- The Washington Times - Thursday, January 19, 2006

At an online real estate discussion group, the question came up, and I’ve heard it before: Is it bad to take a referral for my mortgage broker from a real estate agent?

The quick answer is no.

When it comes to the real estate industry in a local area, it’s a pretty small community. Agents, lenders, various inspectors, insurance professionals and home warranty providers all know each other — very well, I might add. Keep in mind that in the seven years since you purchased your last house — the average time between home purchases — they have worked together on dozens, if not scores, of transactions.

The vendors might even have sponsored the agents’ Christmas party or gone to their children’s soccer games. So, yes, they know each other, probably even like each other, just like you know and like the vendors who work with you in your business.

If you didn’t get to know your vendors or you found out you didn’t like them, would you want to do business with them? A recent industry survey revealed that 42 percent of all buyers already knew their agent before they used them. That’s a good thing. Building relationships builds business. That’s one of the first business-building principles in any endeavor. Just like you chose your agent because you or someone you knew trusted him, most agents select ancillary service providers the same way.

So here are five reasons why an agent likes to encircle him or herself with loan officers, insurance providers and inspectors they know and use over and over again.

• They like to use people they know. Familiarity is a good thing. If they know who they’re working with, they are confident they can approach the vendor with problems in the transaction.

m Agents can hold them accountable. If the home inspector doesn’t find an item that obviously was defective, the agent will not be shy to approach that person and file a complaint, peg him at their next meeting, go to his boss — whatever it takes to get it solved. This is, of course, assuming you have a direct, assertive agent working for you.

m Using the same people gets a business rhythm going. When you’ve worked with the same fix-it guy, you know his style, his timing, his professionalism. You know that if he hasn’t returned the call in a couple hours, he did get the call from you and that he will call you soon. You know the mortgage broker is going to be upfront with you and with your clients. Most important, you know you will get the job done.

• Business is referral and referral is business. These residual service providers are part of the Realtor’s referral network. While federal laws prevent agents from receiving gifts of monetary value from these providers for their referrals, the referral is still legal, encouraged and sought after. In real estate, the referral is more secure than any other lead in a transaction. By working with a tight circle of professional service providers, the agent will receive referrals and feel comfortable sending out referrals to this network.

m Friends like to work with friends. Hopefully, your agent isn’t letting friendship cloud his judgment in referring business; however, it’s pretty common that friends like to work with their friends. If my clients and customers are going to need services, I’m going to refer them to someone who is good at what he does and who, hopefully, is a nice person. I’ve never heard a referral like this: “He’s a good loan officer, but I can’t stand him. Here, use him.” Most agents and mortgage brokers who refer business to each other actually like each other. The main reason I find they like each other is because they bend over backward to get the job done.

M. Anthony Carr has written about real estate since 1989. He is the author of “Real Estate Investing Made Simple.” Post questions or comments at his Web log (https://commonsenserealestate.blogspot.com).

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide