Ramping Up Real Estate Referral Business Is More Crucial Than Ever

Economic uncertainty is putting pressure on real estate agents’ databases. Hot leads have simmered, and suddenly business is harder to come by. That’s why referrals are more valuable than ever.

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This story was updated on Friday, Jan. 13.

To say the COVID-19 pandemic created a turbulent real estate market would be an understatement.

Agents across the country went from the fear of a sudden halt, remote showings and drive-through closings to standing-room-only open houses, cross-country relocations and site-unseen offers. It was wild.

The current slowdown, while not ideal, was needed. Buyers have relaxed a little and sellers seem to be – finally — reading the room. Obviously, the Fed is on the interest rate throttle, watching us all closely.

This is the uncertainty that tries agents’ databases. Those hot leads have simmered and suddenly business is harder to come by. And referrals are more valuable than ever.

Understandably, agents are on edge as 2023 takes hold without a definitive forecast. It’s meteorological equivalent would be “unsettled weather.” It could rain or hail. Maybe it’s only overcast. Thus, without knowing what the day will bring, leaning on referrals is what will get you through it.

Below, the Inman Handbook on referrals contains a wrap-up of sources, ideas, and helpful tools and tech for agents who want to ramp up how they leverage past relationships to get new business.

Do good business
Online reviews and testimonials
Sphere of influence marketing
The ask
Brokerage networks
Market targeting

Do good business

Referrals have to be earned.

While true of any business, real estate is unique in this respect because of the scarcity of deals. You interact with clients every few years, and their ability to remember how good a job you did fades a little every day. This is why there is growing contingent of software solutions to perpetually link homeowners with the agent who helped them, as well as drip campaigns, sophisticated social media marketing and direct mail. It all exists to maintain relationships as much as it does to initiate them.

However, all that tech and strategy goes nowhere if the initial deal didn’t sit well with the client. As transactional as real estate is, each deal is an integral part of your career Jenga tower. The more times you slip up, the less stable it all becomes. Consider a referral an untouched block. That should be your goal every time your client agrees to sign a listing or buyer representation agreement.

It’s not news to you that real estate deals are fraught with risk of failure. From the surprise parent who wants to see the house two days before closing to the buyer who overspends, keeping deals on track is how you earn a commission. Agents need to be hawk-eyed and cat-quick to keep it all aligned. A 2022 Zillow study found that 72 percent of homebuyers had second thoughts about their purchase, the primary regret being the amount of work the home needed.

Is that the agent’s fault? Not necessarily. But who might the buyer look to pin it on, regardless? A bad experience in one capacity tends to reflect on the whole.

This is why it pays to stay in touch as often as possible, and not only with deal points. Ask clients how’re they’re feeling about everything. Can you improve in any way? What expectations are being met, and vice versa.

Inman contributor Jenny Usaj, broker/owner of Denver’s Usaj Realty, believes agents need to be as upfront as they can, as soon as they can, about what they provide, who they are and how they conduct business.

“It’s important for agents to level-set with clients and allow us to guide a seamless home sale or purchase process with their best interests in mind,” she said. “For first-time buyers, it’s especially important to discuss the current challenges in the market.”

First time buyers can be especially valuable referrals, because you’re working with them at the onset of their real estate journey.

“Expectations can sour in a limited inventory market, but you can manage this dynamic with transparency, trust and preparation,” Usaj said. “Invest upfront in setting the expectations for clients and your partnership is far likelier to be more successful, effective and enjoyable experience.”

Begin every deal with the mindset that this won’t be the only time you help these people buy or sell a home, an approach that in a few years, will result in you not having to rely on as much marketing to find new business — because you’ll be recommended.

Additional resources:

Online reviews and testimonials

Getting reviews on the major platforms

Remember, the first thing a potential lead is going to do when your customer mentions you is head to Google.

According to Search Engine Roundtable, it was shared on Twitter — way, way back in 2018 — that Google revealed 46 percent of its searches have local intent. And ChatMeter reported that “near me tonight/today” searches grew by 900 percent from 2016 to 2018 alone.

