The holy grail in real estate is building a referral-based business. Cold-calling or door-knocking is no longer necessary. You’ll get the leads when you create a referral-based business.
How can you create a referral-based business in the real estate industry?
How To Build A Booming Real Estate Referral Business
This post will cover several ways to start growing your real estate business referrals instantly. You can choose one of the ideas for a quick boost or implement them all to maximize referral power.
Overย Communicate
The biggest complaint of buyers and sellers is that real estate agents need to communicate better. Communication is key to building a referral-based business.
You know the way these transactions work. Your clients (very likely) do not. You’re in the thick of it every day. But your clients will only ever buy or sell property a few times. They’re also nervous because they have a large amount of money on the line. Pretty much always.
Real estate agents who are good at their job will accommodate and understand this.
Set expectations early so that your clients understand how things work and how long they usually take. Communicate regularly. Even if you have nothing to report. For example, you can send a text to your clients to let them know you have followed up with Title Rep and that, even though there is no news, you will continue to follow up. Never let your clients think that you have forgotten them. If your clients or another agent reach out to contact you, respond ASAP. You can reply immediately, even if you have to look up the answer.
Offer On-Going Real Estate Related Services
Offer on-going service. This is something that you rarely see an agent do.ย Once the transaction is completed, most agents are done with their services. This eliminates all chances of earning referrals.ย You could offer a variety of services, from the most basic to the most sophisticated. We’ll discuss some options.
Provide Regular Market Updates for Free
It’s a no-brainer to offer free updates if you haven’t already. You only need to send out an email every month with updates on the market that are relevant. Relevant means that you should know the needs of your clients and include them in your updates. You can ask your clients to share their long-term goals. Keep them informed about the housing market and when it is a good time for them to purchase. Keep them informed about suitable locations for a parent who plans to move. Maybe they are interested in investing in additional real estate; add them to your investor’s mailing list!
Finally, consider offering to assist the client’s family and friends. You could say, “Please let me know if you have family or friends who are interested inย New York’s real estate market.” You can also send them monthly market updates .”
Property Tax Reviews
Listen to me because this is an AMAZING opportunity for agents who are savvy to:
- Provide on-going value to their clients.
- Be a hero and help your clients save on property taxes.
- Create a new income stream that produces great in a declining market when you need money the most!
It’s easier than you think!
You could offer to check the accuracy of your client’s property tax every year for free. This takes only a few minutes per property (in most cases, less than 30 seconds) if you understand the market well. You only need to compare the assessed value per square foot (PSF), which is the value used by the Assessor for property taxes, with the market value. You’ll know the average PSF value for real estate in the micro-markets you operate in, so you can quickly determine if an assessment is too high or too low.
You can send a letter to your client informing them that, as a service, you have reviewed the new property tax bill and determined that it is reasonable. Let the client know that you will continue to check every year to ensure they are not over-taxed. This is another opportunity to ask your client to let you know if anyone in the neighborhood is looking to sell or buy a house. You’d be happy to assist them.
You have an opportunity if the value of a property is excessive. It happens more often than you think (usually during a flat or declining market, when property values don’t increase as quickly as the Assessors’ office anticipated). You can tell clients they are being overtaxed if the value is high enough. You can also help them reduce their tax bill by offering a service.
It is easy to reduce a tax bill by showing the Assessor their value is excessive. This usually requires filing an appeal and providing a custom CMA showing the fair market value (Very few jurisdictions require an appraisal!). Your client will pay less tax once the property taxes are reduced for the year (You get a percentage of the savings as a fee for your service).
You can use this time to remind your clients you are working on referrals. Who wouldn’t be raving about a real estate agent that just got them their property tax refund?!
Pro Tip: Even if you don’t have clients looking to sell or buy, your clients may know someone interested in having their property tax assessed. You can start a relationship with these homeowners by introducing yourself. If you can earn their property tax work, that’s great, but even more so, if you want to be their agent for their next real estate transaction, it is even better!
Show Your Appreciation For Their Business
This is not something that comes as a given. If you want to get their referrals, you must show appreciation. Some agents don’t give closing gifts because they think it is unnecessary, but the logic behind small gift-giving is beyond dispute. Another fact is that closing gifts are a tradition in the industry. You’ll likely be expected to give one, and you will want your clients to be satisfied.
Showing your appreciation is easy with a closing gift that is impressive and affordable. Not a generic bottle of wine or a gift basket that your clients will discard if they receive them. A gift that will last and be talked about by your client’s friends and families is the best. Make it more personal and less practical.
Get People Talking
Asking for referrals is great, but you will only be mentioned in the conversation if they are discussing real estate with their family and friends. How can you make people talk about you?
Just a few moments ago, we discussed the topic of closing gifts. These could be good conversation starters:
Where did you get that cool picture?
When we bought this house, our real estate agent gave us that gift.
“Wow! We were considering upgrading to a larger place. Did you like your real estate agent?”
“Yes, our agent was awesome. Here, I will give you their contact information …”
A larger reach is better. Here are some brilliant ideas that will get people talking.
Preemptively Send Somethingย
Instead of waiting for your clients’ guests to arrive at their house, start the conversation immediately after closing. The office or workplace likely has a lot more traffic than their home.ย
Send your client a bouquet (flowers, balloons, or fruit) at their office as a way to thank them for a referral, celebrate the close of the deal, or show appreciation. Every co-worker will naturally ask, “What is the occasion?” and your client will mention you.
Offer Updated Home Photo Shoots
Do you want your clients to mention you on social media? Offer home photo shoots. You can have professional photo shoots of your buyers in their new homes (similar to modern family or engagement photos). These are the photos that get shared by your buyers!
But don’t offer it for free. (Although that could be a great differentiator if you want one!) This could be offered as a paid-for service. The younger your customers are, the more likely they will jump at the chance to document their big accomplishments. This could be offered as a paid option by you. You could also partner with a professional photographer to split the fees.
Ask your clients to use your hashtag or tag you when they post.
When It’s All Said And Done
Building a referral business can take time; if you aren’t growing your pipeline, it’s likely drying up as you read this article. Choose one of the ideas from above (or your own variation) and build that repeat and referral business that the best agents in the business already have!
