Business referral in real estate
Often unknown, this mechanism is based on a simple and win-win model. It allows anyone with a good network or useful contacts to play a key role in a real estate transaction, without having to become a real estate agent. Let’s explore together what this really means, and how it works in reality.
What is a business referral in real estate?
A business referral is a connection. Nothing more, nothing less. Specifically, a person (the referrer) informs a real estate professional (agent, developer, investor…) about a property for sale or a potential client. If this connection leads to a sale or a signed assignment, then the referrer receives a commission, agreed upon in advance in a contract.
It is a one-time collaboration. The referrer does not take part in the negotiation or in managing the sale. They simply play the role of a “contact provider.”
Who can be a business referrer?
What makes this system strong is that it is open to everyone. It is not necessary to have real estate training or a professional license, provided that the activity is not carried out on a regular basis.
Here are a few examples:
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A tradesperson working in private homes who learns that a property is going to be sold.
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A broker who meets clients looking for housing.
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A well-connected individual who knows sellers even before their property is on the market.
In all these cases, the person can offer to connect the seller with an agency or a professional, and earn a commission if the sale goes through.
How does it work in practice?
It all starts with a conversation. You know someone who is selling, you talk to a real estate agency with whom you have an agreement, and you sign a business referral contract. This contract defines:
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Who is involved
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What you are bringing (name of a seller, a buyer…)
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How much you will be paid in case of success
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Under what conditions the payment is made (for example, only if the sale is completed)
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How long the contract is valid
It’s a fairly simple process, but it must be formalized in writing to avoid any ambiguity.
What kind of remuneration can be expected?
The remuneration varies depending on the property and the agency you are working with. In general, we speak of 5 to 10% of the commission received by the professional, or a flat fee negotiated in advance.
For example:
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You refer an apartment that is sold through the agency: it receives €8,000 in commission, you receive €400 to €800.
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You bring in a piece of land that leads to a subdivision project: the remuneration can be much higher depending on the financial stakes of the project.
What are the advantages of this system?
For the referrer:
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It’s a source of additional income without taking risks.
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You make the most of your personal or professional network.
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You position yourself as a trusted partner in your local ecosystem.
For the real estate professional:
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It provides access to qualified properties or clients, sometimes even before they are on the market.
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It’s a considerable time saver in prospecting.
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It’s a flexible model: payment only if the sale is concluded.
What should be avoided
Like any collaboration, a few precautions are necessary:
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Never operate without a contract.
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Don’t promise more than you can deliver. You are making a connection, not guaranteeing the sale.
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Don’t multiply “useless” referrals. The more serious your contacts are, the more you will be considered a true partner.
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Stay within an occasional framework if you do not have a professional license.
In conclusion
Business referral in real estate is a bit like opening a door between two worlds: your personal network, and professionals looking for new opportunities. It’s a smart way to make use of your relationships, while helping real estate projects come to life.
If you have a strong address book, a good sense of connection, or simply the desire to collaborate with trusted professionals, you probably have a role to play. And who knows, it may even become a regular activity… as long as you respect the legal framework.