Real estate agents earned a median number of nine referrals in 2017, up from six in 2016, according to the second annual study on the “agent-to-agent referral economy” conducted by 1000watt on behalf of ReferralExchange. Moreover, the research revealed 42 percent of agents earned $10,000 to $50,000 in referral fees over the course of the year.
The uptick in referrals could be due to a variety of factors, including the inventory shortage driving real estate professionals to look for business outside of their sphere; certain markets experiencing heightened migration and heightened market activity; and brokerages increasing their focus on referral training, ReferralExchange vice president of marketing Lisa Fettner told Inman.
An agent’s sphere of influence — responsible for 80 percent of the referrals agents receive — remains the largest referral driver, said Fettner.
“Referrals are like eating your vegetables — you know that it’s important to eat your vegetables and that they’re good for you, but we don’t always eat enough,” she said. For example, if your sister knows you’re an agent, does your sister’s husband’s uncle know you can help with his next real estate transaction, too? If not, that’s a missed opportunity to offer your services, Fettner explained.
The research also showed that 83 percent of agents are members of at least one referral network and get at least 20 percent of their inbound referrals from those networks. Sixty-six percent of network members don’t purchase leads, which are defined as unqualified potential buyers and sellers.
Thirty-eight percent of agents said more than 20 percent of their referrals will close this year. Meanwhile, only nine percent of agents said more than 20 percent of their leads will close this year.
About the study
A total of 1,806 agents responded to this survey. Each respondent participated by completing an online survey, containing multiple choice and open-ended questions. We followed up with selected agents and interviewed them by phone. 1000watt, real estate’s leading brand and marketing agency, conducted this research.
The majority of agents who participated in the survey were members of the ReferralExchange Network.