Hawaii Randy's Real Estate Opinions: REALTORS® Giving Vender Referrals

REALTORS® Giving Vender Referrals

Referral AgentThis topic comes up regularly.  How do you decide on venders like home inspectors or loan officers to give your clients?

The most common school of thought among agents I have spoken to over the last few years is to give a list to your clients.  I have such a list and freely share it with clients.  In a recent regional meeting of the Honolulu Board of REALTORS®, the attorney for our Board said that giving a list may not minimize your exposure to potential future law suits.  He said that whether you refer one or ten names to your client, if something goes bad you may be on the hook.   By giving more names you may actually be increasing your odds of trouble.  I may be better to give a referral with just one name you trust completely than a few names of people you are not as sure of.

You better trust and have faith in the person or people you refer them to.  As a business decision I try to work with a least three different venders in each category id possible.  That gives me the ability to have someone who we can trust if the other one is not available or if they and the client do not hit it off. 

In the case of loan officers, some loan officers are great for certain types of loans and some are better at others.  For example I do a lot of transactions with VA financing and gravitate towards those who also specialize in that direction.  My favorite home inspector gives a military discount and is one of the best I have met.

I have read a few posts and sat in with agents who say they do not give vender referrals because of the liability.  There is something to be said for that.  I on the other hand have made a business decision that in order to properly service my clients I have to take on some liability.  Hopefully by performing in a professional manner and on giving referrals to top professionals I can minimize that exposure.  After all we want all of our clients to love us.

 

Mike Janquish wrote a good blog post as a follow-up to this topic: Cary and Raleigh, NC, Real Estate: Vender Referrals. Don't we owe it to our clients to take on some Liability?

 

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Randy L. Prothero, REALTOR®

Broker-in-Charge, ABR, AHWD, CRB, CRS, e-PRO, GRI, MRP, SFR

eXp Realty

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.  His luxury home listings sell faster and for more money.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

Comment balloon 83 commentsRandy Prothero • October 24 2007 04:43PM

Comments

I give them my best vendors that will suit the clients needs. Give them the best! Why give 3-4 when one is much better and has a great track record. I am not afraid of my choices. The company I work for wants me to give the business to their affiliates. I disagree with that and truct my insticts and experience.  
Posted by Eric Bouler, Listening to your Needs ( Gardner Realtors, Licensed in La.) almost 11 years ago

Randy I agree with what you said about one "referral with just one name you trust completely that a few names of people you are not sure of."  Business is to valuable these days to pass up someone that you completely trust just for the sake of giving more choices and having them choose some one that you are not as trusting of.

I have several Realtors that I know only give my name out as their Loan Officer of choice, and because of that I jump through hoops to provide their Buyers with the best possible service that I possibly can. 

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 11 years ago

Hey Randy, though we'd stop by to visit as we've not been here for a while. We recommend vendors too, think we should and are happy to do so. Needless to say, we only recommend those we trust, and usually we think we make it clear that we're not responsible. So far, we've never been questioned on that.

Hope you have been well... 

Posted by Gary Bolen, CRS - Lake Tahoe Real Estate Information (McCall Realty) almost 11 years ago

I know what you mean about the liability but I don't understand one thing you said....because it's so NOT you....

You said....After all we want all of our clients to love us. You said "love"....what's happening to you Randy?  You always tease me about "being too emotional" and stuff. hahahahahaha.

Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) almost 11 years ago
Our company has a list to hand out. So far, I've used my own instead since I have my own preferences. But maybe I should use the company handout instead. I can let them be on the hook for the potential law suits... Or maybe I should just warn them. Darn it! I hate it when my conscience wins :P
Posted by Lisa Hill, Daytona Beach Real Estate (Florida Property Experts) almost 11 years ago
I have a vendor list of title companies, mortgage broker, banks, etc. that I HAVE WORKED WITH with good results. I also have a disclosure at the bottom that says the above, plus the buyer is free to choose any provider he wishes, and should go to the phone book for more names. 
Posted by Erica Ramus, MRE, Schuylkill County PA Real Estate (Erica Ramus - Ramus Realty Group - Pottsville, PA ) almost 11 years ago
Hi Randy - I keep a list and hand it out and try to only put people on there I trust and like, but even then sometimes the client & vendor are at odds. We can only do the best we can!
Posted by Linda Scanlan (A Fan of AR) almost 11 years ago
I hear you - I always provide a list - but with home inspectors it is tough for me - if they ask I have to tell them who I personally use...
Posted by Thesa Chambers, Principal Broker - Licensed in Oregon (Fred Real Estate Group) almost 11 years ago

Eric - I am glad my company does not have local affiliates.

