United States
Hong KongBuilding a referral pipeline
Referrals come from people who meet buyers before you do: estate agents, builders, financial advisers and past clients. RESPA Section 8 governs what you may give in return, and the answer is nothing of value for the referral itself.
The pipeline is the job. Everything else is execution.
Who sends business
- Estate agents, who meet buyers before a lender does
- Builders, who need financing for their own sales
- Financial advisers and accountants advising on a purchase
- Past clients, who refinance and refer
- Your existing network from whatever you did before
That last one is why career changers often start faster than people who have been in mortgages for years at a firm that provided leads.
The rule that governs all of it
RESPA Section 8 prohibits giving or accepting anything of value for the referral of settlement service business, at 12 USC 2607.
Anything of value is broad on purpose. Not just cash, but tickets, trips, meals beyond the ordinary, or marketing paid for by someone who benefits from your referrals.
At a reasonable market rate, for something genuinely delivered. Half the rent on a desk you do not use is not a service. Co-marketing where you pay more than your share of the exposure is not either, and this is where enforcement action tends to land.
What works and is lawful
Being useful. Answering the phone. Closing on time. Explaining a decline in a way that lets the agent keep the client.
Agents refer to originators who make them look good to their own clients. That is a service and it costs nothing prohibited.
Past clients
The cheapest source of future business and the one most often neglected. Keep records, stay in contact, and be the person they think of when a friend asks.
Note the Do Not Call rules apply: eighteen months after a transaction, three months after an inquiry, and an internal do-not-call request stands indefinitely.
Common questions
Where do mortgage referrals come from?
Estate agents, builders, financial advisers, past clients and your own prior network.
Can I pay for referrals?
No. RESPA Section 8 prohibits giving anything of value for the referral of settlement service business.
What can I pay for?
A service actually performed, at a reasonable market rate. Sham arrangements dressed as services are where enforcement lands.
How long can I call a past client?
Eighteen months after a transaction and three months after an inquiry, unless they have asked not to be called.
What makes agents refer to an originator?
Responsiveness, closing on time, and handling problems in a way that protects the agent's relationship with their client.