Experienced realtors know that housing markets ebb and flow––even in a traditionally booming market like the Orlando area. Before a house goes on the market, most investment property realtors may sense that the timing is off to list it. And until they see more favorable conditions, they may recommend clients rent out a house using property managers instead of landlording the property themselves.
With their reputation on the line, investment property realtors will only refer clients to reliable companies that will take care of them. Realtor referral programs help realtors do right by their clients, while earning finder’s fees to supplement sales commissions.
The Realtor-Client Relationship
Realtors usually form special relationships with their clients. After all, homeowners trust them with buying or selling possibly the most expensive items in their lives: their homes. Realtors recount the stories about a house’s history to potential buyers. They learn exactly what a buyer wants in a house and help them locate their perfect property.
They celebrate successful closings and share the owner’s disappointment during setbacks. But often renting out a home may hold more financial advantages over selling it. Recommending a homeowner not sell a house shows the realtor’s level of respect for his or her clients and profession. In a highly interpersonal field like real estate, having a reputation as an ethical agent is priceless.
Referring a House to a Property Manager
Professional realtors know their clients the best. They know their motivations for buying or selling and how quickly they want to complete deals. Buyer preferences change and seller expectations may need managing. Sometimes, clients drag their feet in getting a house ready for market, too. Or they get antsy if a listed house doesn’t get bites as quickly as they’d like.
Suggesting a homeowner consider renting out a house instead of selling it requires trust:
- Trust that the homeowners respect their advice
- Trust that the property management firm relationship will ultimately benefit their clients
- Trust that their client will return in the future when selling makes more financial sense
By building relationships with specific property management professionals, realtors can feel confident referring clients to them.
Realtor Referral Programs
Many property management companies offer a variety of referral programs for licensed professional realtors. The programs give realtors further incentive to work with one company over another. They vary in finder fee rates and reciprocity, but ultimately, they should benefit all parties. Realtors should beware of any referral fees from property managers when the owners prepare to sell. Also, the Real Estate Settlement Procedures Act (RESPA) limited who can receive referral fees to prevent illegal and abusive practices. As such, only licensed professionals can accept finder fees; unlicensed realtors do not qualify for this benefit.
As the highest rated property management company in central Florida, The Realty Medics can help your clients!
TRM guarantees low management fees for them and generous finder fees to realtors. We’ll pay realtors $500 per door after the owners sign a management agreement, and we receive the first month’s rent. When the owner wants to sell, TRM gives the property back to the realtor, never charging a reverse referral fee. (That’s gross.) We also provide the best referral fees in town for rental tenants, portfolios of homes, and property management accounts.