George - I agree; I too jump through hoops when someone gives me a referral.

Gary - I know your clients expect you to put them together with top pros also.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Sally - It is human nature.  That is what gets some in our business in trouble.  They go out of their way to make people love them and sometimes they go too far or do things beyond their license or expertise.

Lisa - if you give out their list you are on the hook also.

Erica- I have a similar list of those I have had good success with.  I get requests from vendors who know about my list trying to get on it.  It is hard to make that list and easy to get bumped off.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Linda - It happens.  That is why it is good to have a short list so you have a back up in that case.

Thesa - That is a statement I use.  I tell them this is the loan officer that I used for my home or the home inspector I personally used.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

I recommend people who have done me a good job.

When I tried a new home inspector, I told the client, "Look, I have been wanting to see this guy in action, but haven't yet.  If you are dissatisfied in any way, I will pay for another home inspection."

That seemed fair, and we only had one inspection.

Posted by Mike Jaquish, 919-880-2769 Cary, NC, Real Estate (Realty Arts) almost 11 years ago

Randy,

I could not agree with you more about maintaining your Integrity of being a great salesman. You refer it to someone that really comes off as a superstar and when you follow up with the client they are less than happy because the agent was so busy listing that when the folks came into town hw would "fit" them in as he could accommodate them.

I recently learned this the hard way. I think if someone gives you their word, and says they are going to take care of your customers, it not only is your reputation, but also your livelihood.

Sincerely

Tom Braatz

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) almost 11 years ago
As a home inspector, I look at it a little different.  While I would love to be the sole HI referred to a client, from a pride point, from a business aspect I think it is important that agents give my name along with a couple of others.  There has been so much bad press lately about the relationship between inspectors and agents, due to a few cases, that I want to minimize any perception of not servicing my client to the best of my ability.  Just my opinion, though.
Posted by Kenneth Miller (Jordan Hill Home Services, LLC) almost 11 years ago

Randy, 

You just reminded me of why I really don't like lawyers... They (broad stroke of the brush, I know) created this litigious culture we find ourselves in, they benefited the most from it and they keep it alive and well by playing on our fear of it. Don't you love job security....

It seems like common sense that one should only refer vendors they know, have experience with and trust to do the job honestly, competently and to the best of their ability. I mean, wouldn't we do that anyway?

I would think that the unintended benefit of that practice, would be that, since you really can't predict when some schmuck is going to try and play "civil court lotto", if you do get hit with a frivolous law suit, at least you know that you've got an honest person in the foxhole with you. "Band of Brothers" as it were.. 

Posted by Tom Cunningham (Agent Support 360) almost 11 years ago

I have tried to utilize a few loan officers but for some reason they never panned out. The one across the street closed anyway.

I have worked with only a few that I would consider referring but darn if I can't get away from my "main man".  Like George said....exclusively...because he gets the job done, he is honest, he does NOT tell them what they want to hear....and he lets me know promptly because there are buyers out there that think you won't find out they can't and still want you to take them around looking. duh.

Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) almost 11 years ago

I try to only recommend vendors that have worked with successfully many times.  I will sometimes give more than one in case one referral isn't available.

Instead of handing out a list, I now have a referral website--The Smartt List--that I can easily update.  I am also soliciting referrals from my clients to post there.  Finally, I also let my vendors know that I put them on the website and regularly refer them. 

Posted by Mary Smartt, Smartt Moves with Mary Smartt (Lawton Associates / www.LawtonAssociates.com) almost 11 years ago
I have a rule of three. Three inspectors, three lenders, three contractors, and so on. I describe which situation each one excels in and the buyer takes it from there. Regarding lenders, I always ask where they bank or who did their last loan and if they are happy with the service they received in the past. If they had a good experience previously with that bank or lender, I suggest they may want to consider going back to them to get a loan.
Posted by KC Coonc, Bellingham Commercial Real Estate (Windermere Real Estate/Whatcom, Inc.) almost 11 years ago

Mike - That is a good way of testing them out.  I also check with other agents in my office and only try people they have had good luck with and recommend.

