Referrals can be a big source of a real estate agent’s business and can be key to keeping your business flowing year-round.
About 40 percent of the real estate agents recently surveyed by the ReferralExchange and the Council of Residential Specialists say they receive about one to five referrals per year. Another 20 percent say they receive six to 10.
Inbound referrals tend to result in a closed transaction the most. The highest rate of success in closing a transaction is when a referral came from the agent’s own sphere of clients, according to the real estate professionals surveyed. The next best referrals came from referral sources like their brokerages and corporate referral sites.
More than 40 percent of survey respondents reported that more half the referrals they send out result in a closed sale. Another 20 percent estimated that they see a quarter to half of their outbound referrals close.
The main factors that determine whether a referral will close include the seriousness of the client about buying and selling; their connection to the person who referred them; and whether they trust the person or system who referred them.
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“The greater the connection to the source, the more likely the referral is serious and will lead to a closed sale,” the study notes.
The majority of the inbound referrals real estate professionals say they receive come from their sphere (40 percent) and from other real estate professionals (37 percent). Nearly 90 percent of the referrals that come from a real estate professional’s sphere come from current and past clients; another 10 percent come from friends and family. An additional 22 percent of referrals come from various sources, such as corporate referral sites and the agent’s own brokerage.
“This data reiterates the value of vetting,” the study notes. “Whether referrals are qualified by the agent’s personal sphere or another trusted source — yes, even one on the internet — true referrals have legs. Relationships and human connections matter, certainly more than the slot machine that is Internet lead generation.”
By Melissa Dittmann Tracey for REALTOR® Magazine