homebuying puts agents in a position to speak with potential clients first. In my experience, very few come through the door already pre-approved. I actually prefer it that way. Lenders, by the nature of their business, have to depend on a larger group of agents to support them. I have found that by focusing on my personal sphere of influence, I have a constant flow of potential clients to speak with on a regular basis. I think any time spent contemplating a ledger of referrals given against referrals received might not be as productive as time spent focusing on my job.

Surround yourself with people that know you and respect what you do and you will reap rewards beyond any you may have contemplated.

Hmmm, I don't have that problem.  My favorite inspector uses me for his investment property listings, my lenders send me leads OR provide some of the goodies I use to promote my business and listings.  I think I am fortunate that the people I have teamed up with work to create a win-win for all.  I don't hesitate to ask though either.  If I need something, I put the word out and it seems to work.

Fred

You were a source of business that they should have been thankful to have, and rewarded in return.

During this downturn, your mortgage partners should be referring listings to you like crazy. Trust me, we see plenty of people who can't or won't pay a dime more than they are paying today, and need to sell. When times are great, referring buyers should be commonplace.

My ratio has usually been about 4:1. For every 4 purchases I've received, I could consistently document 1 new purchase or listing referral to one of my agents that they more often than not convert on.

If this is not happening, you need to have a talk with your lenders. You notice I didn't say partners, because they're obviously not there yet.........:(

I am hoping that you just need to ask more, for their referrals.  Your service providers should be sending folks your way on a consistent basis.  Invite them to your client parties and events.  Let them feel the power of a referral given out instead of received. You should be part of their events, as well. I cannot imagine working any other way.

It's a Good Life!

Fran Rokicki, Clubnet~Mentor

Hey Fred,

I can understand yuor thought pattern, but I will use myself as an example. I'm a mortgage broker and do not get the opportunity to refer clients to realtors, when I do, I make sure I send them to the realtors who send us the most business. We rarely have a client come to us first for pre-qualification before they've spoken to a realtor. 90% of our advertising is targeted to realtors for the referral business from them, unlike your business, I would assume that most of your advertising is to the consumer. Realtors typically have the first contact with the home buyer and are therefore in the driving postion for who that consumer contacts for additional needs ...IE. Title company, mortgage company, home inspections ....etc. It just the nature of the business. be lieve me, if I knew of a profitable way to market directly to the consumer for purchase financing, I would do it and so would many of mortgage professionals.

Sean Allen

Fred, I read this comment from agents often and frankly I don't understand it.  The person who has first contact with the client is the professional that controls the deal.  As a loan officer I work hard so that clients will come to me first for pre-approval - BEFORE - they begin to shop for a home.

In that manner I'm able to choose and refer to the agent that I feel will best represent the client.  If I don't get referrals back than I'll stop referring to that agent.  It's my job to build my referral network and build the relationships that will refer to me.

I have found many real estate agents to be extremely arogant and I won't work with those people - it's their loss.

....as a Home Stager, this is something that I struggle with....as far as being able to give referrals to Realtors. We get a good deal of business from Realtors, and of course we would like to return the favor by referring people to them......  but the problem is....Most of our clients already have a Realtor (hence the referral from them)  -- and honestly.........I seldom get asked for Realtor referrals (though I always ask Sellers that don't have their houses listed yet if they need a referral....) - And if I DO get a request..........where does my loyalty lie when we have so many Realtors that we worked with and bring us business?  I feel bad about this, but then I just have to take comfort in the fact that we help them get their listings looking great and sold in less time.

To be honest, I'm not sure I get it. The ONLY reason I EVER refer someone is because I believe the person I am referring them to, will do a good job for my client. I don't do this to receive referrals in return, or gifts or anything else. If they do a good job for my client then I am extremely happy. That should be the end of it or am I missing something?

Maybe we are just lucky, but in our agency referrals are NOT a one way street. Many of our clients come to us through referrals.

I am a Loan guy that does not get many buyers or Sellers asking if I know a Realtor either.  I have helped Realtors get more business however.  Now the odd thing.  I do not get Realtors giving me business in return. 

For the most part a Loan officer does not go to find a buyer or seller but a Loan.  We have a different method and clients base.  Now If I partner with a Realtor I would he;p them get business.  I am more than happy to do this.  I have been able to get into FSBO, some investors, and more. 

I think it is about a Realtor and Loan Officer sitting down and talking to see how they can help each other get more business.  Make both people money.  If I had one Realtor that would close 3 to 5 deal a month I would only work with that one Realtor, and they would get all my business.

I have a question for you.  If you have a database with that many people that listened to you on the referrals then what are you doing with them now?  You have gold.

Make them put their money where their mouth is by helping advertise with you and paying part. Make them responsible for helping you. Remind them that you can use someone else if you do not see more your way and move on.

The folks that you refer to a REALTOR® do not have to be a client.  They can be anyone in your own SOI!

Dave you put it best.  It's about building relationships.

