Maximising Third-Party Income in Your Estate Agency Business

Third-party income is a valuable and often overlooked opportunity in the estate agency business. While we’ve touched on it previously, it’s time to delve deeper into how it can be harnessed effectively and seamlessly integrated into your client conversations. Developing these revenue streams can not only boost your income but also enhance the services you provide to your clients. Two of the most significant sources of third-party income for an estate agency are referrals to mortgage brokers and conveyancing partners. Both offer valuable opportunities to earn additional income while supporting clients through the buying process.

Mortgage broker referrals are an invaluable resource, given that around 40% of properties in the UK have a mortgage attached. This sizeable proportion means that a large number of buyers either have or will need a mortgage, particularly among first-time buyers or those moving up the property ladder. For an estate agent, the financial benefits of partnering with a mortgage broker can be substantial. In many cases, agents can earn more from mortgage referrals than from property sales, with fees coming from a percentage of the mortgage’s procuration fee. This income is pure profit, with no overheads, as the referral fees come from completed transactions. Additionally, these referrals don’t require that buyers purchase through your agency, offering a lucrative, ongoing revenue stream even when clients buy elsewhere.

Beyond the financial benefits, mortgage broker partnerships offer estate agents greater control over the sales process. By referring clients to trusted mortgage advisors, you establish a relationship that facilitates smoother transactions. If the advisor is someone you know, you can resolve issues more easily, saving time and reducing stress for both you and the client. The same logic applies to solicitor referrals, which offer both a steady income stream and the convenience of working with a familiar contact. This relationship makes it easier to manage the various aspects of the conveyancing process, reducing delays and avoiding unnecessary complications.

A solid rule of thumb is to aim for about £1,000 of additional income from each property. Therefore, if you bring five properties onto the market in a month, the goal should be £5,000 in referral income. Anything less means you’re leaving money on the table, while anything more signifies that you’re making the most of your referral opportunities.

Finding the right referral partners requires balancing fee potential with reliability. It may be tempting to go with the highest payer, but you want to choose a partner who will provide a positive experience for your clients. Recommending subpar services can reflect badly on you and damage client relationships. A strong referral partner will be efficient and proactive, complementing your own commitment to delivering excellent service.

Referring financial services and solicitors requires knowing when and how to ask the right questions. To maximise mortgage broker referrals, start the conversation when clients discuss their financial planning for the purchase. Avoid the common question, “Have you got your mortgage sorted?” as buyers almost always respond with “yes.” Instead, ask questions like, “How did you arrive at that budget?” and listen carefully to their response. By doing so, you gain insight into their financial plans and uncover opportunities to introduce them to a broker. For instance, if they’re planning to buy with cash, this could open the door to discussing buy-to-let mortgages if they’re looking for investment properties.

Clients may also say they’ve visited their bank or multiple banks. This is where you can explain the limitations of bank-provided mortgage products. Most banks offer only a small selection of mortgages, while brokers can access thousands of products, often including deals that aren’t available on the high street. Highlight that your broker can compare far more options, giving them a better chance at finding the most competitive deal.

If a client says they’re already working with a mortgage advisor, knowing your competition can help you identify ways to win them over. For instance, if you know that some advisors charge an upfront fee while yours doesn’t, this could be a compelling advantage. Asking “Who have you compared that advisor against?” can also prompt clients to consider whether they’ve truly secured the best deal, opening the door for a referral.

When it comes to solicitors, the referral process is even simpler. Most buyers don’t look into solicitor costs far in advance, so if you ask, “Have you checked how much a solicitor will cost?” you’ll often find that they haven’t. Offering to get a quote then becomes a natural next step. If they have looked into it, follow up with “Who have you compared them to?” This question mirrors the mortgage referral process, as it allows you to introduce your recommended solicitor as a more competitive or convenient option.

Incorporating these conversations into your client interactions may seem challenging at first, but it soon becomes second nature. The key is to ask. Often, estate agents miss opportunities because they don’t initiate the conversation. Every client, whether registering to buy, booking a viewing, or seeking a market appraisal, represents a potential referral. By consistently asking the right questions, you’ll increase your chances of earning third-party income while ensuring your clients receive the best possible service.

The earlier you introduce these questions into your interactions, the better. A client might start by saying they’re not interested, only to change their mind as they become more comfortable with you and your agency. Don’t be discouraged if you don’t secure a referral immediately, as there will be further opportunities during subsequent interactions. Remember, each conversation about financial services or solicitors is a chance to build your income, strengthen client relationships, and make the sale process smoother for everyone involved.

In sum, the combination of financial services and solicitor referrals is a powerful tool for estate agents. With no upfront cost and substantial revenue potential, third-party income can be a game-changer for your agency. By proactively offering these services to your clients, you not only boost your income but also enhance the buying experience. So don’t let these opportunities pass you by—ask the questions, open the door to referrals, and watch your business flourish.