Is it smart to use your realtor's vendors? How to answer a client honestly

By Todd, founder of Proferral

Sources checked on

Yes, it's often smart for a client to use their realtor's vendors as a starting point, and you can say so honestly. A name from someone who has watched other clients hire that roofer beats a cold search. Tell the client to still check the license, get their own written estimates and ask you whether you're paid for the referral.

What should you say when a client asks if they should use your vendors?

Say yes, and then tell them why and where it stops. The question may really be about whether you get paid, so cover that before they have to ask. Here's wording you can use across the table or in a text:

"I'd start with them, yes. Everyone on my list is someone a past client hired and told me about afterward. Nobody pays me to be on it. Still, check the license yourself, get a second quote if it's a big job, and get the price in writing. If anything goes wrong, I want to hear about it."

Change the second sentence to match what's true for you. If a vendor is your cousin, or you've only sent one client to them, say that. A client who learns it later will trust the rest of your list less.

What should the client still check on their own?

They should check the same things they'd check on any contractor, because your recommendation doesn't replace them. The FTC's advice on avoiding home improvement scams gives the list, and it starts with asking people you know and trust for recommendations, which is what your client just did. Then it says to:

A license lookup is a free search on the state's site. In Oregon, the Construction Contractors Board search finds a license by number or business name, and in some cases by phone, and in Washington, L&I's Verify tool shows the contractor's registration, workers' comp account and any lawsuits against the bond. The lookup for every other state is in how to check a contractor license, state by state, and the questions to ask a contractor before hiring are worth sending along too.

Should you tell clients whether you're paid for referrals?

Yes, tell them plainly either way. If you get nothing from the vendor, say so, because the client may be wondering. If there's any arrangement, such as a marketing agreement, a shared office or a brokerage vendor program, tell the client before they call.

Whether a given payment or arrangement is allowed at all is a separate question. The rules vary by state and by the kind of service, so check with your broker or your state board before you accept anything from a vendor. For how paid vendor programs work, see what a preferred vendor list is. This article is general information, not legal advice. Rules change, so confirm details with your state's licensing board or your broker.

When is your list the wrong place to start?

It's the wrong place when you don't have a real answer. If the job is outside the trades you know, or the house is in a town you rarely work in, tell the client you don't have someone you'd stand behind. Sending them to a name you found that morning puts your reputation on a stranger.

It's also the wrong place when a client has a contractor they already trust. Say so, and wish them luck. Your list is a starting point, and the client still makes the hire.

Nobody pays to be on a Proferral list

If you keep your list in Proferral, no provider pays to be listed, and plan tier never changes the order of a list. There are no referral fees, and Proferral takes no cut of anything. That covers Proferral only; it says nothing about any arrangement you have with a vendor yourself. License checks against state rosters cover Oregon and Washington today, so anywhere else your client runs the lookup by hand. Here's how the license checks work.

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