Referral Partners Who Stop Sending Deals Are Telling You Something About Your Follow-Up

A real estate agent in western Sydney told me something that perfectly captures the referral commission problem in mortgage broking. He said: “I’ve referred buyers to three different brokers over the past two years. Two of them never told me whether the deals settled. One of them still owes me a referral fee from eight months ago. I’ve stopped referring to all three.”

Three brokers. Potentially dozens of future referrals. Lost — not because the agent found a better broker, but because nobody closed the loop. Nobody sent a settlement confirmation. Nobody paid the referral fee on time. Nobody treated the relationship as a business partnership that requires ongoing management.

This is remarkably common. Mortgage brokers build referral networks through personal relationships, business networking, and professional associations. The initial connection happens naturally. The first few referrals flow easily. Then the operational follow-through breaks down — and the referral pipeline quietly dries up.

What Referral Partnerships Are Actually Worth

Referral partnerships aren’t just “nice to have” for mortgage brokers — they’re the economic engine of most broking businesses. A broker with 8-10 active referral partners sending 2-3 deals per month has a pipeline that doesn’t depend on marketing spend, SEO rankings, or lead generation platforms. Each deal arrives pre-qualified, with a warm introduction, and a motivated borrower who trusts the referrer’s recommendation.

The math is compelling. A real estate agent who sends 2 buyers per month generates 24 referrals per year. At a 73% conversion rate, that’s approximately 17 settled loans. At an average commission of $5,500 per settlement, a single active referral partner is worth $93,500 in annual gross revenue.

Losing that partner because you paid their referral fee 45 days late is not a minor operational issue. It’s a $93,500 revenue decision disguised as an accounting oversight.

The Three Ways Brokers Lose Referral Partners

1. The Communication Void

The referral partner sends a client. Then… silence. The partner doesn’t know if the borrower made contact, if the application was submitted, if it was approved, or if the loan settled. They referred their client to a professional and received zero feedback.

This communicates one thing: the broker doesn’t value the relationship enough to provide a simple status update. Even if the broker is working hard on the deal, the partner’s experience is one of indifference.

Most brokers don’t deliberately withhold updates. They’re busy. They’re processing other applications. They intend to call the referrer when the loan settles. But “when the loan settles” is 30-45 days away, and by then they’ve forgotten to follow up.

2. The Payment Delay

Referral commissions are calculated after the broker receives their own commission from the lender, which arrives after settlement. This creates a natural delay of 2-4 weeks between settlement and referral payment. Partners understand this timeline.

What they don’t understand — and won’t tolerate — is receiving their payment 60 or 90 days after settlement, or not receiving it at all until they chase it up. Late referral payments signal either cash flow problems (which makes the partner question the broker’s professionalism) or disorganisation (which makes the partner question whether their next referral will be handled any better).

3. The Accounting Black Hole

When referral commissions are tracked manually — in a spreadsheet that someone updates when they remember, or in the broker’s head — errors are inevitable. Commissions are miscalculated. Payments are duplicated or missed. The partner receives a payment that doesn’t match their records, and now there’s a dispute that damages the relationship even if the broker was right.

The worst version of this is when the broker can’t provide a clear accounting of referrals received, loans settled, and commissions paid. The partner asks for a statement, and the broker has to reconstruct it from email chains and bank transfers. That reconstruction takes hours and often reveals discrepancies.

Building a Referral Commission System That Retains Partners

Partner Onboarding

Every referral partner should have a documented agreement that specifies: the commission split percentage (upfront and trail), payment terms (within X days of broker receiving lender commission), how referrals should be communicated (email introduction, phone call, form submission), and what communication the partner can expect (milestone updates, quarterly statements).

This agreement eliminates ambiguity. The partner knows exactly what they’ll earn, when they’ll be paid, and what information they’ll receive. The broker knows exactly what they owe and when.

Milestone Communication

At three key points in the loan lifecycle, the referral partner receives an automated but personalised email:

Application submitted: “Just letting you know I’ve submitted [borrower name]’s application to [lender]. I’ll keep you posted on the progress.”

Conditional approval received: “Good news — [borrower name]’s loan has been conditionally approved. We’re now working through the valuation and final documentation.”

Settlement confirmed: “The loan for [borrower name] settled today. Thank you for the referral — your referral fee of $[amount] will be processed within 14 days.”

These three emails take zero effort once automated, but they transform the partner’s experience from “I have no idea what’s happening” to “I’m being kept informed at every step.”

Commission Reconciliation

When the broker receives their commission statement from the aggregator or lender, the system should automatically:

1. Match each settlement to its referral source
2. Calculate the referral fee based on the partner’s agreed split percentage
3. Create a payment task with the amount and partner’s bank details
4. Flag any discrepancies between expected and actual lender commission (which affect the referral calculation)
5. Log the payment when completed

This process eliminates manual calculation errors, ensures timely payment, and creates an audit trail that both the broker and partner can reference.

Quarterly Partner Statements

Every quarter, each referral partner receives a statement showing:

• Referrals received during the quarter
• Application outcomes (approved, settled, withdrawn, declined)
• Commission calculations and payments made
• Year-to-date totals
• Outstanding balances, if any

This statement serves two purposes: it demonstrates professional accountability, and it gives the partner data to evaluate the relationship. A partner who sees “12 referrals sent, 9 settled, $14,300 in fees paid” knows the relationship is valuable and worth maintaining.

The Clawback Complication

One aspect of referral commission management that catches brokers off guard is the clawback scenario. If a borrower refinances within the lender’s clawback period (typically 12-24 months), the lender claws back some or all of the upfront commission from the broker. If the broker has already paid a referral fee to the partner, the broker is out of pocket for both the clawed-back commission and the referral fee.

Smart commission tracking includes clawback monitoring. The system flags loans that are within the clawback period and alerts the broker if there are signs the borrower may refinance (such as a rate review request or a new finance enquiry). This doesn’t prevent clawbacks, but it gives the broker advance warning and the opportunity to proactively contact the borrower to discuss their options — potentially retaining the loan and avoiding the clawback entirely.

Some brokers include a clawback clause in their referral agreements, requiring partners to return a pro-rata portion of the referral fee if a clawback occurs. While this protects the broker financially, it can strain the referral relationship. The better approach is to track clawback risk proactively and work to retain the borrower before the issue arises.

Measuring Referral Network Health

Beyond individual commission tracking, brokers should monitor the overall health of their referral network with these metrics:

• Referral volume trend by partner: Is each partner sending more, fewer, or the same number of referrals quarter-over-quarter? A decline is an early warning sign.
• Conversion rate by referral source: Which partner types produce the highest-quality referrals? Real estate agents typically convert higher than generic networking contacts.
• Average deal size by partner: Some partners consistently refer higher-value borrowers. These relationships deserve more investment.
• Payment timeliness: What’s your average days-to-payment after settlement? If it’s creeping above 21 days, you have a process problem.
• Partner tenure: How long has each partner been actively referring? Partners who’ve been referring for 2+ years are your core network — protect those relationships.

The referral network you build over a career in mortgage broking is one of your most valuable business assets. Treat it with the same discipline you’d apply to your loan book — track it, measure it, and invest in it systematically.