Google My Business profiles have skyrocketed in importance to all businesses. Real estate agents and brokerages are no exception. Thankfully, they’re very easy to create, they demonstrate legitimacy, and they will help those you ask to refer you be that much more confident in your business.

Then there’s Yelp, which isn’t only for coffee shops and hotels. All kinds of service professionals leverage its online ratings to buoy their reputations. It’s a good place to start, but not the only game in town. In fact, Hubspot places it at only No. 9 on its list of business and product review sites.

You don’t need to have a presence on every review resource to earn referrals, but it will help to have your name on a few of the most common ones.

Your leads want what’s called “social proof.” We seek the approval of others — it’s psychological. That’s why online reviews have become so incredibly popular.

Leveraging testimonials

Your own website is also a terrific place to use as a central hub of client testimonials. Create a system using a simple HTML form you can email to clients right after closing, using JotForm or Google Forms, for example.

Set it up in your CRM’s email scheduler and monitor its delivery. When returned, get it on your website. (Jump ahead to the “The ask” section of this handbook for more on how to manage the referral request process.)

Getting social

Facebook is also crucial these days for online reviews. Maybe kids and some big advertisers have abandoned the social media giant, but people who want to know who you are sure haven’t.

The social network makes it easy to add a platform for reviews on your business page. Start by editing your page in “settings,” then add a tab, and select “reviews.”

Understanding portal reviews

Reviews on the major portals, such as Zillow, Realtor.com and Homesnap (Homesnap Pro customers get Google My Business profile services as part of their account) tend to be associated with your level of advertising spend. If you do advertise, take advantage of their review solicitation resources.

As part of its new effort to create agent and consumer service apps, Zillow now allows all agents to create profile pages on its site. Use that to your advantage to expand your online footprint.

Online reviews are critical to the referral business, but you can’t ask your clients to copy and paste what they say about you on every possible review site — because there are so many of them.

You have to strike a balance between where your customers place them and where you do it for them. Make it as easy as possible and know that you’ll have to ask multiple times.

If you’re looking for some technological support to earn online reviews, check out Podium, Feefo, RealSatisfied and RateMyAgent.

Be wary of technology platforms and consumer-facing service ranking sites, such as HomeLight, Home Captain and others that will push your name and face for a fee. That’s not really a referral or a ranking; it’s advertising. Those are paid leads.

Additional resources:

Sphere of influence marketing (CRM)

Earning referral business is a multifaceted affair, and making sure your professional circle knows you’re still in the business is a critical part of it.

If you haven’t yet, rest assured the day will come when you find yourself watching an acquaintance, long-time friend or business contact close on a home without you at their side.

Their excuse? “I didn’t know you were still in the business,” among others.

Don’t give anyone in your database the opportunity to say that to you. Stay in front of your sphere of influence.

Thankfully, your CRM software can make this easy for you.

If you haven’t already, create a separate list for contacts you know to be well-connected and in some way influential. Include the attorneys you’ve worked with and lenders with whom you have closed deals over the years.

The key to effective email marketing is segmentation. Do not assume that everyone wants to hear the same message.

When reaching out to your new “referral list,” know that the messaging can be simple. Don’t treat them like leads; treat them like business equals.

Share higher-level content that accomplished professionals can relate to, and leave the regurgitated listicles about spring decorating and cutesy holiday wishes to long-term nurture lists.

Do not be afraid to include a footer in every email about how much you appreciate their opinion of your work and how you would treat their customers as well as they do.

People want to refer others they can trust, so work hard to be inside their sphere of influence as well.

Relative to technology, know that some CRM systems don’t include lead generation. In truth, the concept of customer relationship management in business doesn’t traditionally deal with new leads; it’s closer to inside sales, account management and customer service.

Cloze, PureAgent, First, Buffini Referral Maker, MoxiEngage and kvCORE are just a few that have dedicated functions for remaining in front of people whose word can drive your business.

Additional resources:

The ask

One of the most successful (commercial) real estate agents I know once told me, “If you don’t a-s-k, you don’t g-e-t.”

When it comes to referrals, it never hurts to simply ask for it.

Agents wanting to transition from paid or earned leads to referrals would be wise to spend a few minutes each day on the phone with clients and colleagues. Remind them that you’re still in the business and that, if they know of anyone, you’d welcome their call.

