So you're a real estate agent and you want to take advantage of the lucrative commissions you can make by encouraging other agents to share referrals with you. To make a long story short, it's all about "networking" - both online and offline. But because with agent referrals you are dealing with agents in other cities, one of your most important tools for networking with other agents will be the internet.

In a nutshell, here are the three most important steps for developing a strategy for generating agent-to-agent referral activity.

1. Develop a referral network with agents in other cities. Use internet networking sites, email and telephone.

2. Work your network to raise your profile. Use internet networking sites, email and telephone.

3. Generate outbound referrals by promoting yourself as a "relocation expert" and send referrals to your network partners as often as possible. Use internet networking sites, email, telephone, and other forms of networking to connect with your clients and prospects.

To help you better understand the kind of networking process I'm talking about here it will be good to keep a couple of distinctions in mind. First, it is important to distinguish between inbound and outbound referrals. An inbound referral is one you get from another agent. That other agent sends you a client (usually moving to your city), and you handle their house purchase.

On the other hand, an outbound referral is one that you send to another agent. You have a client moving to another city, and you send your client to an agent in that other city who then handles the real estate transaction. The other agent gets the commission for handling the purchase. But you get a portion of that commission (usually about 25%) for sending the client their way.

As I have said, generating referrals is all about establishing contacts with other agents across the country. And that boils down to "networking" - the process of forging relationships with other agents, establishing trust, and encouraging back and forth business transactions.

When discussing "networking" it is also important to distinguish between "active" and "passive" networking. Active networking is what you are encouraged to do on social networks like Facebook and Twitter. To get results - to meet people, learn new things, gain new friends, etc. - you have to participate in the conversations other people initiate, and you have to initiate conversations yourself. This is what I call "active networking".

Or in the offline world (the "real" world) active networking is what goes on when you become a participating member of a social club or service organization, church, home and school, community group, or get involved in volunteering for various community projects.

Passive networking, on the other hand, is just joining Facebook, LinkedIn, Active Rain, etc. and not participating. The passive networker doesn't spend any time actually "networking" - doesn't share information with other members, or engage them in online conversations, ask questions, or make comments.

The truth is, most busy people do not think they have time to spend doing active networking in online forums like Facebook and LinkedIn, so they join in order to "have a presence", and then hope people will contact them with offers and business proposals. The model they follow is more like traditional advertising. They place an ad in the newspaper, a real estate book, or buy one of those park bench ads and then expect people to respond to it without having to do anything further.

Unfortunately this doesn't work in social networking situations. Whether you are doing "networking" online or offline the assumption going in is that you will be engaging in active networking: participating in the activities of the group, sharing ideas, and interacting with other members.

Understanding the difference between active and passive networking is absolutely critical in your quest to take advantage of networking opportunities. If you expect people to care about what you have to offer them, you will have to care about what they have to offer you. That is what we mean by "active networking". The more you engage in this kind of active networking, the more fruitful your results will be.

The application of this principle to generating referral business from other agents is simple and straightforward. The more active networking you do with the largest possible group of agents in cities across your region and country, the more trust you will build with your networking partners and the more referral business you will ultimately get.