The relationships REALTORS® build and manage can lead to big business stemming from referrals. Case in point: forty-one percent of buyers found their agent through a referral from a friend or family member, according to a 2011 National Association of Realtors® report entitled Profile of Home Buyers and Sellers. Another 2012 NAR study indicated 67% of buyers and sellers contacted and selected just ONE agent to help them with their transaction.
One way to interpret this data is that most buyers and sellers do not even think about partnering with a broker until the need arises. The real estate agent they chose to work with is usually one they have worked with before OR yet another who is on the top of their minds at this time. That agent could be you by consistently making networking a regular part of your business practice right now.
Building your Network:
This blog previously referenced several digital marketing strategies that will be an important part of your networking strategy. For business networking purposes, the best place to start is LinkedIn. More than 225 million users rely on LinkedIn to both gain and pass on referrals for their respective business endeavors. It takes just 10 minutes to establish a basic LinkedIn profile for free. You’ll be surprised at how many people you know once you sign up. Be sure to invite all of them into your network, even request that individuals you know well to “endorse” your services.
Credibility is a key characteristic that drives referrals. People tend to refer professionals they like and respect. Even in this day and age, the best way to gain instant credibility is to meet people face to face, shake their hands and just be personable and professional. That is why attending several local community events a year is not a waste of time if you walk away with dozens or more new contacts—all of which could be prospective clients in time.
Investing even an hour a week on cultivating new contacts will make a big difference over time, especially when you begin to use current email and cell phone data to stay in touch with these contacts.
Initiating value-added communications is how you stay top of mind with contacts. This will require that you find subtle ways to proactively initiate communications at least two or three times a month. Your digital marketing platform will make it very easy to do this without overwhelming your network. Send E-newsletters and new listing announcements via email. Tweet links to reports covering favorable housing valuations or new community attractions.
Any correspondence you send to contacts will prevent you from being a stranger when the time comes to sell their home. Better still, your name will likely be the one your contact remembers when one of their friends asks “hey, do you know a good broker I can use?”
Form Alliances with Other Agents:
Building relationships with other agents can also generate valuable referrals. You can greatly increase your chances of becoming a buyer’s broker by targeting niche audiences, such as out-of-state markets that commonly feed into the one you serve. Use your LinkedIn membership to network with out-of-state brokers through LinkedIn groups like Residential Real Estate Referral Group or attend this year’s REALTOR’S® Conference in Expo (San Francisco, Nov. 8-11) where 22,000 other agents across the country will gather. Encourage these professionals to refer their clients to you as they are searching for a home in the communities you serve. Make sure you promise to do the same for them.
Ask and You Shall Receive:
Above and beyond anything, the number one way you are going to generate referral business is to ask your clients directly. If this sounds intrusive to you, know that your peers are routinely making this a part of their practice. According to a 2011 J.D. Power and Associates Home Buyer/Seller Study, 60% of those working with a broker were “asked” to refer their services to others who also may be buying or selling a home.
To be sure, networking your services will be critical if you are going to build a sustainable business in the residential real estate brokerage industry. Agents who consistently grow and stay top-of-mind with their networks will find themselves benefitting from an ongoing pipeline of highly-qualified referral business that drives sales for years to come.