If someone sends you a referral and you do a great job, the sender’s social status with the client you helped is enhanced. Conversely, if the transaction doesn’t go well, that status is diminished. This is why it’s so important to cultivate your relationships in a way that makes people feel it’s safe to refer you. Fear of loss is a much greater motivator than opportunity to gain. If there’s any reason to doubt your performance, people would rather not risk their reputation. The fascinating part of all of this is that it mostly goes unsaid. So, to generate more referrals you deserve, here are referral secrets of top producers.
People love to help other people, but they can’t read your mind. If you never ask for referrals, you’ll end up giving the impression that you don’t need any more business.
Rule 1: You have to ask
“Who do you know who is thinking of selling or buying a home in the near future?” That question or your variant is possibly the most important question in your entire career, and you cannot shy away from it. People love to help other people, but they can’t read your mind. If you never ask for referrals, you’ll end up giving the impression that you don’t need any more business. But I’ve never met an agent for whom that was true, so open up and give people the chance to help you.
Rule 2: Demonstrate the actions of an agent
You told people when you got your license, and now they’ll forever remember to refer you, right? Not so fast. Whatever you spent years doing just before you became licensed is how they think of you, especially in the beginning of your real estate career. If you were a teacher before you got into real estate, in their mind, you’re still a teacher. The single most impactful action you can take to change the way they see you is to demonstrate you’re doing the activities an agent does—and not just listings and closings. Think property tours, classes, open houses, and industry events.
Show people you are actively involved in your new industry and tell stories about your experiences growing your business. Slowly but surely people will start to take you seriously. But in the beginning of your career, or anytime you’ve been inconsistent, they won’t see you as a serious agent.
Rule 3: Teach people when to send you referrals
Handing people your card and asking them to pass it to someone thinking of moving won’t cut it. Instead, consider asking them to save your cards for people who experience a life-changing event. For example: “Here’s my card. Please save it for someone who is going through a big change. Give it to someone who tells you they just got a promotion or that they are having a baby.” Or you could tell people to mention you when they hear people are getting married, divorced, had a death in the family, sent the last kid off to college, or complain about all the yard work or their commute. You get the point.
Change (good and bad) drives the need for your services. Over time, you can teach people to recognize these triggering events so they are more likely to connect you.
Rule 4: Tell people what you do, not what you are
The last time someone asked what you do, did you tell them you’re a real estate agent?
Adjusting the way you answer could elicit some funny responses, and you’ll be simultaneously teaching them how to refer you. Imagine someone asking what you do, and instead you say, “I work with people who are getting divorced.” Very likely the person who asked will respond with, “Oh, you’re an attorney?” To which you can respond, “Oh, no. I’m a real estate agent, and I help divorcing couples sell their home without strangling each other.”
The key is to respond in a way that is unique to your personality and a tad more memorable than telling them you’re an agent.
Rule 5: Frequent and consistent contact is essential
In marketing, the rule of seven states that people need to see your message an average of seven times before they take action. Most people who suffer from a lack of referrals do so not because of the exact number of messages they send, but because their messages are irregular and don’t register with the recipient.
You’ll find lots of opinions about what you should send people, how often you should call, and what you should say. Pick whatever combination of marketing and pattern of delivery you want, but whatever you choose, it must be consistent and frequent, because in the subconscious mind, consistency equals trust.
Agents who send messages when they can fit it in their schedule or when they have extra money often don’t even realize they are broadcasting they are either broke or can’t handle their own business. All of this registers in the subconscious mind, and if people don’t trust you, you’ll never be referred. This is why communication of any kind that is poorly designed but consistent wins every time over the stunningly beautiful but inconsistent email newsletter.
Rule 6: Don’t stop
This rule is a bit repetitive with the rule above, and that’s intentional because it’s so important. You can’t stop until you retire or sell your practice. You can’t stop asking. You can’t stop teaching people how to refer you. You can’t stop showing them you are an active agent. Apple consistently advertises the iPhone, and if you notice, they also haven’t stopped. The most successful and recognized consumer device in the history of the world is still being consistently advertised. If Apple can’t stop, neither can you.
