SAN FRANCISCO--(BUSINESS WIRE)--Real estate agents around the country continue to benefit from the referral economy within the industry. The third-annual study from ReferralExchange, the leading referral network for real estate agents in the U.S. found that referral fee earnings were strong in 2018, with some agents earning more than past years. The number of agents earning between $20,000 and $50,000 in referral fees increased to 20% last year from 17% in 2017. The number of agents earning between $10,000 and $20,000 in referral fees decreased to 17% from 25% the previous year.
The study shows that the number of agent-to-agent referrals received remained steady in 2018 from 2017. In 2018, 25% of agents received between 6-10 referrals, and another 19% of agents received between 11-25 referrals last year.
The study queried 1,200 agents around the country to discover how real estate referrals contribute to their businesses. A referral is defined as someone who is ready to act compared to a lead which is often not yet qualified. Agents find that referrals are highly valuable in building their businesses.
Referral networks are important for agents looking to benefit from referral business and refer to others. The study showed that the majority of agents surveyed belong to a referral network. A total of 29% of these agents attributed more than a fifth of their overall inbound referrals received to these networks. Most importantly, 23% said that more than 20% of the referrals they receive from their networks result in a closed transaction.
“Each year, this study provides us with a snapshot of how agents and brokers are connected all across the country, providing reliable referrals for their clients,” said Scott Olsen, CEO of ReferralExchange. “These agents place a high value in the overall experience that agent provides their referred clients.”
“Referrals are one of the key drivers of business in the real estate industry. If an agent can’t assist a client in buying or selling, a solid referral is crucial. Experienced agents rely on referral networks to provide additional resources for the clients they work with,” said Olsen.
In 2018, ReferralExchange created over 250,000 referral connections around the United States, up nearly 14% from 2017. The vast majority of agents in the network have more than 14 years experience and have had 20 real estate transactions in the last 12 months.
The study includes interviews with agents who have used referrals to grow their businesses. Mike Montpetit with Town & Country Realty, a boutique real estate firm owner and operator for the past 19 years, says that 2019 is going to be his year of growth, and he relies on referrals because “you can’t survive on just past clients alone if you want to grow.”
“What agents value most in their referral partners is responsiveness and a great reputation,” adds Lisa Fettner, VP of Marketing for ReferralExchange. “Referral networks play an important role in the real estate ecosystem by ensuring that clients are always matched with an experienced agent with local expertise and a commitment to customer care.”
The full results of the survey are available as a downloadable white paper at www.referralexchange.com.
Methodology
Over 1,200 agents responded to our queries, completing an online survey that contained multiple-choice questions. We then followed up with selected long-term, high-producing agents, interviewing them by phone about their survey responses. 1000watt, real estate’s leading brand and marketing agency, conducted this research.
About ReferralExchange
ReferralExchange is an agent-to-agent referral and lead-generation management service. The company uses a combination of data science and customer service to refer active home buyers and sellers to qualified real estate agents. The company made over 250,000 successful connections between buyers, sellers, and agents in 2018 and their network includes 25,000 top-performing agents covering 100% of the United States. The vast majority of agents have more than 14 years experience, more than $5 million in sales, and have had 20 real estate transactions in the last 12 months. In 2019, ReferralExchange launched its new LIVE service, which manages third-party leads for agents by filtering, qualifying and live-transferring back interested prospects.