It shouldn’t be an uncomfortable discussion. After all, you’ve already earned that person’s business.

But if your brokerage has any resources for scripts, see what it offers for referral requests.

And as with all professional scripts, use most of them as an outline. People can smell overly scripted calls before they pick up the phone, especially given the rate of today’s spam calls. Pepper in your own tone and terms, and don’t force the conversation into getting the answers the script says are required to be successful. Your goal is simply to let people know you’ll do a good job for the people they know.

Set up a single week each month in which you make five referral calls each day. Even if every call is a voicemail, by Friday afternoon, 25 of your contacts will have your name top-of-mind when it comes to real estate.

Do the same thing in an email. ReferMe IQ is a smart, simple tool for automated referral request campaigns.

Whereas SOI (sphere of influence) campaigns are about establishing a long-term dialogue, referral asks should be more direct.

Pat Hiban, previously an agent and now a podcast host and consultant, wrote in 2019 about referrals in his Inman column:

“Instead of simply asking your contacts if they know someone who’s looking to buy or sell real estate, you should program them to think of you whenever a conversation related to real estate comes up.

“To do this, think about what these conversations will likely consist of considering what’s going on at the time. Tailor your calls, texts and mailers to match so that your contacts will instantly think of you in the event that the right conversation comes up.”

According to the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers,”38% of buyers used an agent that was referred to them by a friend, neighbor, or relative, 12% used an agent that they had worked with in the past to buy or sell a home, and 10% found their agent when inquiring about a specific property found online.”

Provided that your mail list has the numbers, if you followed Hiban’s advice on making referral calls every month, you will have armed up to 150 people to fire off your name as soon as someone around them brings up real estate (read the full article for the particulars).

Remember, it’s not only about asking those you’ve worked with in the past — you should ask other agents, too.

Reach out to anyone you may know in another market. To that end, if you don’t have a list of colleagues from around the country, start one.

Reaching out to other agents is a great way to understand the market as a whole, gain creative marketing insight, deal tips and, yes, referrals.

On an Inman Coast-to-Coast Facebook thread, multiple members directly referenced Inman Connect events as valuable sources of referred business.

Andrea Geller wrote, “A big part of why I have been so busy during Covid is referral business. Over the years, the relationships I have created through conferences like Inman Connect, the brands I [have been] associated with and my work with the Realtor association have continually sent business my way. It’s especially true now.”

Echoing Geller was Nikki Beauchamp, who cited the influence of reaching out to other agents as well.

“My greatest tool right now is my phone — I have been on lots more Zooms lately with other agents, touching base — hearing about trends in their markets,” she said. “Connecting on Facebook , Instagram, LinkedIn and Twitter. I have my database organized with tags to notate how I know people, from where and where they work so it’s easy to find them.”

Additional resources:

Brokerage networks

Referral power should be one of the first few questions an agent asks of a prospective broker. Why else would you give part of your income away?

Some brands are better at it than others, and some agents are better at leveraging it than others.

Compass makes nationwide cooperation a central part of the business plan, using internal technologies and outreach to encourage agents to work together. Its Private Client Network, for example, focuses on luxury real estate around the country.

Keller Williams’ networking efforts are expanding, largely due to the connectivity made possible by its technology products. In the Q1 of 2020, the company reported “16,569 live referrals were sent within the Keller Cloud, representing $4.5 billion in sales volume.”

“I also have a strong internal network, which is nurtured via our Brokerage Workplace network,” said Renee Funk of The Funk Collection, an eXp office in Orlando. “Every contact I have is managed via my CRM, including my referral partners.”

Regardless of where your license hangs, there’s a good chance you’re not doing as much as you can within your company. So, do more. Take initiative.

Assemble a performance resume, and get it in the hands of other offices. Look for relocation patterns, and make those places of origin your first target.

The Lake Tahoe region, for example, is one of several mountain resort areas experiencing a boom in urbanite influx. Aspen, Colorado, is another.

Nicole Blair is broker and owner of Team Blair Tahoe, a Compass office in Tahoe City, California.

“I would say at least 40 percent of our business right now is coming from referrals,” she said in a text message. “In the last 24 hours [as of July 9], we’ve had seven agent referrals,” she told me.

