Agent-to-agent referrals are a foundational piece of the real estate industry. Back in January we released “The Real Estate Referral Economy” – a study on the power of real estate referrals, conducted in partnership with the Council of Residential Specialists (CRS). We surveyed 1,400+ top-performing agents nationwide to learn more about the impact of referrals on their business. The result is a deep dive into referrals, their value, the methods used to make or take successful referrals, and more.
Key findings from the report include:
- Referrals aren’t purely important to agents for their monetary value. Many agents’ primary concern when referring out business is maintaining the reputation they’ve worked to establish with current and past clients.
- The close rate of a typical referral, whether inbound or outbound, hovered around 50% for the majority of respondents.
- Outbound referrals, according to this study, make up a median of 12.5% of total transactions per agent per year. The majority of respondents (75%) make $10,000 or less annually by referring business to other agents.
- Over half (58%) of outbound referrals are generated from past or current clients. The rest come from a combination of family and friends, other agents, referrals companies, and raw leads.
- Most respondents expect to receive 25% of the total commission when they refer out and prefer to pay around 25% when they receive a referral.
- Nearly 40% of inbound referrals come from the agent’s sphere with a majority of those coming from past or current clients. Another 40% of inbound referrals come from other agents.
The level of engagement in the agent-to-agent Referral Economy described in this study can be viewed as aspirational for agents in the early stages of their careers. It can take years in the business and many of successful transactions — building a solid reputation — before most agents will fully enter this segment of the economy and can then depend on it as a somewhat steady source of income.
Download our new report, “The Real Estate Referral Economy” for a full look.