Do you want to know how you can build a passive income real estate empire with just your real estate license without having to invest in properties, sell houses, or risk your own money?
Becoming a real estate referral agent is one of the best ways to build a passive income real estate business in the real estate industry if you have a real estate license. All you need is an active real estate license, a marketing strategy to reach real estate client leads, and a big network of real estate agents around the world that you can refer business to!
In this article, we will discuss how to become a referral agent, what they do, and why it is such a great opportunity to build a passive income real estate business with just your real estate license.
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What is a real estate referral agent?
A referral real estate agent is someone who refers potential home buyers and sellers to real estate agents. They work with clients to identify their needs and then refer them to the best real estate agent for their situation.
A referral agent earns a referral fee from the agent’s commission if and when that client turns into a closed transaction.
Real estate referral agent duties
A real estate referral agent work with clients to identify what they are looking for and then refer them to the best real estate agent or “active agent” to help them complete the real estate transaction.
This can be either with potential home buyers or sellers.
Once the referral agent has explained their referral service to their prospective buyer or seller client, they will then refer the real estate services of one of their partner agents (a full service agent) who will help the client hands on.
A referral real estate agent’s main job is to generate an abundance of leads to give out to real estate agents. The number one skill a referral real estate agent need is real estate lead generation skills, whether if it’s through paid ads, social media, or other means.
The referral real estate agent typically does not work with the client after the real estate referrals has been made.
Referral agents also need to build relationships with different real estate agents in order to be successful. They also need to have a good understanding of the real estate market and how referral fees work.
Why become a real estate referral agent?
There are many benefits of becoming a referral agent. Referral agents typically earn a referral fee when they refer a client to an agent. This referral fee is typically a percentage of the commission that the agent earns from the sale.
There are many reasons why you should become a referral real estate agent, but the most important reason is that it is a great way to build a passive income real estate business with just your real estate license which is an unique opportunity in your real estate career.
All you need is an active real estate license and a lead generation strategy so you can generate leads and reach potential clients.
You can earn referral fees from real estate closings, without having to actually go through the sales process that a typical real estate agent must go through!
Another great reason is that it allows you to be your own boss and set your own hours. Because you do not have to go on showings, conduct listing presentations, host open houses, or show up at the closing table, a real estate referral only agent has much more time freedom in their business than the typical realtor.
That is why running a successful real estate referral business is considered a passive income stream.
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How to Become a Referral Real Estate Agent?
So, how do you become a real estate referral agent?
In the United States, you must be a licensed real estate agent in order to become a referral real estate agent. That is because you are only eligible to receive a real estate referral fee if you hold an active real estate license in one of the 50 states.
The process of getting a real estate license varies by state.
You will typically need to complete some training, pass a state-issued exam, then hold your license with a sponsoring real estate brokerage. Once you are licensed and sponsored by a brokerage, you can start referring clients to agents and receive referral fees.
Benefits of being a referral real estate agent
A licensed real estate agent in one state can refer business to an agent who holds a real estate license in another state to receive a referral fee.
This means that referral real estate agents can earn referral fees from real estate closings in all 50 states with just one real estate license!
It is an extremely important fact that not many referral real estate agents know. As a referral real estate agent, it is crucial for your business and income that you tap into more than just your local market for clients and agents.
Because you are able to receive referral fees from closings in any state in the U.S. as a licensed agent, it is wise for referral real estate agents to generate leads in the hottest real estate markets in the country, rather than solely focusing on their local market.
For example, if you hold a real estate license in the state of Nebraska, instead of only connecting with clients and real estate agents in your home state, it would be more beneficial for your business to target more active real estate markets around the country such as Florida, Texas, or California.
Since you are able to receive referral fees from closings in any state, and referral fees are based on a percentage of the commission earned from a home sale, you are financially incentivized to target and generate business in more expensive real estate markets.
The average referral fee is 25% of the referred agent’s commission. Usually the referring agent will send a referral form requesting “outbound referrals” to the broker of record of the referred agent stating the referral commission the wish to receive and who the prospective clients are and then all parties will sign the agreement to solidify the referral.
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Choosing the Perfect Referral Real Estate Brokerage
In order to receive referral fees from real estate transactions, you must be sponsored by a brokerage and hold an active real estate license in one of the 50 states.
When you become a referral real estate agent, you are essentially becoming a business partner with a real estate brokerage. Successful real estate referral agents can help bring their brokerage a lot of business when those referral transaction closes so do not undervalue your worth as a referral agent!
Because you are entering into a partnership with a brokerage, it is important that you choose the right one for your business.
Here are some things to consider when choosing the perfect referral real estate brokerage:
-The size of the company: You want to choose a referral brokerage that is large enough to have plenty of agents to refer business to, by choosing to be sponsored by a large company you will already have a huge network of agents to send referrals to.
-The company’s reputation: Make sure to research the referral brokerage’s reputation before making a decision. You want to make sure you are partnering with a company that has a good reputation in the industry.
-The company’s commission structure: Most real estate brokerages will take a percentage of the referral fee that you earn, so it is important to understand how the referral brokerage you are considering charges its referral real estate agents.
-The services offered by the brokerage: Find out what type of services the referral brokerage offers its agents. Some brokerages offer more leads and marketing support than others. Choose a referral brokerage that offers the services that you need to grow your business.
-Benefits and growth opportunities: Most real estate brokerages offer the same array of benefits and opportunities such as a real estate website, CRM, agent portal, training, etc. But in recent years, many innovative real estate brokerages have exploded onto the scene with groundbreaking benefits and opportunities for agents that the industry has never seen before such as health care plans, metaverse technology, opportunities to acquire equity in the company, and a duplication real estate agent referral model that incentivizes exponential growth.
-Does the Company Require You to Join a Board With the National Association of Realtors: Many referral real estate agents don’t know this but as a referral real estate agent you do not have to join a Realtor Board or pay MLS fees or nar dues because you are only receiving a referral fee as a portion of the commission paid at closing. This means you do not have to do any of the actual contractual or paperwork associated with a real estate transaction!
A New Opportunity for Referral Real Estate Agents
Now that you understand the benefits of running a real estate referral business and have learned how you can build a passive income real estate empire with just your real estate license, I want to share with you a new opportunity for agents and real estate professionals with an active license who are looking to run a real estate referral business.
As we mentioned previously, there have been real estate brokerages in recent years that have changed the way real estate agents are being compensated through technology.
These real estate brokerages are commonly referred to by agents as cloud-based real estate companies because they operate 100% online.
Cloud-based real estate brokerages have eradicated the need for brick and mortar offices through implementing technology, therefore eliminating costly overhead operating expenses.
This has allowed the brokerage to redistribute their revenue back to the agents in order to incentivize the agents to help grow the company through a re-imagined referral process called revenue share, a built in referral agent program at eXp Realty.
Revenue share is a new real estate agent referral business model that allows real estate agents at the brokerage to add a duplication component to their real estate referral business, which allows them to grow their referral network and therefore their income, exponentially.
Many top agents as well as real estate referral agents have taken advantages of this opportunity in recent years and for good reason! It is allowing both full time agents and referral associates to build a self-sustaining and self-growing (that’s the best part!) real estate empire!
Want to Build a Global Real Estate Referral Empire so You Can Replace and Surpass Your Sales Income With Referral Income? Click Below to learn more about how you can take advantage of this opportunity!
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