Mastering the Art of Real Estate Referrals
Prospecting for new real estate clients can be time-consuming. However, if you want to make money in real estate, it is an essential part of the job. Imagine if you could cut down on the amount of time you have to spend searching for new clients—because you receive a direct link to new leads, or because the clients come directly to you. If that sounds too good to be true, you are seriously underestimating the value of real estate referrals. In conjunction with other prospecting efforts, referrals can contribute big time to the growth and overall success of your business.
However, you can’t just expect the real estate referrals to come flying in without you putting in a little effort. Read on to learn what you must do to build and sustain your referral business.
Be really good at your job
Current and past clients and other contacts will not refer you to their family, friends, and acquaintances if you do a terrible, or even just mediocre, job. You must provide consistent and excellent services and be committed to giving your best to your clients each and every day. It takes more than just a winning personality; you have to go above and beyond to meet clients’ needs.
When you start to work with new real estate clients, ask them what they expect from you and the process, and do everything in your power to meet those expectations. Perhaps most important, though, is that you keep clients’ expectations in check by being honest with them about the market, their budget, and what you can realistically do for them. If you let them believe the impossible is possible, they will be disappointed in you and the experience. That is no way to gain real estate referrals.
Set referral goals
While it certainly takes time to build real estate referrals, you should decide how many you want to obtain each month or year. Setting a goal will ensure that you continue to make them a priority.
Admittedly, as a new agent, figuring out that goal can be difficult, so talk to other agents about their own experiences to establish a benchmark. As you gain experience, you will be able to set more realistic goals for future periods, so be sure to monitor and document your referral numbers—and the results of each referral.
Expand your pool of referrers
No doubt friends and family can be allies in recommending your services to others. However, also consider these three sources of real estate referrals:
- Satisfied current and past clients – Chances are, they are already talking about you when they discuss selling or buying a property, and they have a first-hand account of how effective you are at your job.
- Business associates – You’re in constant contact with so many professionals, including mortgage brokers, bankers, appraisers, inspectors, attorneys, title officers, property inspectors, and so on. Once you can vouch for their work, refer them and ask them to return the favor. Just be sure that you know your broker’s policies regarding conflict of interest or referral fee prohibitions first.
- Social, personal, and professional contacts – Create a comprehensive list of all additional personal and professional contacts you come across in your daily life. Your child’s teacher, a personal accountant, your doctor, and so on can all support the growth of your real estate business. You just have to ask.
Establish a ranking system for referrers
Some referrers are just more important because they generate leads that result in sales. You want to make sure you are putting in the effort to foster those relationships, so create and maintain a referral list. Then, as you organize your real estate referral sources, identify their priority level like this:
- Level 1 Sources – Past and present clients who will likely send real estate referrals to you because you have a good rapport; relatives, friends, and other contacts who send you leads regularly; and associates in influential social/professional positions.
- Level 2 Sources – People who will probably send referrals to you, but require additional work such as repeat requests or additional interaction. Additionally, these sources may also place certain limitations on their referrals to you.
- Level 3 Sources – People who may send you new business because they have heard about you, but you do not know when or how they will do so.
Note: You should have twice as many real estate referrals from Level 1 as you do from Level 2, and twice as many from Level 2 as you do from Level 3.
Obtain quality real estate referrals
Even the very best salespeople can come across as pushy when they ask for business referrals. Plus, it’s all too easy to make people think you are only contacting them because you want something. That’s why it’s important that you do the following:
- Contact referrers regularly – If someone contacts you out of the blue asking you for a favor, it’s annoying. Find ways to stay in contact with those referrers, whether it’s by checking in periodically via phone call or by sending them a link to an article you just wrote.
- Allow time for the conversation – Don’t ask people for the referral in the first few seconds of a conversation. Chat for five or 10 minutes, and leave plenty of time to make the request and talk about it.
- Reach out to them personally and directly – Especially for those Level 1 referrers who consistently bring in business, meet face-to-face as much as possible. Treat them to dinner or lunch, for example, to show that you value the relationship.