Susan - you can't make anybody do anything.  If a realtor insists that I were to help them with their advertising there would have to be a return on investment. 

The first thing that I was told when I entered the industry is that all Real Estate Agents care about is what's in it for me.  Successful businesses are built on relationships and relationships go both ways.

Hi Fred:  Nice post!  I agree with you.  It's often a one-way street.  It's true we loan originators get more than we give back although, lately, I've found a lot of realtors haven't been able to refer because the buyer is already working with someone.  With that in mind, I always try and bring value-added to any realtor I know.  That could be in the form of market updates, etc. that I feel could help them do their business better. Obviously, I always ask the question "are you working with a realtor"?  Sometimes first-time homebuyers aren't if they've just decided to purchase.  Most realtors I know do not necessarily expect referrals.  First and foremost, they expect any transaction they bring my way to go smoothly.  I'm proud to say it almost always does.  And if I can refer a client to a realtor, I will call them.  As they say in BNI "givers gain!"  Have a  great weekend!

Paul

Fred, I agree with John's comment.  The nature of the business puts us on the top of the food chain.

Maybe it's time for us to treat it as a one way street and stop expecting loan officers, termite companies, appraisers, title officers, home inspectors, etc. to refer business to us.

Maybe we start looking to other referral partners that may know of a possible listing before it goes on the market.  Painters, handymen, roofers, pool guys, gardeners, Storage facilities, truck rentals, etc.

Those industries get the "word on the street" before a home goes up for sale.

Just a thought...

I do not mind not getting their referrals .Just as we can not tell our buyers who to go to.It is safe to give 3 names and they can choose who they want to go to. But if my buyer goes the loan officer I do not like the officer qualifying them and then giving them the name of another agent. But my buyers were loyal and told me about it.

Well, I am a loan officer that would like to answer a different way.  Loan officers have a unique relationship with their partner agents and should be doing more than the status quo.

It is true, their are obstacles to loan offers finding customers interested buying homes. HOWEVER-  I do have some suggestions that assist me in being better able to keep and develop those reciprocal relationships.

Loan officers reading this, we need to do these things.

• Think and act more like a real estate agent. 
  
• Be more visible, wear your name tag at the store.  Let people know what you do.
• When purchasing leads( And most of us all have at one time or another)  Add a blend of purchase leads as well as refi
• Walk your neighborhoods.  Agents do, why not us?
• Take initiative, promote first time buyer seminars, do open houses, verify your supportive agents are on your web page under "preferred professionals"

I agree that the whole business is about relationships. I have worked very hard to build a reciprocal relationship with me lender. Therefore, we do exchange referrals and are very happy doing business together.

You are so right.  Lenders are knocking down our doors right now in hopes of getting referrals but in my 16+ years I have never gotten a referral from a Lender, Title Rep etc.  I did recently get a referral from an attorney.  I think lenders are afraid of handing out leads because the many agents who don't get them will get upset and not refer them future business.  Whereas, when we refer lenders, the others  that didn't get the loan just work harder to get our business.  I don't know if it will ever be possible to do what you are suggesting because of our different roles...but it would be nice!

I have wondered why this is as well.  Though I have had a few buyers referred to me by mortgage people as well.  I get suspicious though because in every case the buyer was a very special needs case, and in every case turned out to need a extreme amount of attention which OK, I can understand but I cannot dump all my time into on person and still hope to eat at the end of the month.

At the other end of the spectrum, I used to deal with this one mortgage person who owned a small mortgage company and was selling her home.  She listed the home with my broker of the time (A person who was born with a silver spoon in his mouth and was incredibly lazy when it came to servicing his listings).  I ended up doing 4 different open houses at her house, I did the updating of her, I did much of the advertising of her home, and she new that.  After 3 months of her home not selling, mainly because it was over priced, she pulled the listing from my broker and listed it with someone at another company at the price I had been telling her all along that it should be at.  Did not even interview me or let me know she was doing it or anything.  Of course at the new price it sold right away, without any effort by this other broker.

I was so PO'd that I never referred any other business to her.  What she did was not right at all.

This is why ActiveRain is so good... I can actually "audition" the lenders here.

I've always just expected that my lender partners will treat my clients with kid gloves and make me look great.  But I have to say-the lender who used me to purchase his home?  He gets the most leads (and frankly does a fantastic job).  I really appreciated that he saw our relationship as a two-way street.  Doesn't mean that I think I should get everything-I know he has other Realtor clients as well-but I should get a shot once in a while.  I like the comment above that said lenders might want to think like Realtors.

At the bottom, I meant to say, if you ( Mortgage lenders and brokers ) do not support your partners, they will leave you.  thanks Leigh!

Wow, so many great responses. Thanks to all for your great insights.

Jeff, thanks for pointing out, that we are all salespeople and that it is all of our responsibilities to generate new business. 

Gita, very interesting insight on having many lenders and service providers to recommend to clients so they can choose which is best. 

It seems that most of you agree that the agents are on top of the food chain, are we really?