Tom B. - That is a question to ask up front.  The good agents are usually the busiest ones.

Kenneth - From a risk management point of view, it is OK to give more than one name, but you better trust all of the names you give.  It is better to give one name that you trust completely than several that are iffy.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Tom C. - The one good thing about acting in a professional manner and using only top professionals for referrals is that if someone does decide to sue, their attorney will most likely leave you alone if you look to be a tough challenge.

Sally - I have one loan officer I have been using from day one and a couple of others that I trust just as much.  It took a long time to find a couple of others to add to the list.  I had a few that were on my list and I dropped them off.

Mary - Oner of the nice things about having a small group of vendors that you refer clients to is they many times will send referrals your way.  I do not require that of vendors, but sincerely appreciate it.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
KC - I have dealt with so many bad loan officers that I hope my cleints use a trusted one.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Yeah...me too. Hey...but the die hards are the ones we stick with. WooHoo...feature!
Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) almost 11 years ago
Randy - Congrats on your big gold star!
Posted by Linda Scanlan (A Fan of AR) almost 11 years ago

Hey Randy,

I personally believe that toooo many people are afraid of being "Liable" which I think is rediculous. It doesn't matter whether you refer a customer to a vender or venders, if someone gets mad at you enough, they will find a reason to sue. It is too easy in todays climate to sue people for any reason. I do not run my business with the concern of being Liable, if I did I wouldn't have a business for very long.

Sean Allen

 

Posted by Sean Allen, International Financing Solutions (International Financing Solutions ) almost 11 years ago
Randy I almost always refer to one vender. I have worked with these folks for years and know they will do their best. My sellers are depending on me to help them so I will. There's risk in any business. That why we charge accordingly.  All of my venders are also licensed and insured. Including my handyman.
Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) almost 11 years ago
Generally I'll refer one trusted vendor rather than a list - with lenders it becomes more a case of which lenders like which types of loans. I always compare a vendor to a chef - he may have a bad night - but say that the vast majority of my clients have been happy with that vendor. To avoid recommendations out of a fear of liability is, I think, a disservice to the client. He wants to know who we would recommend.
Posted by Sharon Simms, St. Petersburg FL - CRS CIPS CLHMS RSPS (Coastal Properties Group International - Christie's International) almost 11 years ago
I have a very short list of venders...If it ain't broke, why fix it?  So since I've had great results time and time again using the same people, why take a risk by going out of my comfort zone.
Posted by Shari George (Coldwell Banker Tomlinson) almost 11 years ago
Three is the key, but the three has to be the best at what they do. And to stay on my list, put my client first
Posted by Keith Perry, REALTOR - West Metro Atlanta (Coldwell Banker) almost 11 years ago
Randy~ I stick to my list where I have approximatley three trusted vendors per category.  I advise my customer or client to interview each and decide which one they can work best with, or which one is available to do the job at hand.  I like to spread the"joy" of referrals around.
Posted by Lisa Ryan, Selling Princeton,West Windsor and Montgomery Town (Callaway Henderson Sotheby's International Realty) almost 11 years ago

Liability, shmiability. 

I'm a buyer's agent with a duty to my buyers.  I give them the best advice I can.  When someone needs a home inspector, I give them the best one I know.  The one I use myself. 

If I didn't know a good one, I'd tell them so. 

Same with lenders.  I give them the best folks I know. 

I want folks to have a good transaction and good vendors can help.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 11 years ago

Good post, Randy! Most of my clients are either out of state or are relocating here. They don't know any local inspectors, pest inspectors, structural engineers, repairmen, HVAC service people, etc., and don't have time to call around. I give them names and numbers and schedule everything myself so they don't have to bother. I don't tell them they HAVE to use these people, just tell them they are free to work with people who have done a good job for my other clients. If there are any problems or complaints, I want to know about it so we can fix them immediately.

So far, I've only had to drop a couple of people off my list, and I have a core group of professional service providers who take care of my clients to their (and my) satisfaction.

As far as loan officers, prospective buyers get complete information on my favorite mortgage broker in the first contact I make with them if they haven't already set up their financing. She prequalifies them for me, and she cleverly hired a former underwriter as her loan manager, so she can answer tough questions, too.

