Luxury Portfolio International

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• Referral from November 15, 2013
  

  Leslie E. asked:

  Are corporate relocation companies like Sirva and Cartus obsolete? What about the "consortiums" like Leading RE and Realty Alliance for broker to broker referrals? At a time when clients vet agents and brokers through multiple internet channel, what value is there in these additional layers of cost and administration?

  

  Pam O. replied:

  Leslie and all, relocation management companies (RMC's or "third party companies) still administer most corporate transferee moves, including a lot more than real estate (tax gross-up/expense management, household goods move, temp housing, global expat services, group move management, spouse job search, etc.). While home buy-outs have declined, a main reason RMC's are involved isn't to assign the referral to an agent but rather, to administer a two-transaction process (Buyer Value Option or BVO) that saves the corporate client a great deal in taxes they would otherwise incur to keep the employee whole. That's the short explanation :). Nowadays most corporations pay little or no service fees to RMC's, so the RMC revenue is mostly from referral fees. A lot more at play here than is apparent to most agents, but the bottom line s that these companies are not going away, and while there are definitely problems with many of them, they do perform services that are beyond what the individual real estate agent can provide. Strong agents who cultivate this business and perform well do benefit from repeat and volume corporate business.....and the spin-off/residual business from those transferees' connections, often with no referral fees. Broker-to-broker referrals are another type of opportunity...'retail' versus 'institutional' business, and there is an art to this as well. Our network, Leading Real Estate Companies of the World (LeadingRE) is a leader in this space, with about 30 k referrals a year all the way up to $50M transactions and consistently high conversion rates. Yes, there are many options for placing referrals today given the Internet, but many involve an agent handing off a client to another agent who may or may not be a good fit, hoping for the best, and then assuming they'll get paid if a closing results. We use relocation department professionals to match agents to clients, with the referring agent in control to interview and sign off. The service includes relocation personnel following up and re-assigning if necessary, trouble-shooting, performing area orientation services to support the agent, and always collecting the fee on behalf of that referring agent. While our network offers many other programs (Institute online education, LuxuryPortfolio.com<http://LuxuryPortfolio.com> high end marketing, agent networking conferences, marketing tools, etc), lead generation/referrals are still a core competency in which we take a lot of pride. One of our agents emailed us recently about a $40 k referral fee he received on a referral he placed through LeadingRE after meeting the other agent at our conference last year. Our closed referrals were up about 10%in 2012, so even though there are other ways to refer clients, many agents don't think about referrals unless they are in a network that continually reminds them of this great way to assist family and friends coming from/going anywhere with an introduction to another great agent, for which you are willing to be accountable for good results. As many of us plan our business for 2013, broker-to-broker referrals are still a great way to be a true anywhere/anytime full-service agent and to generate significant incremental income from beyond your marketplace without a lot of effort. Sorry for the long answer but I think we often overlook these traditional people to people opportunities. Happy New Year, all! Sent from my iPad

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