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. Read on to learn 10 steps to building and sustaining your referral business.
Step 1: 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 a 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.
Step 2: 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.
Step 3: 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:
– Current and past clients
– Business associates
– Social, personal and professional contacts
Step 4: Establish a ranking system for referrers.
Some referrers are 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.
Step 5: 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…”
Step 6: 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.
Additionally, describe your ideal candidate, specifically if you are wanting to serve a particular niche market. If you are feeling bold and you have a 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 in mind—and follow up with them later.
Step 7: 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.
Step 8: 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).
Step 9: 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.
– Discover the referral’s expectations: Ask questions and listen carefully to learn what they 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.
Step 10: 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.
Real Estate Express is the nation’s premier online real estate school, providing pre- and post-licensing courses, continuing education courses, and professional development to hundreds of thousands of real estate agents across the country. RealEstateExpress along with its sister schools McKissock Learning, Superior School of Real Estate, Allied Schools, The Institute for Luxury Home Marketing and Hondros Education Group, helps real estate professionals achieve sustainable success throughout each stage of their real estate career.