Cheers,

Robin

Posted by Robin Rogers, CRS, TRC, MRP - Real Estate Investment Adviser (Robin Rogers, Silverbridge Realty, San Antonio, Texas) almost 11 years ago
Our clients look to us for this information and we need to be able to provide it to them without worrying about someone suing us.  I had a buyer a few months ago that ignored the list of home inspectors and hired a cheap one from the yellow pages.  The home inspector kept us on the hook for almost 2 hours and never showed up despite multiple calls and YES I'm coming.  We picked up the phone and called one of my guys and they showed up the next day (Sunday) to save the day.  They even apologized to the buyers about their bad experience with another home inspector.  Folks take my list...please!
Posted by Cindy Jones, Pentagon, Fort Belvoir & Quantico Real Estate News (Integrity Real Estate Group) almost 11 years ago

Sally - I have a saying I go with the one who brought me to the dance.  My number one loan officer spent time with me when I first started back in the business.  Other top loan officers did not have time for me then.  Now that I am well established they are all back looking for business.

Linda- Thank you, I did not expect it.

Sean -The best way to insulate yourself from being sued is by conducting yourself in a professional manner.  There are no guarantees, but you will reduce the chances dramatically.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

I mention who I've used successfully in the past and let the consumer choose from a list.

Posted by Lori DeLoera (Century 21 Sundance) almost 11 years ago

B.B. - That is so true.  Handymen are not licensed here.  We tried to get that changed but the general contractors were against it.

Sharon - I agree completely, clients come to us as experts and expect us to put them together with vendors.

Shari - The main thing is using vendors you know and trust.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
I as well have a list of vendors.  I  place a disclaimer at the bottom of the page.  Acting as a buyers agent and using the disclosure which the buyer signs off on supposedly will help should something go wrong.  Always a good idea to call your Association legal hotline for advice.  Nice to have their adviced backed up in writing.
Posted by Debra Granite, Granite Rocks Real Estate (Re/Max Properties LTD) almost 11 years ago

Keith and Robin - I have three names on my list for most categories, but will not hesitate to give one name or two names depending on the clients needs and preferences.

Lisa - I tell my clients they don not have to use one of my vendors, but here is the name or names of people I have had good luck with.

Lenn - I tell clients that I have only one vested interest in giving them a referral and that is that they have a smooth transaction.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Robin - A good loan officer is worth their weight in gold.  I have not had a single buyer who was pre-qualified fall out because of financing in the last 4 years.  On the other hand I have had several of my listings fall out because of bad loan approvals on the other side.

Cindy - I have had very good luck with my home inspections.  I got a great one and he does most of mine.

Lori - I find if you do that they will almost always go with the people you recommend.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Debra - That is the best you can do, but you can still be sued.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Well said!  I try to match my clients with the personality of the agent I refer to in hopes that they work together well and have similar expectations  Good post.
Posted by Pete C, Hawaii Mortgage Loan and Refinance (TBA) almost 11 years ago

Pete - Thank you

Mike - This is a follow-up to Mikes blog post linked above.  Here is the comment I left on his blog post:

  • Mike I agree completely with you.  We all take on risk by getting out of bed and doing business.  I carry E&O insurance, have good auto coverage and a large blanket policy on my home.  I try to be as professional as possible at all times.  That is about all I can do.  If you want less risk, then do not go into business for yourself, get an hourly wage job.  Even then you can still be sued.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
I was always concerned about this. When we were looking for a home, we found a cute little hud house that was still in good shape. The broker we were working with, gave us a copy of the key before we owned the home and then sent over people to repair what needed to be fixed. No list....lol. Crazy!
Posted by Christy Powers, Pooler, Savannah Real Estate Agent (Keller Williams Coastal Area Partners) almost 11 years ago

It is sad that you have to be exposed to liability. Maybe the referral fees that realtors enjoy plays into it...?!?!? Certainly the lawsuit happy mentality we have contributes.

I refer people out to realtors and have not a worry in the world. Because I don't push the referral and do not receive a fee.(lenders cannot take a referral fee for referring clients... violates RESPA)

What say you, Randy? Do you think the referral fee increases the risk? Just curious. Because I refer people out all of the time and I have NEVER had this exposure discussion with any of my colleagues.

subscribing to this one.... I still feel a little in the dark on this topic.

Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) almost 11 years ago
Hi Randy, I must agree that I find it difficult to look at my clients or customers and tell them I can't help them. Seems like that would be a major part of our job. I've grown more comfortable about telling them what each inspector is like. I tell them I have no preference and can't have one due to the laws and potential liability but I recommend they look into two or three possibilities and to go with whom they feel comfortable. I give them the list. After working with a large number of inspectors over the years you can indeed tell which is thorough and which is skating the system. My list only includes the professionals I would want to inspect my own potential home. We can end up being liable for most anything in this business. It seems to me we could become more liable if we didn't assist our clients in such a large step of the buying process. Thanks for the article. Debra A Brooks
Posted by Deb Brooks (Brooks Prime Properties Wichita Falls Texas) almost 11 years ago

There are two kinds of referrals, the vendors that I've used personally and can recommend and the ones who others I trust have used or whose work I've seen.  If a client asks you for the name of a good building inspector or attorney or mortgage broker, how can you say you can't make a recommendation?  We work with these professionals all the time.  We know the good, the bad, and the ugly.  I do try to be sure that the vendor has expertise in the area that my client needs.  I wouldn't recommend a mortgage broker who primarily does residential loans to my investor clients, for example. 

When it comes to painters, plumbers, electricians etc. it becomes more difficult.  I think most people can get recommendations from friends that are as good or better than the recommendations I can give them.  I've had painters who did a great job on my own house and then a terrible job on a client's house.  I think this is the area where you are likely to run into liability issues, not with recommending a mortgage broker, attorney, or building inspector.  

Posted by Gail Robinson, CRS, GRI, e-PRO Fairfield County, CT (William Raveis Real Estate) almost 11 years ago

Randy,

Congratulations on the star!  Referrals come back in spades when the vendor you're referring is a known entity.  My experience?  Real estate agents give out three cards for a lender referral because they want the client to make a choice.  That's not a real referral.  When I refer a REALTOR, I hand the client one card, and say "Tucson has nearly 7,000 real estate agents.  I'm sure most are reliable, but a person I know, trust and do business with is ___________________.  May I call her/him and introduce the two of you?"  It takes trust to refer one vendor at a time.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 11 years ago

Does your doctor give you a list of medicines and tell you to pick one??

I believe as professionals we have an obligation to select the best vendors for our clients based on past successful performance.

I think that by recommending one person with a proven track record it probably lessens your liability because things are more apt to go right than wrong.

Posted by Jim Lee, Portsmouth NH Realtor, Portsmouth, NH (RE/MAX Shoreline) almost 11 years ago
Randy, congratulations on the gold star!  At some point, a person is on the hook no matter what.  Lets say you do not recommend anyone.  They find someone on their own and have a bad experience, they come back at you for not recommending someone.  I agree that you should take on some liability. I usually say, "I have had clients in the past and they used .... and they had a good experience."  Some companies have a "preferred vendor list" at a company level.  To get on that "list" the vendor has to pay a "marketing fee" - I believe this is where things can go really south.
Posted by David Matney, Omaha, NE Real Estate | Omaha, NE Homes For Sale (BHHS - Ambassador Real Estate) almost 11 years ago
I refer certain vendors, mostly 3 inspectors and 3-4 lenders, 3 handy men. If they are in a hurray I say, "use this one". To me that is what full service means, we help our clients through the entire transaction.
Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) almost 11 years ago

Randy.  I've been reading the comments and there appears to be some discomfort or confusion over the matter of vendor referral fees??  Uncomfortable, questioning the practice???   Geez.  DON'T TAKE REFERRAL FEES FROM VENDORS.  Want some risk, take referral fees.  I can't think of anything that compromises an agent's position vis a vis a client buyer or seller as taking a referral fee from a vendor. 

Sorry.  I don't want to hijack this post, but I don't want to write a post about this either.  I'd wear my CAPS out. 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 11 years ago
Excellent post!  In todays world of happy people trying to make a buck by sueing you, you better have a tight network group that you trust!
Posted by Scot Thrapp (Coastal Palmetto Realty ) almost 11 years ago
I agree with Lenn.  Accepting a referral fee from a vendor is business suicide!
Posted by Eric Kodner, Wayzata Lakes Realty: Twin Cities, Madeline Island (Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes) almost 11 years ago

Christy - I would not give the key before it records or there is an early occupancy agreement.  If it doesn't record the agent just ate the repairs.

Tom - I am not sure that a referral fee changes anything.  That would be a great question for a creative lawyer.

