Real estate is a business of referrals. Just as in any field, a few bad apples can ruin the entire industry’s image, so it can be difficult for real estate agents to get attention if they aren’t recommended first.
Believe it or not, there is a simple solution to this issue: develop a great reputation.
When a real estate agent does business well, they will create a portfolio of referrals that will do the talking for them. But in real estate, doing business well can be easier said than done.
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Getting referrals from your clients
Anyone who does business is looking to get the biggest return with the least amount of work and as quickly as possible, but you must balance this with the client’s need to feel taken care of.
When people feel that they are being taken care of, they will be more likely to refer their friends and family. So how can a real estate agent create the best experience for their clients and get those real estate referrals?
Even though the name of the game is hooking clients and closing deals, the real estate agent must be honest and sincere. They should be open about the different options a client may have. Of course, the client may be in a situation where putting the home on the market is not feasible, but this will not be the case for all clients. Instead of avoiding listing the home, agents should show how working with them is the better option.
It could be a short closing time, or going through the laundry list of items that a home inspector goes through in a traditional sale, or maybe providing a list of rentals in their area to help with the transition. It’s more about customer service.
In cases like these, the agent may not close that particular sale, but they may have opened the door for a few real estate referrals. If they are honest, open, courteous, and respectful, the agent might even get referrals from someone who decided to refinance instead of sell.
Listening to clients and answering their questions can ease their worries and bring a realm of comfort that will encourage a smooth sale.
The realtor has been through this process before, but this will be the first time they are involved in a transaction such as this for many of their clients.
There are many nationwide tools like Cole Realty Resource—or local solutions like Real Estate IQ in Texas—where the realtor can do some research before they even meet the seller. The realtor will go in knowing how long the client has owned the residence, whether they’re facing a lien, and what their income is, which can inform the realtor on how to approach the sale. A family selling a cherished home will present different challenges than a rental owner who is just trying to unload a property. Using these tools offers a means to contact homeowners and paints a picture of those owners, which you can use to provide more efficient negotiations.
If the realtor is mindful of the climate of the situation and keeps the lines of communication open, they can check in with their clients and make sure they feel that their voice is being heard.
When a broker believes that a transaction is going particularly well, they should document it. They should keep track of timelines and money earned by the client. They should ask their clients if they can share a statement with future clients to accompany these numbers.
After a sale, the broker should send a thank-you note to their client. When clients remember their broker fondly, they might be more likely to send the agent’s name down the line when the time presents itself.
Brokers can ask to take pictures of happy customers. Real estate brokers often take photos of their buyers in front of their new homes and post them on Facebook. Why not take a picture with clients holding the envelope of their closing check?
Every once in a while, the broker can send out a quick note (through email, mailers, or even a Facebook status) that reminds past clients that referrals are the name of the game.
Through all their transactions, real estate brokers should be honest, mindful, and intentional. This perspective will help keep them on track to potentially being the name that people think of when their friends ask for real estate referrals.
And those referrals could be what helps them grow their business and set them apart from their competitors.
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Getting referrals throughout your community
When agents are getting started in real estate investing, they may have $200 or $20,000 dedicated to marketing. What’s more valuable, though, is their social network. I don’t mean having oodles of “friends” on Facebook, although that may help. This is more about having a network that can become an army of channels that will result in leads.
This doesn’t involve being “that guy” at a party begging for deals, but it builds upon having people know what you do. If you don’t run in many circles, or don’t have a large network to begin, here are several resources you can start with to grow your sphere of influence.
Connect with the chamber of commerce
Getting connected with other business leaders and owners can be a gold mine to build a referral network. Having other business owners who are exposed to thousands of customers and connections is a tentacle into the community.
Typically a chamber of commerce will have business lunches, and some may only allow one or two people from a particular business into each chapter. Agents can call their local chamber and see if there is space for a real estate agent or a particular niche.
Participate in community activities
Wednesday night bowling is just for kicks, right? Time and time again, it has been proven that it’s easier to work with people who share common interests, and they will most likely be happy to refer people they know. Agents shouldn’t be afraid to bring up their work; it will be easier for their friends to keep them in mind.
Real estate has been a popular subject for quite some time. Agents should be happy to talk about it, but don’t beat a dead horse. Agents should keep friends as friends (not thinking of them as just “lead source Joe” and “referral Rachel”) and remain natural about conversations.
If the agent has children who play a sport, sitting in the stands or coaching is great bonding time. Little Susie and Timmy might just be the best inadvertent networkers you know!
Talk to bartenders
Bartenders, baristas, and hairstylists are the types whose clients make tiny confessions to them (or tell their life stories!). If they are established and have regular clients, they will know the gossip or hardships on their customers’ minds. Even for agents who don’t frequent a bar or salon, it doesn’t mean this idea isn’t a lead source for them. What type of service personnel do you regularly see who are around the public all the time?
Whether or not the agent has an expensive and elaborate marketing plan, networking by word of mouth is a wonderful (and usually darn near free) place to start. Even after years of being established, it’s the type of business most entrepreneurs crave. Be consistent, be confident, and smile. Your network is your net worth, so invest in yours.
Host a seminar
People are always looking for ways to learn more about becoming a homeowner or launching their own real estate business. An easy way to reach these potential customers is by hosting a seminar on a chosen topic. Consider it goodwill to give tips and the lowdown on real estate, and hopefully, the participants will become future clients. This is also a good way to partner with other real estate businesses like lenders, home inspectors, and contractors. The more value and information the seminar can provide, the better your chances of snagging potential clients.
Getting referrals through referring agents
Part of the search for a property begins with finding the right real estate agent. And for those who don’t want to spend time searching for one, a real estate referral agent can help. It may be the case that the buyer is from out of state or is new to the area and doesn’t know anyone. In these instances, a referral agent would be a lifeline and make home buying easier.
Real estate referral agents have real estate licenses and know the legal requirements necessary to purchase a property. They connect home buyers with licensed real estate agents and take a lot of the guessing game and stress out of the process. The referral agent will refer real estate agents and do the due diligence to vet the referrals. Along the same lines, the referral agent also screens home buyers and gives quality referrals to real estate agents.
When the agent can find the right property and close the buyer’s deal, the agent receives a referral fee that is part of the real estate agent’s commission. The buyer does not pay them directly. Depending on the situation, it may be helpful to tap a real estate referral agent to facilitate the home buying process.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.