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Do You Really Know Who You Are Recommending? The RISK Of A Bad Referral

real estate referrals

The Invisible Social Contract

Do you really know who you are recommending?

I don’t refer or recommend service providers anymore. At least not the way I used to. I used to be a referral MACHINE! You needed a good home warranty company – call X. You needed a good landscaper – call Y. You need a good loan officer, baby sitter, pool guy – call Z. That was before.

It all changed for me a few years ago.

Never one to shy away from controversy I want to talk about referring or recommending service providers today and I want to ask you a simple question. Do you really know who you are recommending? Recommending is really a weak word, endorsement is really more like it – because that is really what you are doing. You are endorsing, putting your name and reputation to the person or service you are recommending.

The story.

A few years ago a good client of mine {REALTOR} asked me for a referral to a loan officer. Always eager to please I perked right up and offered a name, “oh call X – he’s awesome!”.

I had just done it. I had just put my name and my reputation to this person I had just endorsed. I didn’t even think twice about it either.

48 hours later I received a text message from my client asking “do all people suck?”. Turns out, the loan officer that I recommended never bothered to call my client back. Not even an attempt. It pissed me off. I had just stuck my neck out there and recommended this dude and he can’t even pick up the damn phone? Really? I wrote a post about it on Active Rain appropriately titled “Do All People Suck?” which turned into a heated topic of its own.

When referrals go wrong.

When referrals go wrong it is not the person that you referred that gets the bad rep, well it kind of is, but the person that does the referring that really gets the brunt of the grief. And many people don’t even know it. Their relationship, business or personal, has likely been negatively impacted and many have no clue.

“He’s An Asshole”

About 18 months ago, my wife was starting an online business. Which meant she needed a credit card processor. I mentioned it to a business associate who said to call a guy, I will call “Bill”. I didn’t bother to look around, I just called “Bill”, nothing stronger than a referral from a friend or business associate right? My wife wanted to look around and I encouraged her to go with “Bill”. Fast forward 18 months and like many online businesses, this one has failed.

When my wife went to cancel the credit card processing she found out this guy “Bill”, the guy my business associate recommended, the guy I unwittingly endorsed – locked her into a 3 year contract. Not only did he go for the max on the contact, we came to find out that he slammed her into the highest fee’s e Processing had seen in a while {that’s what their customer service rep said}. Pissed is an understatement. “He’s an asshole” is what my wife says constantly when discussing “Bill”.

“Bill’s” service was horrible from the onset, he was awkward and bazaar looking and not someone I would have ever done business with had it not been for the recommendation, referral, endorsement of my business associate. Strangely, I don’t blame myself as much as I blame by business associate. It had originally  called his character into question because he did business with someone like “Bill”. And he didn’t even know it. So, my wife is stuck in this contract, stuck paying monthly service fees {minimums} for a company that no longer exists. Every month, without fail, $X is deducted from her business account to pay the contract and every month she can’t help to remind me of what an asshole “Bill” is. How she should of found someone on her own and let me tell you – it’s not fun. I get to hear about this bad referral pretty much every month. :-(

I Say NOTHING

Luckily I was able to correct the bad referral I gave my client. Luckily. But it taught me a valuable lesson. Be careful who I refer. Endorse. Recommend. Receiving a bad referral was a real eye opener for me as well. I still have people I know and kind of know ask if I know a good ….. and I say NOTHING. It’s just not worth it. Any benefit someone would receive if I refer them is offset by the blow back I could receive if the referral goes bad.

Perception Vs Reality

The referral doesn’t need to go bad in reality either. It only has to be perceived to. I talked to a lady about 3 months ago. She, like so many other Phoenix homeowners was losing her home to foreclosure. Her sister, who I’ll call “Norma” recommended a real estate agent to help her through the short sale process – to avoid foreclosure.  By the time the agent was referred a trustee sale date was already scheduled. There was not much the agent could do. She was brought into the equation too late in the process. I knew that. Anyone who knows the process knows that. But Norma’s sister doesn’t believe that. She believed it was the agent’s fault. The real estate agent that “Norma” referred. It caused a strife in their family dynamic. Norma’s sister lost her home to foreclosure and true the the American motto “It’s not my fault” she blames her sister.

Will You Recommend Me?

I routinely get solicited to write a recommendation for real estate agents on Linkedin and Stik.com that I  have never worked with. I politely decline or say nothing. I have no problem telling anyone and everyone how awesome the real estate agents I have bought or sold a property with are, but I would have actually had to work with them. Yet – I see recommendations flying on Linkedin or Stick.com that are a disaster waiting to happen. They are recommending each other for the sake of recommending or referring each other. It’s funny. Even better, because they have really not ever hired each other or experienced the true level of service the agent, loan offer or title person offers – the recommendations are EPICALLY vague – that any benefit the agent would receive is negated by the risk the other agent, title person, loan officer etc writing the referral is taking.

Takeaway

My parents taught me a long time ago that “you are who you associate with, If you hang out with drug dealers, people will think you are a drug dealer as well”. The people you refer are an extension of you regardless of what you think. If a referral goes bad it could not just come back to haunt you but your BUSINESS as well. There is nothing wrong with referring people just make sure you are managing the risk associated with it. I know I do. I wonder how many consumers hear their friends and family say things like “I need a bigger place” or “I wish I could buy a home” and don’t refer a real estate agent or loan offer. If someone refers you, please – please, for the love of puppies and unicorns – realize the possible blow back the referrer could receive and LIVE UP TO THE HYPE. Remember, the #1 complaint in real estate sales is “lack of communication”. Pick up the damn phone.

Have you ever given or received a bad referral? Tell me about it below.

 

Stephen

Hi I'm Stephen Garner, I'm just a guy in the title industry {in Phoenix} trying to change how real estate agents market themselves and their services. To that end, I teach my clients HOW TO leverage sales technologies like WordPress, Content, Video, Camtasia, Final Cut X, iMovie and indexable IDX solutions to convey value and help your ideal client find you online when they are most interested in learning about you and your services. I work for escrows. Hire me!

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