Debra - I agree with the statement you made that we may be more liable if we don't give them the referrals.  Lawsuits normally come when the transaction has problems.  A good referral may head off many problems.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Gail - Good points, I get a lot of clients from other areas.  They do not have friends in the area and depend completely on me for contractor referrals etc.  Being a referral from me, normally helps put a little more obligation on the contractor to satisfy the client (and me).

Mike - You are right that is a referral.

Jim -  That was the point the attorney made to our group.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

David - I would never except and money for being on a list.  You are right, now they have created a big conflict of interest.

Missy - I am getting ready to roll out a premium service where I send out vendors to prepare the home for sale.  I guess I will be taking on even more liability.

Lenn - I agree completely.  I was approached by a termite inspector who paid agents a fee for referrals.  They called it something else.  That inspector will never be on my list.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Scot - Even if it weren't such a lawsuit happy society; I would still give referrals for vendors the same way.  It is about customer service.  If done right they will refer you to one of their friends or family.

Eric - I would never accept a fee from a vendor.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
It depends. Some clients insist on multiple names and so then you are in a position that if you given them what they ask for you end up giving names of trades you might not typically use.
Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) almost 11 years ago

I did a blog about agents and/or offices taking a fee from inspectors.  What some offices do is to charge the inspector a fee to place their brochures in the office for customers to choose from.  They justify this by saying the inspectors are buying advertising to have access to the agents.  It's violates the NACHI and ASHI Code of Ethics, and for good reason.  They call it vaious things - Preferred Vendor Programs, Preferred Provider Programs etc.  In my opinion, it's pure bribery, and should be against any CoE.

 

Posted by Kenneth Miller (Jordan Hill Home Services, LLC) almost 11 years ago

This is easy.

Find a vendor who will take care of your client.

Refer him or her.

Take satisfaction from a job well done.

Leave the kickback for the criminal element...

Posted by Mike Jaquish, 919-880-2769 Cary, NC, Real Estate (Realty Arts) almost 11 years ago
I give three, after asking if they have a preferred vendor.  A lot of my people have been coming in pre-approved, so I'm not giving alternate lenders unless they ask. 
Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) almost 11 years ago

Bob & Carolin - I let them know what my experience has been or not been with them in that case.

Kenneth - I agree completely.  it is definitely against my person Code of Ethics.

Mike - You are right it is simple.

 

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
lane - if they already have a lender than they do not need a referral.  I did have a client who came in with a pre-qual for a VA loan recently.  The lender was a company who I knew did not do VA.  They were going to sub another type of loan.  In the end the client went to another loan officer and found they were not qualified for the amount either.  I guess that loan officer will not be getting any referrals from me.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Yeah....if they saw how you dance (your last response to me) they wouldn't go with you!  Hahaha...didn't you say you embarrassed Darnelle with your John Travolta moves?
Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) almost 11 years ago
Generaly when it comes to refering vendors, i disclose to my clients that they have a right to choose who ever they want.  However, i tell them that over the years, i have worked with many people and have narrowed down the list to a couple that i have consistently received terrific service with.  
Posted by Joshua Talayka (Chase Internatinonal) almost 11 years ago

Sally - Don't let my wife read this, I am sure she will have something to say about my dancing.  LOL

Joshua - That seems sensible.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Randy I agree with giving the list of referrals. You might have a stronger opinion in some areas like a lender but ultimately it is their choice not yours. You can say you recommend but that they don't have to agree with your recomendation. Maybe that's your out.
Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 11 years ago
Wow, good post and comments.  I usually do give 3 names when asked for referrals.  Our office DOES NOT promote any person or business over another.  Their performance is what brings them to the top of the list, or off the list if that is the case.
Posted by Georgie Hunter R(S) 58089, Maui Real Estate sales and lifestyle info (Hawai'i Life Real Estate Brokers) almost 11 years ago
I was taught this year in a GRI class (I believe thats where I heard it) to give the names of three venders..I am going to stick with that.
Posted by Kim Carpenter, Lake Winnipesaukee REALTOR -Lake Winnipesaukee Real Estate, NH (Coldwell Banker) almost 11 years ago

Gary - It is always their choice, but many/ most times they look to us because they do not have a good vendor.

Georgina - It is easy to fall off my list than to get on it.  If I send a referral, I want to know they will take care of my client and make me look good.

