I've had several situations where people have reached out to me to help them find a home or sell their home, but they are looking or buy/sell out of my area, per say. Working in the north and northwest Chicago suburbs, I’ve talked to people looking to buy in Wisconsin or in the city of Chicago (or south of it). Unfortunately, I’m not licensed in Wisconsin, and I don’t live in the city; there are some legal and logistical deterrents respectively that prevent me from working with those people. In these situations I cannot truly be their agent—sometimes by choice, other times legal restrictions. Every state has their respective real estate licensing process and laws. An agent must be licensed in the state where the sale/purchase will occur in order to represent the client. Furthermore, the actual job responsibilities and common practices may differ from state to state. Sometimes agents don’t know enough about the area or cannot get to the area fast/often enough to truly provide the appropriate level of service, as in my case with the city of Chicago. There is a solution to these "out of area" situations, but little do most people know that an agent can refer clients to another agent. Let’s talk about how this can be an advantage to the clients and the agents involved. We'll go over why you choose an agent, how this looks from the agents’ point of view, and how it looks for the client. Why
You reached out to a particular agent for a reason. Maybe they’re “the family agent”, maybe your friend used them and recommended them, maybe it’s the stats you like… i.e. number of sales, years of experience, etc. Whatever the reason, it boils down to trust. People choose an agent because [insert reason here], and therefore, they trust them. Trust is a big factor. Even though it’s unethical and most likely goes against any state’s license laws, there are many opportunities for agents put their own interests above their client’s interests. I'm sure there's already a level of skepticism for any type of sales jobs, add a really expensive product and someone who you've never met before... oh, and this is your first time buying or selling... you'll instinctively be skeptical. Unethical and untrustworthy agents (and people for that matter) are far too common, which is why trust and ethics should be one of the more valued attributes you seek in finding an agent. There is a harsh truth that you know already, but I must share with you: There are a lot of honest, ethical, and trustworthy people who still suck at things. So even though trust is a very key attribute for an agent to possess, you still need to try to find one that is ALSO good at what they do. Once you find a good agent, realizing that this trustworthy and awesome agent cannot help you with your out of area purchase or sale, can be a real bummer. This may not come as a surprise to some, but more of an assumption. Sometimes clients assume that an agent living in Illinois cannot possible help them buy a home in another state, legally or practically. However, there IS a way to put that same awesome trustworthy agent into your corner.
[...] if your agent is truly awesome and trustworthy, then they will try and help every way they can.
The Agents’ POV
Basically, an agent can refer you to another agent. This is not complicated at the core, but as things develop it may be trickier or awkward. The awesome and trustworthy agent is going refer you, as a lead, to another agent that CAN legally and practically help you for a % of the commission. If you’re not sure how commission works read my post about how your agent does or doesn’t get paid, HERE. From the referring agent’s point of view, they’re going to get a paycheck at some point in the future, and they won’t have to do anything except wield a few phone calls—this is well worth it. From the receiving agent’s point of view, this is normal. There are costs for lead generation no matter the source; sometimes it’s a monthly fee that can cost several hundred dollars per month per zip code, and other times is a % of the commission—20%-30% typically. Getting 70% of something instead of 100% of nothing is well worth it for them too. Not only does the agent receiving the referral get a new client and the majority of the commission, there’s an incentive to treat you well; if they do well with you, then your awesome and trustworthy agent may continue to refer clients to that same receiving agent in future--of course, visa versa applies as well.
Going back to the referring agent for second, the awesome and trustworthy one. You may think this is a cop-out way for an agent to get paid and do no work. You're not wrong, it is possible for them to hand you off, and pretty much disappear. It's also possible for them to be very involved in the process. You may have to be the one to tap into that resource that's available to you, but if your agent is truly awesome and trustworthy, then they will try to help every way they can.
The Client’s Side
As a client, after you are referred to another agent, it's important to go back to your original agent with any issues. Whether your original agent likes it or not, they are eventually going to get paid, therefore they have a vested interest in your situation and need to be sure you are being treated fairly, with respect, and with a high level of service. Not only are they getting paid, but if they leave you hanging with a terrible agent, you may start to doubt how awesome they were to begin with... the agent doesn't want their reputation tarnished. It's very important for the you to have an open line of communication with the agent that referred you. I like to think of the clients that I’m referring out as a treasure of some sort. Any agent who doesn’t think of them in the same way doesn’t deserve to represent them, nor should they get paid for it. Because the incentives for both agents lead to helping the client, the client should essentially have 2 agents working for them.
One way your original agent can help is when the referred agent is not doing their job correctly. Luckily, the referring agent can handle all the awkward conversations. Sometimes the receiving agent may not be as great as the original agent thought, but often times there's a personality clash between the client and the receiving agent; sometimes people just don't get along. The referring agent and the client can make the decision to technically fire the first agent and find another agent that will be a better fit. Firing someone is a very awkward situation and most people will simply deal with a bad agent instead of having the awkward conversation. In this case, you'll have your original trustworthy awesome agent to do your dirty work. Agents understand the inner workings of the agency relationship laws, and have experience communicating with other agents anyway, so this really isn't as big of a deal... and remember, your awesome trustworthy agent is probably just as dissatisfied that you weren't happy with the referred agent as you are. Sometimes the managing broker will get involved, and again it would be important for an agent to communicate in that instance.
...2 professional opinions throughout your home buying/selling process can really help minimize your stress.
Another way that your original agent can help, and probably the most valuable, is with advice and a second opinion. Often times clients question the motives of agents. Sound advice can be misconstrued as pressure or pushy. In these situations you can find peace of mind by getting reassurance from your original agent, after all they are trustworthy and awesome remember? Sometimes things aren't so black and white. There are different ways to approach things such as price valuations, negotiation positions, strategy, etc. This is when you get 2 points of view before you decide what to do. Getting 2 professional opinions throughout your home buying/selling process can really help minimize your stress. You'll feel more confident about the decisions you're making as well.
When you decide to buy or sell, you can get reach out to an agent that you know and/or trust, no matter where they’re licensed, and they can refer you to another agent. This gives you the advantage of having 2 real estate agents to help you through the process. You'll be able to use them to do any dirty work amongst attorneys, agents, lenders, etc. but also to get an unbiased second opinion. It's a nice way to help support a preferred agent if they are "out of area" for where you are/are going; most agents are more than happy to take and make a few phone calls in return for a good reputation and a good chunk of commission.
Remember too! That if you're not in the market now, you can inform friends and family of this information so that they can take advantage of double agent help. As always, please connect with me on my social media profiles, and reach out if I can help you or someone you know, wherever they may be!
Thank you for reading! Comments and questions welcome!