Strategy
Part of Estate agent referrals and paid ads: which to use when
Estate agent referrals and paid ads: which to use when
How estate agent referrals and paid ads work for UK trades, when each channel pays off, and how to set up a referral fee that stays inside the rules.
What to take away
- Estate agent referrals hand you a homeowner at the moment they need a trade, at a cost you agree in advance rather than a cost you bid for.
- Paid ads on Google and Meta give you volume on demand, but the cost per lead swings with competition and season.
- Referral fees are lawful commercial payments when they are documented and recorded in your accounts.
- The strongest setup uses referrals for a steady baseline and paid ads to cover gaps in the diary.
How estate agent referrals work in practice
An estate agent's job is to move buyers into a property, and the week of completion is when a homeowner needs a locksmith or a boiler check. The agent already has that person's attention. For an agreed fee per completed job you get a warm introduction rather than a cold click.
The estate agent entry on Wikipedia sets out how branch staff sit between sellers and buyers, which is the position that makes a tradesperson introduction possible. Set-up costs are low: a phone call, a clear price list and a promise that you will turn up on time.
If you want more than one branch on side, approach two or three independent agencies in different postcodes and offer each the same written terms. Several small pipelines are safer than one big one, and no single branch can hold your diary to ransom.
Where paid ads do the heavy lifting
Paid search reaches people who are typing the problem into Google right now. You set a daily budget and the platform decides when to serve your ad. Costs are set by auction, so a busy postcode costs more than a quiet one, and winter heating jobs cost more than summer ones.
Trust is the weak point. A referral arrives with a recommendation attached; an ad arrives with a claim you wrote yourself. Ads also need groundwork: a landing page, call tracking and two or three weeks of data before the numbers mean much, plus someone to review search terms weekly.
Google gives you two formats to weigh up. Local Services Ads, where Google runs them for your trade, sit at the top of the results and charge per lead rather than per click, with a Google Guaranteed badge next to your name; they suit emergency call-outs where a phone call matters more than a form. Standard Search ads charge per click, but you choose the keywords yourself.
Meta ads work differently. They interrupt a feed rather than answer a search, so a homeowner sees you before they have started ringing round. That suits planned work — decorating, a garden clear-out, a new kitchen — better than a burst pipe, and it needs an audience, an offer and a landing page rather than a keyword list.
Comparing the two channels
The table shows where each route is strong, across the factors that usually decide a job. It compares the basis of each channel rather than a rate card: what you pay depends on your trade, your postcode and the branch.
Estate agent referral
- Time to first enquiry
- Days, once the branch agrees
- Basis of cost
- Agreed fee per completed job
- Control of volume
- Low, set by the branch's completions
- Buyer trust
- High, a recommendation from a known brand
- Setup effort
- One conversation and a written agreement
- Main risk
- Relationship ends after one missed job
Paid ads
- Time to first enquiry
- Hours, once the campaign is live
- Basis of cost
- Auction price per click or impression
- Control of volume
- High, you set budget and targeting
- Buyer trust
- Mixed, the buyer is comparing quotes
- Setup effort
- Landing page, tracking, weekly checks
- Main risk
- Spend continues while the campaign runs
Setting up a referral fee without breaking the rules
- Agree the basis in writing, either a fixed fee per completed job or a percentage of the invoice, with a cap that protects your margin.
- Check how customer details move. The ICO guidance on direct marketing and privacy and electronic communications explains what a lawful basis looks like before anyone passes on a homeowner's details.
- Record every payment. Company directors must keep accounting records, and the GOV.UK guide to running a limited company sets out what that means.
- Set a review date. Track jobs won, average invoice value and the fee as a share of that invoice, then decide within 90 days whether to carry on.
- Do not let the branch imply you are its in-house contractor unless that is true. Buyers should know you quote as a separate business.
The rules bind the agent as well as you. The Estate Agents Act 1979 and the Estate Agents (Provision of Information) Regulations 1991 require an agent to be upfront about the commission and fees it receives, and The Property Ombudsman's Code of Practice requires referral fees to be disclosed to the client. A fee that is kept quiet is a misleading omission under the Consumer Protection from Unfair Trading Regulations 2008, so ask the branch how it tells its sellers and buyers about your arrangement.
When the introduced job is regulated work, the introduction changes nothing about who may do it. Gas work must be carried out by a business on the Gas Safe Register, and notifiable electrical work needs the right Part P notification through a competent person scheme. An agent's word of mouth is no substitute for either registration.
Keeping both channels honest
A referral fee comes out of your margin, not from a hidden uplift on the customer's invoice. On an example job invoiced at £400, a £40 fee is 10 per cent of the work.
Compare that with paid ads on the same job. If clicks cost £60 before a booking, the referral is cheaper. If the branch sends one job a quarter, the ad earns its place instead.
Measure both on cost per completed job rather than cost per enquiry. A referral that never converts still costs you nothing, which is the quiet advantage of the model. One branch is also a single point of failure, so treat any referral pipeline as a supplement rather than a plan.
Common questions
Do estate agents charge tradespeople for referrals?
Some do and some do not. A branch may ask for a flat fee per completed job, a percentage of your invoice, or nothing beyond reliable service. Agree the basis in writing before the first introduction.
Can an estate agent pass a homeowner's details to me?
Only with a lawful basis, and the homeowner should be told what will happen to their information. Ask the branch to read its privacy notice wording aloud before names and numbers change hands.
Which is cheaper, referrals or paid ads?
Referrals usually cost less per job because you pay on completed work only. Ads charge for clicks that may never convert, but they can be scaled when the diary is empty.
