Should Property Managers offer referral bonuses?

Question

I am a property manager in Destin, FL. Real estate sales have kind become slow this year. This has a direct impact on how much I can grow my business. I had been debating offering a referral bonus to realtors for a while, not being sure of its success. Finally, ended up offering it recently, it has not yielded any results thus far. I am now wondering the efficacy of a referral bonus. Question to realtors, what are your thoughts on this matter? I heard some realtors say that they want to make sure that their customers do not have a bad experience more importantly than receiving a bonus.

Ryan Moyer · Answer

I am not a realtor but this is a much healthier relationship. I have a few realtors that recommend me regularly and they would not take a referral bonus even if I offered one. They have made it clear to me that they refer to me because they are comfortable/confident that I will take good care of the client which reflects better back on them, keeping their reputation strong and earning them real estate referrals from the client if they end up happy with the whole experience (which is much more valuable to them than a few hundred bucks from me).

Drew Sygit · Answer

@Kumar R. just offering a referral fee won't get you much.

It's just a cherry on top whatever cake you've been making in your market!

Kumar R. · Answer

@Andrew Steffens yup, that was the thought process. I will give it some more time to see if any realtors start picking it up.

@Nathan Gesner Agree, that's unwritten understanding that we will refer back the client to the same realtor.

I will let the referral program run a little longer and see where it lands in a few months from now. At which point I can make a more data driven decision.

Kumar R. · Answer

Thank you all for sounding off!! Really appreciate the inputs!!

Danny Gonzalez · Answer

I run a PM company in Birmingham with 300+ doors.  Yes, paying a referral fee to an agent is a great way to increase door count.  We pay $250 for each door that signs on with us.  We'd gladly do this all day because we charge the leasing fee and automatically in the black, plus our clients stay with us on average 3.5 years so there ROI on that $250 is easily 10X.  See it was an investment into the business.   If you have your operations dialed in, you're going to be quickly make a profit on that referral.

Collin Hays · Answer

We have never offered real estate professionals a bonus because we didn't feel good about it, but we have offered referral bonuses to our homeowner clients from time to time.

Sarah Kensinger · Answer

I've heard in some states it's illegal to give referrals to realtors that are monetary, including gift cards. But you can give a "gift" like a gift basket, local specialty item, etc. But as was already pointed out, many don't want a referral fee but are more concerned with recommending a good company to their clients.

Kumar R. · Answer

:-) We manage 2000 properties nationwide. Guess I am trying to get personal opinions from realtors given the current times.

Garrett Brown · Answer

Your reputation is everything to start, and the referral bonus is the added fuel. I am a realtor who also manages properties, and I would send clients your way if I knew you were going to give them stellar results.

Bud Gaffney · Answer

Yes.

Should Property Managers offer referral bonuses?

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