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Agents missing out on referral charge income
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Estate agents are missing out on potentially substantial incomes by failing to charge for referrals of their clients to financial advisors, lawyers and other groups, according to a research from the FBA.
An investigation involving 166 estate agencies indicates a culture of free referrals leads to 62% of agents not receiving a single penny for the referrals that they make. 18% said that they had not attempted to raise income in this manner.
Research
The FBA is a company that operates a platform for fee-based referrals between agents, lawyers and others. Results from the research show that the culture of a good deed for a god deed may have worked previously, but is now holding the sector back.
A spokesman for the company stated, ‘the lack of trust is particularly concerning in a world where transparency and fairness are all-important. Estate agents who believe that they should only refer cases to people they know and trust, or those that rely on reciprocal agreements, may not be doing their clients any favours. The referral networks that some estate agents and property professionals have formed over the years may not give clients access to the best professional advice.’
Continuing, the spokesman said, ‘ the rapid growth in popularity of consumer websites for property buyers and sellers is creating an unprecedented level of competition in the sector and is causing significant disruption to estate agencies. The lack of awareness around alternative ways of working is adding to the problem and is indicative of a knowledge gap that is preventing estate agents from increasing their revenue through new money-making techniques.’
Agents missing out on referral charge income
Fees
Agents have a range of potential fee-generating referral systems open to them, according to the FBA. These include:
- Reward-based referrals-This could involve receiving a cash reward or commission for client work that is referred to anther advisor
- Referral agreements-Some estate agents have signed deals with specialist providers in order to secure additional advice to meet consumer demand
- Using online open market platforms-This could allow agents and advisors to upload details of work to entice other registered members to bid for the lead.
