92% of respondents reported that a positive recommendation from a friend, family member, or someone they trust is the biggest influence on whether they buy a product or service.
~ Paul M. Rand, VP Communications @ University of Chicago
Real Estate Referrals: The Backbone of Realtors and Brokerages
Most Real Estate Agents complete nine out of every ten deals from their sphere of influence. This usually includes loved ones, friends, and past clients. Therefore, the amount of business you can generate from referrals is essential and should not be overlooked nor neglected, and yet, many Real Estate professionals do.
Word of Mouth
In the modern business world, 74% of consumers say that word-of-mouth is a critical influence on their purchases. ONE offline word of mouth impression increases sales by at least FIVE TIMES MORE than a paid advertisement. Consumers rely on word-of-mouth 2x to 10x more than paid media.
Real Estate Referral Fee
The standard rate for real estate referrals is 25% but this is just a baseline to work from. It can really be whatever you want it to be and can change based on the situation, the relationship of the people involved, and the market. If you want to maintain a good relationship with people referring your business, it’s probably best not to be cheap when it comes to a real estate referral fee. Take care of the people taking care of you!
8 Real Estate Referral Statistics you should take into consideration:
- The typical agent earns 42% of their business from repeat clients and referrals from past clients.
- 82% of all real estate transactions come from repeat and referral businesses.
- 21% of agents get more than 50% of their business from referrals from past clients.
- 25% of agents generate more than 50% of their business from repeat clients.
- 92% of consumers trust recommendations from friends and family above all other forms of advertising.
- 82% of real estate sales result from agent contacts through previous clients, referrals, friends, family, and personal contacts.
- 65% of agents get no business from open houses.
- 88% of buyers and 84% of sellers would use their agent again or refer them to others.
While marketing funnels, advertising, and prospecting can generate much business, there is still no channel as powerful as referrals and repeat business. Reaching out to your past clients and consistently touching base with everyone in your sphere of influence is an essential strategy that you need to have in place. It doesn’t have to be hour-long conversations or even face-to-face encounters. While those would work well, too, you can use the many means of communication available to set a healthy game plan to nurture your network.
People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.
~ Mark Zuckerberg, Co-Founder @ Facebook
4 Tips for a Healthy Referral Pipeline
- Start investing before the big sale. The relationship a realtor has with their clients is built upon every interaction they have, from beginning to end. Take advantage of every opportunity to strengthen that relationship, and establish yourself as not just a “salesman” in their life, but a friend who’s genuinely looking out for them. For example, gifts are often reported as a very effective way to do this. Celebrate every milestone on the journey to closing; did the seller pass inspection after a lot of hard work on repairs and upgrades? Send a bottle of champagne!
- Cultivate the relationship beyond the sale. The celebration doesn’t stop just because the deal closed. Part of building that relationship extends beyond the closing. You should be strengthening that relationship and staying ever so slightly on their mind, year round. You can do this by continuing to celebrate milestones, like the 1-year anniversary of when they closed on their new house for example. But don’t limit yourself, celebrate anything that’s important to your client too, like their firstborn or the opening of a business. Time for another bottle!
- Make it personal, for them. Okay sending a nice bottle of wine or champagne to celebrate milestones and wins is great, but what if they don’t drink? It’s important to keep the whole experience about them, not you. During the entire process, you should be getting to know your clients, so that you can tailor gifts and other experiences around their own interests and preferences. You can even send them a curated list of gift options for the right occasion. But don’t forget the personalized message! Gifts are great, but stories are forever.
- Host some killer events. What better way to get people talking than to bring them all to an open bar? Seriously though, a surefire way to get your clients buzzing is to bring them to an event they’ll be talking about all week. This can be in-person or virtual, but keep it relatively intimate. Only invite 10-20 past and current clients, not counting their partner or family. This empowers them to network with each other and gets everyone talking about it to their own friends and family afterward. You’ll be a household name in no time!
Once you have strategies in place, finding the time to put them into action is a whole other story. Having someone in your team who can put these plans in motion, consistently monitor them, and not just implement them but keep them moving can help you win those referrals and keep business flowing in. A MyOutDesk Marketing or Administrative Virtual Assistant can do that for you as you focus on growing your business and finding more people who will bring in more referrals.
If you have any questions about how our virtual assistants have played such a key role in the real estate referral game these days, use the link below to request a 1-on-1 Q&A session. No obligation, no pressure, we just like to answer questions. Our success is literally your success, so let’s be successful together.
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