The one piece that I saw that was missing here is how I am developing my relationships.  I run a mortgage counseling ministry. 

I invite realtors to attend my mortgage counseling workshops.  Several evenings a month I run workshops where we counsel potential homeowners, people looking to refi, people looking to be more educated, people who are in trouble and looking for info that might help, etc.  I ask realtors to attend in the hopes that they can bring some of their expertise to the table too.  It is a great place to make contacts with potential buyers and sellers for them. At the same time I get to build a relationship and best of all, the realtor gets to learn more about what I do.

These workshops are great, if anyone is interested in what we do, and how we do it you can email me.
Nichole - nichole@help2buyhomes.com

Fred, great post, tons of great info out there!

I can say that in general I see Realtors providing more leads than they receive in general (definitely my case).  What can you do?

I'm not surprised.  The cost of a home is such that most folks prefer to keep their personal business to themselves.  With the exception of an agent's personal sphere of past clients, most agents rely on personal promotion and advertising to sell their services. 

Wow.  I am floored by this blog.  Completely floored.  I have lenders that I barely even know sending buyers to us.  I have always felt guilty for not being able to return the favor because most people already have a lender in mind when coming to work with me. 

I really enjoyed this.  It made me realize that I really need to do something nice for these guys that send me business.  I mean, more than just a simple thank you.  Thank you for sharing.

I refer to agents all the time, especially ones that flow from the tree of their referrals to me. 

I have been a mortgage originator for 10yrs and I have to agree with most here that the opportunity for a mortgage broker to refer buyers to realtors are few and far between.  When a buyer contacts a mortgage originator they are most likely already working with an agent.  I've had this discussion with my realtor partners and they seem to agree that what they are looking for in a mortgage lender is someone who is going to take care of their clients and make sure the transaction goes smoothly.  Believe me I would love to have the opportunity to reciprocate a referral more often but unfortunately it doesnt happen that way.  I try to make up for this by providing marketing materials and doing some joint advertising.

I know precisely where my clients come from - their referral tree. That means I can make certain to refer these people appropriately - rewarding the source be that person one, two three or more steps back. My wife is a Realtor - when I have the chance to work on a cold call or with someone who has spotted my advertising, I have choice. If the prospect/client has come through my BNI Chapter then it is my BNI Realtor who gets the referral. Simple, honoiurable and reliable.

As for the number I get - I've referred many, many people to my non-Realtor contacts but calls for a Realtor are few.

I have been fortunate to have loan officers who send me clients. And I certainly appreciate it!

If REALTORS want referrals from loan officers, the key is to build relationships with them. Loan officers do run into buyers sometimes and need to refer them out to REALTORS.

I most definitely believe that the relationship should be a reciprocal one and that loan officers should be actively seeking to find their own clients--who they can then refer out. Who better to begin the discussion with a potential buyer than a loan officer? After all, they're the ones who can educate on how much a Buyer can afford to buy.

While I have educated myself about mortgages, I'm sure a loan officer knows even more than I do as a REALTOR. (If s/he doesn't, then there's definitely a problem!) :-)

Great post Fred ---

What I would like to know is how do you get so many comments on your posts? I must be your picture????

Good luck with your business venture. I am very interested and will be monitoring it closely ............ thanking for taking your time on a Saturday night explaining your product

Fred:  I think all mutually rewarding ventures must be, by definition, two-way streets.  I have usually found that many one-way streets... often end up... "dead end" streets.

Fred, I think referrals should be a two way street but most people are not very conscientious of how to seize upon referral moments because they have never really understood the power of referring people to people you trust.  It can be a wonderful thing and I think it is sad to see so many short sighted people.

Give them a referral and they love you till the business they are doing is done then all is forgotten.  They do not recall how many times you kept your ears open for their benefit.

I think some of this depends directly on how the loan officer runs his business.  If they spend all their marketing resources talking to agents to get their referrals, it stands to reason that they are not going to have leads to pass to everyone.  I have multiple loan officers that want my business and they usually report that they just to not get many unattached leads. 

 I will say that sometimes just having a loan officer keep a prospect attached to you is worth more than a random lead.  It is important to know that a loan officer will talk to a prospect that your referred and say great things about you.

Television, internet, newspapers, magazines, all are means for the lending institutions to solicit clients. I know I put out homebuyer guides stressing the buyer get pre-approval before going out home shopping. I am sure many of you do the same. So when I hear that most buyers usually have a REALTOR prior to seeking loan information is not as accurate as it once was. As one writer above said, lenders can advertise their services just as an agent would, 1st time homebuyer seminars etc, are great referral databases.

Fred, I've never seen the favor returned and neither has my broker.  It seems like a one way street to me.

Fred,very insightful. Yes, most Realtors are on a one-way street. We feed quite a few and if not reciprocated the dead end street and closed sign may be more of what we see down the line. The Paranas are out...

Congrats on your feature!

Thanks Gena, and thanks to everyone else who continues to comment on this blog.  It's obvious that there are soooo many different opinions on this subject.  Keep em coming.