- Ask for referrals directly – Don’t beat around the bush with phrases such as, “It would be great if people could recommend me to their friends and family.” Instead, say “I would really appreciate your help in growing my business. Who should I contact …” Or “Please refer me to ….”
Make the home buying and selling process easy for people
People are busy, so if you want them to willingly offer up leads, make the process as easy as possible. First, educate them on the life events and situations that signal the need to buy, sell, or invest in real estate, including:
- A growing family, as a result of pregnancy or adoption
- Children leaving home for college or other pursuits
- Marriage or divorce
- Job change or retirement
- Ill or aging family members who bring about the need for different accommodations
Additionally, describe your ideal candidate, specifically if you are wanting to serve a particular niche market. If you are feeling bold and you have rapport with the person, request time to go over their contact list with them, for example, over lunch.
Finally, if referrers just aren’t ready to offer leads, ask them to keep you mind—and follow up with them later.
Determine leads’ readiness, willingness, and ability to move forward
Referrers, with the best of intentions, sometimes send people your way who have no interest in or ability to make a real estate decision. To rank referrals—which you need to do to determine how much time to allocate to each—ask referrers, “On a scale of one to four, how would you rank this person’s readiness, willingness, and ability to act in the immediate future?”
Prioritize real estate leads who seem particularly motivated.
Gain some insight on promising leads
Ask a few additional questions to learn how best to approach the person, for example:
- Will you describe a few of this person’s favorite interests and activities?
- What is this individual’s personality so I know best how to approach him or her?
- May I use your name when I make contact?
That last one is critical, because you want to confirm that you have referrers’ permission to contact the person.
Reward and follow-up with real estate referral sources
Show appreciation to your sources each time they send a referral your way—not just when the lead results in a commission. If you only acknowledge the referrals that turn into sales, you limit the number of referrals you receive—and you kill people’s motivation to put in the effort to send you leads. Mail referrers a handwritten thank you note or a small show of appreciation, such as a gift card (if and when your budget allows).
Without being negative or jeopardizing confidentiality, let sources know what is happening with the referral. If the referral does not work out, still thank your sources for their time.
Connect with real estate leads for the first time
So you have a great list of leads. Now what? First change your mindset. You are contacting people to offer them a valuable service—not to pester them. Additionally, have some confidence. If you go into the conversation acting apologetic or unsure of yourself, the leads may lose confidence in your abilities. So take a deep breath, relax, then call them up and do the following:
- Use the name of your source to break the ice – When you make initial contact, likely by phone or email, saying something like “Billy B. suggested that I call you …” provides a reason for your call.
- Request a face-to-face meeting – In-person contact is ideal, so ask a referral if you can treat him or her to a cup of coffee to talk things over.
- Discover the referral’s expectations – Ask questions and listen carefully to learn what leads are looking for, the limitations and must-haves, and so on.
- Convey your expertise, knowledge, and reliability – Answer their questions when you absolutely know the answer, and for any information you don’t know, tell them you will get back to them with answers. Never try to flub your way through a conversation or pretend you know something you don’t. If you provide the wrong information, you could damage your credibility.
Establish an ongoing relationship with your real estate leads
Even if the lead is not interested in doing business right now, don’t abandon the relationship altogether. The person could turn into a client or another source of referrals down the road. Instead, keep the possibilities open by asking questions, such as:
- May I contact you again in one/three/six months?
- Would you be interested in receiving my newsletter, market statistics, and other updates?
- Would you please give your contacts my information so I can help meet their real estate needs?
While it seems like a great deal of work, it’s not in vain. Real estate referrals become clients more often than leads generated from other promotional avenues. If you play your cards right, the chances of landing more business is high.
- Mastering the Art of Real Estate Referrals
- How Can You Really Get to Know Your Local Real Estate Market?
- This Best Kept Secret Helps New Real Estate Agents Find Clients
- Trick of the Trade: Lead Generation Tips for Real Estate Agents
- 5 Goal-Setting Strategies for Real Estate Agents
- 3 Time Management Strategies Real Estate Pros Use to Get Ahead
- Do You Have the Temperament to Be a Real Estate Agent?
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