Entry by Jennifer Allan

Quid Pro Quo? Oh, No!


Mollie's on my mailing list, so when she got this email from me this morning, she asked me to post it here! Enjoy!

Dear SWS'ers,

A few months ago, I got a phone call from a fellow real estate trainer-type who had a wonderful opportunity for me.

Apparently a bunch of trainers were getting together to cross-promote each other's products. If I were to sign up, I would agree to send out a newsletter to my (precious) mailing list recommending the other participants' products. So, say, in November, I'd tell you all about Joe Schmo's FSBO-Gettin' Package, and encourage you to buy it. If you do, I get 25% of your purchase. Then in December, I'd send out another newsletter raving about Jane Schmane's SEO Program and encourage you to buy it. If you do, I get 25% of your purchase. And so on.

By being in the program, I have to agree to do this for every one of the other members of the program, whether or not I actually know anything about their product. Of course, they'll be doing the same for me.

So... I'm supposed to commit to abuse my mailing list and risk losing subscribers to promote products I know nothing about just so I can make a few bucks and help other trainers add to their mailing lists?

You've got to be kidding me. Uh, no. Not gonna happen. I'm just not that much of a team player, I guess.

If you get a recommendation from me, you better believe I believe in that product. And there's not a chance in hell I'm going to mess with the trust my readers have in my recommendations.

But anyway, here's how this might apply to you and your business.

A lot of real estate agents use the quid pro quo ("something for something") approach to choosing their service providers. In other words, they require referral reciprocity from their lenders, inspectors, insurance agents or hair-dressers. I see this most often in the Realtor/Lender arena.

I think it's a really bad idea. From a practical perspective, I want the very best lender on the planet handling my buyers and guess what? That guy or gal probably has relationships with another real estate agent or two (y'think?) and he'd be nuts to agree to a quid pro quo with me. And frankly, I don't WANT someone who is hungry enough to promise such a thing handling my buyer business; I want someone with a track record of getting mortgages done! To recommend a lender because he or she promises to send business my way is a lousy thing to do to my buyers who trust me.

Philosophically, I'm just as opposed. I don't want to feel obligated to anyone, nor do I want anyone to feel obligated to me. And what happens if your "favorite" lender starts dropping the ball? Are you still obligated?

Your thoughts? Please share!


Wow, Jennifer! This topic hit me hard, as I have had
this experience before, and I didn't quite know how to deal with it. I am somewhat of a competetive person,
and try to keep an "edge on the market", as best I can,
to maintain and increase my business in various ways, as an agent.

Here's my story:
I had been sending a lot of my clients to a certain friend and loan officer that I had a good relationship with. The only problem was, I was sending her all my business, and I recieved NOTHING back from her in return.
I really did want to have a "strategic relationship" w/ someone, someone who would be on my "team", that I could trust, who would take care of my clients, and keep them coming back to me, etc. And, I thought for a while that I might recieve some referrals from her. But it didn't work out that way. I never got ONE referral from her over many months of doing business together. So, I got hurt over it, (even though I tried not to let it bother me) and stopped sending her my business.

I did go to an open house her company had at the holidays, hoping maybe I could re-kindle a working relationship with her again, and hoping she would send me some business, so I asked her straight out: "Do you ever get any clients coming to you for loans, who don't already have a Realtor?" She said "No, I really don't."
I was so suprised, as I know that other loan originators I have talked with do get clients without Realtors, and they do refer out to Realtors they work with or know.

Now, I read your post on the Exchange, and you feel that we should NOT have these types of relationships with people, expecting any referrals or business in return.
This is a new perspective for me, as I thought this was
a good way to do business. But, as it turned out, it wasn't so good for me with this loan officer, and our friendship has greatly suffered because of my being hurt, even though I don't think she really knows why I don't send her any more business.

Soooo......this perspective of yours was eye opening for me, and I really do see your point now. I guess I do agree with you, even though I would still like to think
that "strategic relationships" with other vendors is a profitable thing. In reality, it may not be such a good thing. I guess it would really depend on how that relationship was set up, and what exactly was expected, and whether our clients would be hurt by it in the long run. Thanks a bunch!

Jennifer, thanks for posting your fantastic missive. I wanted to have it shared with ACREs as I think it

a) makes one think
b) Jennifer's thoughts are at the heart of consulting - at the base of everything should be the question "Is this in my client's interest or in mine?"

Thanks to Pam for your thoughts. You are not alone in this being a new perspective. Though we have all kinds of talk about ethics - our industry is built on how to make a buck as the primary focus.

