June 21, 2016
The 3 Professionals Who Will Help You Generate Referrals and How You Can Engage Them
For many agents, referrals are at the heart of their lead-generation strategy. All too often, though, agents think in terms of getting referrals from people in their personal sphere of influence. This is a great tactic, since you are known and trusted by those people; for agents whose sphere may not be so large, it can be limiting.
A good rule of thumb is that if you have fewer than 50 people in your sphere of influence – defined as people who know you well, trust you, and would advocate for you to the people they come into contact with – then it will be important for the success of your business to increase your referral base.
One of the best ways to do this is by developing your professional network. This is a strategy that has worked well for many real estate professionals. One of the reasons it works is that you are creating mutually beneficial relationships. The ideal referral relationship is one where each person benefits from the relationship – where referrals can flow both directions. This kind of mutual benefit opens doors; getting in front of these people is fairly easy, since they will be just as interested in developing a relationship with you, as you are with them.
So what kinds of professionals should you be seeking out to develop a referral relationship with, and how do you approach them? Read on to learn how this strategy works!
Real Estate-Related Professionals
In every real estate transaction, there are a number of professionals and business owners who will be involved in making the transaction happen. These include mortgage brokers, home inspectors, repair people and handymen, escrow professionals, and more. You’ll be referring business to these people with every transaction.
Referrals can also flow your way if you select the right people to be your partners.
Who are the right partners? Not necessarily the most experienced professionals with the highest volume of business. Remember, the real estate industry has a very high burnout rate, and more established professionals may see a newer agent or someone they don’t know well as a risk. They’ll be happy to take referrals from you, but may not be willing to reciprocate.
A better idea, when you are a new agent, is to team up with others who are newer to the business, and help each other. A new mortgage broker will be more likely to reciprocate, and is unlikely to have already selected a real estate agent to whom they will refer the majority of their business. As you become more established, it will be easier to develop relationships with more established professionals.
It’s also important to remember that the way these professionals conduct their business will reflect on you, so make sure to find partners who are trustworthy and will do a good job with your clients.
Attorneys, Accountants, and Financial Professionals
In your real estate business, you will be dealing with all kinds of real estate buyers and sellers, from first time buyers, to investors, to retirees looking to downsize. Each of these people will likely have questions that are outside your area of expertise. That’s why it’s important to develop relationships with the people who can answer your clients’ questions. But don’t stop there – cultivating relationships with these types of professionals can also result in referrals in your direction.
Think about the different specialties within the broad categories of law and accounting, and how they might refer business to you:
- Divorce attorneys often have clients who need to liquidate their home. Those clients might also buy two new homes (although it’s unlikely you would be working with both parties, since divorces can be quite acrimonious).
- Probate attorneys may need to refer clients to a real estate agent to sell a home, so that the deceased’s heirs can split the proceeds.
- Accountants may advise clients to invest in real estate as a tax shelter, or they may be working with a property investor to perform a 1041 exchange, where an investment property must be sold, and a new property purchased within a set timeframe.
- Wealth managers may advise a client to move some of their assets out of stocks and bonds and into real estate for better returns, or vice versa.
Keep in mind that the transactions you’ll be dealing with from these kinds of professionals are likely to be more complex. Make sure you understand how these transactions work, as well as the needs of each client, before you take these referrals, as mistakes can cost you future business. It’s also important, before you refer to these professionals, that you understand and are comfortable with how they conduct their business. Both of your reputations are on the line with every referral.
Other Real Estate Agents
Real estate is a very broad profession, and there are a number of ways that you can go with your business focus. Some agents specialize in commercial, residential, or new construction. Others might specialize in working with investors, or condominiums, or build a practice focused on one specific neighborhood.
Never was the saying “Jack of all trades, master of none” more true than in the real estate business. One of the biggest secrets of the most successful agents is that they develop a specialty and focus their business on that. When it comes to business that isn’t in their area of expertise, they’ll often refer it to another agent for a negotiable referral fee.
Use this knowledge to your advantage, by working hard to develop positive relationships with other agents and setting up mutually beneficial referral relationships with them. If your specialty is first-time buyers in neighborhood A, establish a relationship with an agent who specializes in neighborhood B, or who works mainly with luxury home buyers, and you’ll each be able to build your business and collect referral fees for each referred transaction that closes, while retaining your focus on the clients you really want to work with.
How To Engage Your Professionals
If you select the right kinds of professionals to target, engaging them is easy. Simply call them up and offer to buy them a cup of coffee so you can get to know each other and see if there is a way to work together to help each of you be more successful. Most business owners are on the lookout for relationships that can help them generate referrals, so they will be happy to talk to you.
If cold calling isn’t in your comfort zone, another option is to meet these professionals through a networking organization, such as your local Chamber of Commerce or Le Tip. This allows you to meet more casually and get to know each other, before attempting to meet and establish a referral relationship.
Finally, it’s important to remember that how you conduct yourself in your relationship with these professionals will reflect on your business ethics. So make sure that your follow-up is impeccable. Using your KarmaCRM, make it a regular part of your business to meet with two new professional referral sources each week, and follow up with two others, so that you are always building new relationships and maintaining your existing ones. This keeps the relationship fresh and the referrals flowing.