Building A Referral Based Real Estate Business – Part 1 Asking for a Referral

This article is part 4 of our mini series, “Building a Referral Based Real Estate Business“. You can visit the other parts of this series by clicking the links below:

• Building A Referral Based Real Estate Business – Part 1 Asking for a Referral
• Building a Referral Based Real Estate Business – Part 2 Written Communication
• Building a Referral Based Real Estate Business – Part 3 Scheduled Mailings
• Building a Referral Based Real Estate Business – Part 4 Follow Up

There is no doubt that for a Real Estate Agent, there is no better business than that run by referral.  What is a referral?  Aside from a great compliment to you, it is your client having enough faith in you and your abilities to tell their friends, family and coworkers to use you for all their Real Estate needs.  Think about this, when you pick up a new client, you spend a lot of your time explaining the way you do business, building rapport and establishing trust – the basics for a good business relationship.  A client that has been referred to you by a valued client already trusts their friend/family enough to ask for their opinion, so you have some trust already built into your relationship, they have heard about how you do business.  This makes your initial business dealings easier, as well as making client retention a bit easier.  A client that is committed to you, via a referral is less likely to be shopping around from agent to agent.

Asking for a referral is perhaps the most difficult part of building your referral business, many people have a great deal of difficulty asking for things, they fear being rejected.  But considering that for years, cold calling has been the back bone of this industry, cold calling is the very definition of rejection, asking for a referral  should be a snap.  After all, your friends, clients, and family already know you, they know how you do business, they know your commitment to client service and support.  They have trust in you.  If they haven’t already given you a referral, maybe it is because they don’t know you would appreciate their support in your career, in other words you haven’t asked.

The first time you ask a client, friend or family member for a referral it should be in person.  Be aware of the mood of the person you are speaking to, you really don’t want to ask your client for referrals if he is having a bad day – timing is everything.  For clients, perhaps the best time to ask for referrals, is when their purchase offer has been accepted.  Or the day their purchase closes and you are giving them their keys.  I usually bring up the fact at our very first meeting that I run a referral based business, and let my clients know that I would be thankful for their referrals.

How do I ask for a referral?  I find it easiest to explain in part how I do business (again) which leads into asking for a referral.  Something like this “As you know my business is built on referrals, if you know of anyone who would benefit from my services, I would be happy to show them the same high level of service that I have given you.”

When you are speaking with friends and family, you can be a bit less formal, but you must remain professional.  Saying something like “If you have any friends or family who could use my Real Estate services, please let them know.  I’d love to have clients just like you.”

It won’t be easy to start, but will get easier the more you ask.  Don’t feel that you have to use my words.  Be yourself, after all that is who they know.  Make sure they know that you value them, by including a thank you in your statement.

One time won’t do the trick here, well – you may get a referral right off, but after that – people get back into the grind of daily life, and forget that you asked for referrals.  To avoid the out of sight out of mind mentality that most of us reside in, you must stay in contact, and you must continually ask for referrals.  You are basically training your client to think of you, every time Real Estate is mentioned.

Your correspondence should also include a request for referrals.  Include it in your email signature, have it written on your business cards**, write it in your letters, make a sticker that you can use to close your envelopes.  When you send out cards or other written correspondence make sure that you include two business cards in each piece, that will give your clients a card to give to their friends or family.  When you speak with your clients and friends reinforce your request for referrals.

You get a referral, now what?  Two things, first and foremost, thank who ever gave you the referral immediately (do not wait until the new client buys something, don’t wait to find out if they are really going to buy or are just shopping – this isn’t about them, it is about thanking the person who gave you the referral.  You should wait no longer than a day from receipt of the referral before you send out your thank you), a hand written thank you note, with a token of your appreciation and two business cards.  The token can be anything, movie tickets, gift cards for dinner, home improvement stores, kitchen stores, etc.  Just something to let your client know that you have received their referral and that you appreciate them thinking about you and valuing your services.  Second, make sure that you give your new client (the referee) the best service you can.  After all, that is what they are expecting, you were highly recommended to them by someone who’s opinion they trust.

This is your first step into building your Real Estate referral business.  As a Real Estate Agent, it will make your life not only easier, but your clientele some of your best supporters and advocates.  A word of mouth business is worth more than any amount of advertising that you could ever purchase.

Get out there and ask for referrals.  It is a humbling experience, but well worth it in the end.

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