Generating referrals is a key part of the real estate business. Are you ready to take this old standby and update it for 2008?

When most agents start the business, they normally make a list of the people they know who may send referrals to them. There are several reasons that this approach typically generates only one or two transactions:

  • Friends and family know that the agent is new to the business.

  • The agent may lack an adequate knowledge of the inventory or the ability to close buyers and sellers effectively.

  • Potential clients may fear that the agent will discuss them or their finances with others they know.

In order to succeed, agents must expand beyond their personal circle of friends and family. As one veteran agent put it, "When you start in the business, it doesn’t take long to run out of family and friends who will do business with you. On the other hand, there’s never a shortage of strangers."

Creating and maintaining a strong referral database is challenging. Some programs rely on mailers. The challenge is that unless you design something unique, you may be mailing the same person exactly the same materials that another agent is sending. Furthermore, the phrases that say "I’m never too busy for your referral" or "Oh, by the way, if you know of someone who is thinking about buying or selling a home, I definitely would appreciate your referral" have been so overused that they are no longer effective.

Today, there is a much better way to generate referrals and to do so almost effortlessly. If you haven’t joined LinkedIn.com, this is one of the quickest ways to expand your referral database. Their motto at LinkedIn is "Relationships matter." This site is an excellent business-to-business way to connect on the Web. Currently there are more than 19 million experienced professionals in this network.

If you’re not linking up your clients with LinkedIn, you’re missing one of the most important opportunities today to generate referrals, post testimonials and grow your online credibility.

Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate’s Discounters" and "Who’s the Best Person to Sell My House?" Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at www.LuxuryClues.com.


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