A real estate referral agent refers clients to other real estate agents. The referral agent's work stops after they satisfactorily refer you to another agent. The second agent does the rest of the work necessary for your purchase, such as purchase negotiations. Below are some reasons to use a referral agent for your purchase.

You Don't Have a Working Relationship With Any Agents

Real estate agents are professionals, but like other professionals, they are not all the same. Thus, you should not pick an agent at random to help you buy a house. Many people get agent referrals from friends or online resources. However, even such referrals are not always possible.

A referral agent can connect you to a great and qualified agent. The referral agent has a stake in your purchase because they only get their money (the referral fee) if the deal goes through. Thus, they will only connect you to someone they are confident can help you.

Your Agent Is Unfamiliar With the Target Neighborhood

The best real estate agent varies by circumstances. Thus, even if you have a working relationship with an agent, they might not be able to help you buy a property in an unfamiliar city. An agent should have an intimate knowledge of your target neighborhood. For example, they should know:

• The going rate for the type and size of house you want
• The safety of different neighborhoods
• Other real estate professionals in the area, such as home inspectors
• The best school districts

Thus, your agent may refer you to another agent with local knowledge of the area.

Your Agent Is Unfamiliar With the Target Property Type

Some real estate agents handle all forms of transactions or real estate services, while others specialize in certain niches. For example, some agents specialize in:

• Residential properties
• Commercial properties
• Rental properties
• High-end properties

Say you want to lease a commercial property, but the agent who helped you buy your current house specializes in residential purchases. The agent may refer you to another agent with in-depth knowledge of commercial real estate.

Your Agent Is Unlicensed in the Target Jurisdiction

According to investopedia.com, requirements for real estate agents vary by state. Some states have reciprocal agreements that allow their agents to operate within each other's boundaries, but that is not always a given.

Thus, your agent won't help you if you want a property in a state where they cannot practice—even if the agent knows the area. In such a case, the agent may refer you to another agent with the relevant license.

Contact a real estate agent referral agency for more information.