Rule 7: Remember they are taking a chance on you
Every time someone sends you a referral, they are putting their reputation on the line. This is especially true the first time. So if you want them to continue to send you referrals, you must always keep this top of mind. It’s not too difficult to get people to take a chance on you once, but if you don’t act in a way that enhances their reputation, you may not get another. The key word is enhance.
It’s not enough to do a good job for the client. That’s kind of like saying you should do a good job as a parent. A good job is the baseline. To encourage more referrals from the same source, you have to find ways to serve the client so well, the reputation of the person making the referral is actually improved because of your performance.
One of the best ways to do this is to speak highly of the referral source to the referred client. In addition to doing a great job for the buyer or seller, sneak in a few compliments about your referral source. You can be sure that, eventually, your new client is going to tell your referral source all the nice things you’ve been saying. Psychologically, this is infinitely more impactful than just giving the compliment to the source in person.
Rule 8: Reward the referral, not the closing
Whether we’re talking about children, pets, or clients, it helps to reward the behavior you want to continue. It’s a common practice for agents to send a thank you gift to referral sources after closing. But when people refer you, they have no control over whether a deal closes. People can control making the connection and that’s it. Sometimes it works out, sometimes not. If you want to send a gift after closing, fine. Just make sure you also thank the person in some tangible way immediately after they send the referral.
Rule 9: Communicate more than you are inclined to
It would be a huge mistake (and a missed opportunity to strengthen the relationship) to accept a referral, then fail to let the source know what’s going on. Clearly, it’s important to keep the details of your client’s business private, so think of it this way: Every few weeks you can send the referral source a message letting them know the work is progressing and you’re on it. Even if things have stalled out, it’s important to say so. If the referral source ever wonders what’s happening, you’ve waited too long and have probably broken trust.
A quick email or text once a week is enough to prevent anyone from ever wondering what is going on. The consistency also reinforces trust.
Rule 10: Don’t be afraid to decline a referral
You don’t have to work every referral sent to you. But you definitely should communicate with the referral source when and why you decline business. Remember, the goal is to make the source look great, and if you can’t, don’t want to, or aren’t truly qualified to work the referral, it’s OK to let the person know. This is your chance to show appreciation while reinforcing the message that you’ll only take on business if doing so will enhance their reputation. The end result is more clarity for them on the type of business you enjoy working.
Most people work business they shouldn’t because they fear turning it down will prevent the source from referring anyone else.
In reality, the exact opposite is true. When you work business you don’t want just because you feel like you have to, everyone is going to feel it. It may go unsaid, but under those conditions, it’s nearly impossible to do your best work for the client, let alone put in the extra effort to make your referral source look good.
Rule 11: Share good reviews with your referral source
One way to get future business from those who are researching you online is to ask for five-star reviews on Google and Facebook. Another way to leverage good reviews is to call attention to them with the source of the referral. A handwritten note with the review printed or an email with a screenshot is a great way to reinforce that you’ve made the person who sent the referral look fantastic.
Rule 12: Reciprocate
Does your referral source also own a business? Are they a partner at a firm? Ask what kinds of referrals they would like and stay super-alert for opportunities to send business their way. Of course, you’re sticking your neck out as well, so be mindful of their performance. Does their performance with your referral enhance your reputation? This process works both ways.
While paid advertising has its place in a modern real estate practice, most agents would love nothing more than to generate the majority of their new clients from referral sources. These are the principles that will make it a reality for you.
Gifts for referrals? Know the rules
You may give an unlicensed person a non-cash gift worth $50 or less in exchange for a referral and not violate The Real Estate License Act (TRELA) or Texas Real Estate Commission rules. According to TRELA, if a referral is made with the expectation of receiving valuable consideration, the person making the referral must be licensed under the act. Under Section 535.20 of TREC rules, gifts of merchandise having a value of $50 or less do not count as valuable consideration. A bank gift card that can be converted to cash or credit or any amount of cash or credit toward rent owed are not allowed to be used as gifts to an unlicensed person in exchange for a referral, according to TREC