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Building Referral Relationships with Local Realtors

Dec 7, 2021

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Referrals are a key component for any mortgage broker’s business. But getting them from local realtors can be a challenge.

Many of us have seen other service providers give a gift for a referral, such as a coffee card or other sort of gift certificate. But federal regulations prevent realtors from accepting any gifts for referrals to mortgage brokers. (For more on gifting rules for realtors, see this summary of RESPA rules.)

Instead of offering gifts, the best way to get referrals from mortgage brokers is to build ongoing relationships. Here are some good ways to do that.

Partner in Charitable and Community Events

Sponsorships for local events can be expensive. This makes it hard for realtors and mortgage brokers running small offices to afford most sponsorship tiers. Splitting the cost with a realtor can help lower those out-of-pocket costs and give you a friendly partner to help out with the tasks involved with sponsorships, such as staffing a booth or table.

To stay within RESPA regulations, be clear on how you will share the expenses. Discuss the amount of prominence each will receive. For example, if the realtor uses about three-quarters of the value of the sponsorship, then the realtor would need to cover 75 percent of the expenses. You, as the broker, would chip in 25 percent.

Share the Cost of Ad Space

Advertising is another potentially large expense. However, you can lower the cost by sharing space with a realtor you often work with. As with sponsorships, you should divide the cost based on each participants’ prominence in the ad. For example, if both you and the realtor include a similar-sized photo and text of similar length, a 50-50 split of the ad cost would make sense.

Not sure where to advertise? Local coupon magazines and news websites might be good options to start.

Offer Training to Potential Buyers

Many groups of potential buyers can benefit from training to prepare them for the home buying process. They also look at what empty nesters or homebuyers relocating need to know. You want to see how you and a realtor can partner to offer training to help those buyers become informed and prepared. You also want to showcase your high level of industry and market knowledge.

Host Walking or Van Tours of Neighborhoods

Many home improvement and real estate companies partner for “street of dreams” tours. People can see some of the most well-appointed or aspirational homes in their areas. You can be a part of putting those on if sponsorships are available.

But also look at other types of neighborhood tours that you and a local realtor could work together to present. Up-and-coming neighborhoods, those with great gardens, or neighborhoods with many local businesses within walking distance could be a fun new type of tour. Also, consider neighborhoods with condos and multifamily dwellings that could be interesting to tour.

Look for Other Ways to Meet and Support Realtors

You should also consider sponsoring educational and other events you know realtors will attend. You can be there in person and hand out notepads, pens, and other items with your contact information. You will meet even more local realtors and others involved in home buying in your real estate market. The more people you know, the more networking and referral opportunities you have.

Finally, make sure you’re also giving referrals to your network of realtors when it makes sense. Referral relationships are partnerships.