Kim - The attorney who spoke at our Association meeting is the same guy who teaches our GRI class.  He did not have a problem with the list of three names.  His point is that it does not necessarily remove liability by giving three names instead of one good one.  In some cases it may increase liability.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Hi Randy - I know the school of thought from most companies is to give 3 names.  I disagree with that, and have for a long time.

If I have first-hand experience with a certain vendor, that's the name I'm giving.  If I trust a certain vendor or vendors, those names I'm glad and happy to recommend.  But if I don't have 3 to give, I will not give 3, especially if I don't have first-hand experience with them.

If I use them, or would use them, on my own properties, then they would be on my list - plain and simple.

Ann

Posted by Ann Cummings, Portsmouth NH Real Estate Preferrable Agent (RE/MAX Shoreline - NH and Maine) almost 11 years ago
Ann - I have tried out vendors on my own before I give them to a client also.  I feel safer that way.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Hi, Randy:

As far as great loan officers being worth their weight in gold (or caviar): I don't know if other agents do this, but on my listings, even if the buyer's financing seems solid, I suggest they contact my favorite loan officer to see if they can get a better program or close sooner.

Always worth a shot!

Cheers,

Robin

Posted by Robin Rogers, CRS, TRC, MRP - Real Estate Investment Adviser (Robin Rogers, Silverbridge Realty, San Antonio, Texas) almost 11 years ago
Robin - I haven't done that.  I have only sugeested that to a buyer's agent when they came in with a questionable loan letter.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
There is risk in everything!  I usually just give a few names and let them choose...
Posted by Joyce Heffner-Williams, Owner/Broker/EcoBroker - Monument Real Estate (Keller Williams Clients' Choice Realty) almost 11 years ago
Troy - There is always risk.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Great post Randy. I've been struggling with this a lot lately. I haven't had issues but I'm concerned none the less. I have an inspector who does a great job but he belongs to a BNI group. Does that mean I have to worry about who he gives referrals to?
Posted by Dena Stevens, Putting The Real Into Realtor Since 2004 (Rocky Mountain Realty ) almost 11 years ago
Dena - I would ask him.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Dena,

I can't say about BNI, but I belong to a group.  We are encouraged to refer people in our chapter, but we are also encouraged to sit down with that person to meet with them to get a handle on the business, who they are looking for leads, etc.  I know I won't refer anyone from my chapter or group that I wouldn't use myself.  I may not be typical, but that seems to be the consensus in my chapter about reffering work to other members.  But, as Randy said, talk to him about it.  If he is straight up, he should have no problem sitting down with you to discuss it.

Posted by Kenneth Miller (Jordan Hill Home Services, LLC) almost 11 years ago
Kenneth - I think that is so important.  If you wouldn't use them yourself, you should never, ever refer someone else to them.  Good litmus test.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

The comments about BNI groups caught my attention. My very good friend, a construction/remodeling contractor, belongs to one. He refers his business to the Realtor in the group, even though I refer prospects to him and recommend him. The inspector I work with most of the time belongs to a different BNI group. He refers prospective clients to me, although not many. He depends on my business more than the remodeling contractor does, so it's a different relationship.

If you're referring business to someone and not getting much back, it might be worth talking to them to see if you can work something out. On the one hand, they may not consider that you NEED any more business, and on the other, there is a lot of pressure in BNI groups to come up with referrals for other members at every meeting.

Too bad we can't just buy referrals. :) That's another blog topic.

Cheers,

Robin

Posted by Robin Rogers, CRS, TRC, MRP - Real Estate Investment Adviser (Robin Rogers, Silverbridge Realty, San Antonio, Texas) almost 11 years ago
Robin - I don't think I would feel comfortable being part of on of those groups if I was expected to give referrals to someone I do have complete faith in or would use myself.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Hi, Randy:

I'm with you on the referral thing. I refer business to my colleagues in the industry only because I'm confident they will do a great job for my clients. I would feel uneasy otherwise. I didn't join my inspector's BNI group, although I was invited, for that reason (also because they have their breakfast meetings at 7:30--forget that!).

Cheers,

Robin

Posted by Robin Rogers, CRS, TRC, MRP - Real Estate Investment Adviser (Robin Rogers, Silverbridge Realty, San Antonio, Texas) almost 11 years ago
Robin - Thank you for sharing you insights.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

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