I happen to agree 110% with Jennifer which is why I wanted her to share. I would love to hear other thoughts on this.


I can identify with Pam's experience. I have a lender colleague to whom I sent a lot of business and who has never reciprocated. It has recently come to my attention that she hasn't been giving very good service to some of the folks that I have been sending her way either (she doesn't call them back, etc.). Thus I quit sending people to her. There are now other loan originators working for the same institution that I have also sent people to who give A+ service, so I'm sending my potential clients to them instead.

Thanks for the feedback! The response I got to the original email has been passionate, to say the least. My inbox overfloweth with replies of support.

It never occurred to me to expect referrals from my lenders and I never got any. Oh, my lenders loved me; in fact, one of them said I had the "best borrowers" of any of his agents, but I truly don't believe they had all that much business to refer. There's no reason they would have dissed me, and I never gave it a thought. It was PLENTY (and I mean plenty) enough for me that they treated my clients as their top priorities and got the freakin' job done.

If our primary criteria for selecting people to refer is their willingness to refer to us... geez... that's kinda pathetic.


I also agree 100% with the not expecting something in return for a referral to another service. I see it as our responsibility to help our clients find the best possible service to make things go smoothly. Ultimately, if our clients are happy and everything goes well they will refer us to their friends or family and that is the best payment we can receive.

Donna Hoffman
Boutique Real Estate Services
Edmonton, AB Canada

Hi all,

Although I also agree 110% with Jennifer on this topic, I just want my customers to experience excellent service, I also think that Loan Officers DO get lots of business they could refer to us, as I've had several chats with them on this topic. In an unconfrontational way of course, more out of curiosity than anything else.

Let me share a story with you that is on the total opposite side of the spectrum, and the outcome. I have always gladly referred buyers to loan officers that I consider to give great service to. I do not like to refer business (whether it's reciprocal or not) to someone who doesn't do the job.

A few years back, I had a loan officer that did a fantastic job for me with all of my buyers. His communication and ability to get to closing was excellent. At a company event, he confessed to me that since he was fairly new in the business, he could really use a lot more agents like me, or referals and asked for my advice on how to increase his business.

Now me? I always give, never expecting anything in return, because that is just the way I am. Since I'd sold several houses in a new home subdivision where I had developed a great relationship with the on site sales consultant as well as the developer. They expressed to me that they were currently unhappy with their lender and because of the way new home subdivisions work here, they always offer to pay a lot of buyer costs IF the buyer uses their in-house lender. It is just easier to track business for them, but this lender was not getting the job done and they asked me if I knew any lenders they could interview for their new position.

Of course, since my experience with this lender I was using, who'd done such a fantastic job for me and needed help, I said you should call xxx. He is awesome. Well, they did, and to make a long story as short as possible, he got so busy with this developer that I HOOKED HIM UP WITH, that he promptly fell off the face of the Earth and I could never get him on the phone anymore to take care of my buyers.

What gratitude that was!
Lesson learned: You can be TOO helpful, and to expect something in return, other than just getting your clients transactions closed with no problems is not imho ever a good thing. Never is helping too much apparently ;-) I never even got so much as a 'thank you' from this lender either.

About 3 years later, we happened to be attending the same event at our board. How embarrassed was HE at seeing me there, and knowing he had basically dumped me, never even said thanks, etc? He came up to me and in a light-hearted attempt at trying to kiss and make up, tried to apologize. (although bear in mind now that it is THREE YEARS LATER and the new subdivision had sold out by then).

He actually had the audacity to ask me for my business back. hmpf! I think my remark to him went something like this: "I am a professional REALTOR, not a pro baseball player, and you don't get 3 strikes with me before you are OUT".

Needless to say, my opinion of getting business in return for business from that point on went through a dramatic change. I never expected any referrals back from him, but a thank you or at least continuing to service my clients, rather than total abandonment would have been nice.

Food for thought from the other side of the fence on working with people for reasons other than the good of your clients. It is a conflict of interest imho and should never be done.

Terrific and thought-provoking post from Jennifer, as well as remarks by all. It is this type of sharing of information that makes us all better, thanks to the magic of the ACRE exchange. Another good reason for more people to join the revolution ;-)

This page contains a single entry by Jennifer Allan published on October 6, 2009 12:00 PM.

Discussion with my Broker was the previous entry in this blog.

Do Your Clients Need "Just a Little Help"? Consulting Is Perfect! is the next entry in this blog.

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