Providing value and making relationships with local professionals is vital when you're in real estate. If you're considering building a lead-generating real estate vendor referral service, but don't know where to start, read on
Value. It’s the hottest trend in the real estate industry. Although the practice isn’t exactly new, the labels “value-added” and “value proposition” are concepts unheard of in the industry in decades past.
For the new agent, “Value-added is the additional features or economic value that a company adds to its products and services before offering them to customers,” according to Investopedia.com.
An example of this would be a company “… offering a year of free tech support on a new computer …” (Investopedia).
In real estate, a value-added feature might be the advanced skills an agent brings to the process (provided they are impressive) or by providing any number of additional services, free.
While not a new idea, offering a real estate vendor referral service or a concierge service is one way to set yourself apart while offering true value to your clients, past and present.
“Dallas brokerage Real Estate Concierges [now Mile 27 Realty] is floating a new business model, touting its lifetime real estate consulting services as its core value to clients,” according to Paul Hageman in a 2015 blog post at Inman.com.
The folks at Mile 27 have dubbed their service “After Care” and it includes, among other services, “A network of trusted contractors, tax attorneys, competitive insurance partners and more.”
The benefits of this service for clients is obvious. But the value you add to your services benefits your business in a number of ways. With that in mind, here’s how to set up your real estate vendor referral service.
It’s better than a knife set
Or a champagne gift basket for that matter. The whole idea that a professional real estate agent feels the need to gift a client simply for doing his/her job is mind boggling.
Yes, the reasons some agents give closing gifts is that they believe it will help them remain top-of-mind with their clients. Yet, time and again, agents learn that former clients Joe and Mary used another agent years down the line when it was time to sell the home.
The two best ways to earn a permanent place in your former clients’ hippocampus is to provide exceptional customer service and then consistent follow-up over the years.
Don’t just say that you “… go above and beyond,” but do it. Observe your clients so you understand their needs at any given moment, keep the lines of communication wide open and be their go-to resource for any and everything having to do with their new home.
How to put together a real estate vendor referral service list
Whether you call them vendors or affiliates, the people on your list should be many and varied.
Oh, and highly vetted, which we’ll discuss later.
Let’s take a look at some of the vendors you might want to include on your list:
Luxury services for your real estate vendor referral service
If you’re just starting a real estate vendor referral service, you’ll need to do some research in your quest to figure out who to include. Start at yelp.com, read reviews and jot down the names of those you want to interview.
Join your neighborhood at NextDoor.com. One of the main topics of conversation on the platform is “Who do you recommend for [insert the service].”
In fact, if you enter any service into the search bar at the top of the page, you’ll find every conversation having to do with it. You’ll notice that certain service people are recommended over and over. Put these people on your ‘to-interview’ list.
Finally, ask for recommendations for your real estate vendor referral service from colleagues, family members and friends.
Once you’ve compiled a list of names, move on to the Better Business Bureau to check for complaints.
Then, ensure that the vendors you’ll interview are licensed and bonded by consulting the appropriate state licensing board’s website.
This step is very important. “… the Realtor is not responsible for the work of a properly licensed contractor, or pest inspector for that matter. When a Realtor calls a licensed professional they are doing so only in their capacity as a representative of their client,” according to Tim Jones at DailyRepublic.com.
Still, consider putting a disclaimer in writing on your website.
Now, you’re ready to interview each candidate. Don’t forget to ask for references. Get the references’ phone numbers and contact each one.
Avoid RESPA violations when building your real estate vendor referral service
“RESPA [Real Estate Settlement Procedures Act] prohibits a real estate broker or agent from receiving a ‘thing of value’ for referring business to a settlement service provider, or SSP, such as a mortgage banker, mortgage broker, title company, or title agent,” according to the NAR.
In Section 8(a), RESPA states that “… no person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.”
In other words, don’t make any financial deals with the vendors.
In fact, include an additional disclaimer, of sorts, on your lists. “We do not require a fee to be on our preferred vendor list. Instead, we require a proven track record of customer satisfaction,” is one we found online.
Then, cover your hiney further by stating, in writing, that these are merely recommendations and that it is the client’s responsibility “… to review vendors and select one that best fits their needs,” according to the experts at CRES.com.
They conclude that agents should advise their clients to “… review additional options to find the right fit.”
In addition, since you’ll no doubt have settlement service providers on your list, consider carefully what you’ll name the list.
“I think the term ‘preferred’ has become a minefield,” Ken Trepeta, president and executive director of the Real Estate Services Providers Council Inc. (RESPRO) tells Amy Tankersley at Inman.com.
“Do not designate a settlement service provider as the broker’s or agent’s ‘preferred’ company,” he concludes.
A wise move is to include more than one title settlement service company, mortgage broker, lender, title and/or escrow agent on your list.
Marketing your concierge services
Naturally, you’ll want to include information about your value-added services front and center on your real estate website, share it on social media and in emails and direct mail, but there are other ways to get the word out as well.
The Harling Team in Colorado Springs includes a simple list on its website. View it at harlingrealestate.com.
An Etsy seller is marketing an attractive vendor template that’s easy to replicate yourself at Canva.com.
Another brilliant way to market and share your list is with a custom, branded app (for iOS and Android), marketed by ClientLinkt. Check out the 30-day free trial at clientlinkt.com.
Maintaining your real estate vendor referral service
Due diligence; it’s not just for homebuyers.
And, it doesn’t end with vetting your vendors. After all, these people are a reflection of your professionalism. Consistently monitoring their level of customer service is vital.
If you don’t have the time to check in with your clients to whom you’ve referred vendors, hire someone to do it for you. The feedback you receive may just save you from losing a former client.
Don’t be disheartened with negative feedback, it is invaluable. It offers you the opportunity to speak with the vendor and get his or her side of the story. It also gives you a chance to wow your client (or former client) with your customer service.
If you come away with any doubts about keeping a vendor, get rid of him or her. Sounds brutal, I know, but it’s necessary.
“Firing” someone is even more challenging if you have a personal relationship with them. Regardless of how you feel about someone personally, don’t allow them to sully your professional reputation.
Just as you should never stop following up with previous clients, we urge you to perform monthly or quarterly check-ins with your vendors as well.
Exceptional customer service is the best closing gift you can give and a concierge service or real estate vendor referral service is a value-added service that keeps on giving.
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