(Her next text was an exploding head emoji.)

Agents in similar markets should be on the phone with fellow agents as often as they are with their past clients asking for referrals. Start dialing.

Agents under independent brands are by no means excluded from this networking benefit. After all, agents won’t send a client to another agent they don’t trust, regardless of affiliation. Be the name they want to be associated with. And again, ask for their business, show them how you get deals done.

In the aforementioned Coast-to-Coast thread, Emmary Simpson of Better Homes and Gardens Real Estate, Steinborn & Associates, said a good deal of her business came from out-of-market agents.

“When I lived in Tucson, 75 percent of my business came from Phoenix agents in an Arizona FB [Facebook] group.”

Ultimately, it’s always best to have the confidence of the agent who worked with the referred lead. Their recommendation has more value to the buyer and to you.

Courted is an app that empowers agents to connect with one another based on in-depth performance data, gathered from regional MLSs. Think of it as a LinkedIn specific to real estate. It’s worth a look, and centered on a referrals and recruiting.

And while the United States sure is a big place, it’s not the only country from which new clients emanate.

If you happen to have any international colleagues, let them know you’re the person for their relocating, immigrating friends and clients. Understandably, the pandemic and government actions has made legal immigration more challenging. But, that means you have more time to build your reputation.

The Covid-19 economy has also made working at home a national norm with some companies. Consulting firm McKinsey studied new flexible work models, finding that 58 percent of those surveyed have the option to work from home at least one day a week.

However, with remote work now commonplace, tech workers in pricey urban markets may be seeking a quieter, more affordable lifestyle. Have you contacted their companies yet to ask HR if you can be of service?

From Amazon to Uber, large tech providers are provided a range of discounts and marketing partnerships from adjacent coffee shops and national hotel brands. There’s no reason your name can’t be on that list.

Additional resources:

Market targeting

Geographic farming works for referrals, too.

As you would brokerage network referrals, don’t be afraid to add cities outside of your market area to your prospect pool.

It can provide you a distinct advantage to focus on a specific neighborhood in your market when targeting nearby markets.

This can help solidify your place as an expert and limit your competition, but it’s especially beneficial in becoming top-of-mind. In essence, potential leads and those referring you have less to remember about you.

Technology tools such as Prospects Plus, RealtyPilot, and Zip Your Flyer, are fast, creative ways to directly target agents and service professionals in other markets.

Also look into co-hosting a relocation event in any market known for relocating to your area. Contact an influential top producer — hopefully someone you know — about a free seminar on what’s it like to relocate to your market.

The format is simple: The on-site agent uses their list, and you handle the presentation. Negotiate a worthwhile split, and get to work.

If you do any internet advertising, consider a campaign in your targeted area. Find the right ZIP codes or demographic identifiers, and push your brand and relocation expertise. Adwerx, OutboundEngine, and Ylopo are some proven tools for reaching people and referral sources.

Although word-of-mouth referrals are not technically “paid leads,” you are paying for them with your time and effort. Paid digital campaigns and mailings do come out of pocket. Not everything in the referral business is free, but at least you’re not trying to directly outbid others in your market for leads.

You’d be hard-pressed to find any town in America lacking an organized economic development organization (like this one or this one). It’s their job to help people and business settle and grow. It’s your job to get in front of those people and businesses.

Most professionals in these positions are programed to remain neutral, but who’re we kidding? They’ll send inquiries to the agents they know. So be that person.

If you have to, take the right people to lunch, or give them a presentation. Let them know why you’re better than the agent they’re recommending at the moment. At the very least, ask for a chance.

People from out of town are going to look you up on the web, proving again the importance of having those online reviews and Google My Business profile intact and up to date.

To reiterate, referrals aren’t easy to get or maintain.

But you’ll never evolve to rely on them if you don’t make referral business as deliberate a marketing effort as generating new business or servicing your current transactions.

Additional resources:

Tech tools:

Courted
RealSatisfied
HomeLight (advertising)
ReferMe IQ
RateMyAgent
Podium
Feefo

Have a technology product you would like to discuss? Email Craig Rowe

Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.