Most agents aren’t asking for referrals the right way or sometimes at all. If you’re not actively (and strategically) asking for referrals, you’re likely missing out on dozens of deals each year. Here’s how to effectively leverage your sphere of influence to close more referral deals.
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If you’re not actively (and strategically) asking for real estate referrals, you’re likely missing out on dozens of deals per year.
According to industry veteran Dean Jackson, most real estate agents should be able to close at least 30 referral-based deals annually assuming they have a strong sphere of influence (SOI) and leverage it effectively.
On a recent podcast, I interviewed Jackson to find out more. In addition to breaking down essential parts of the referral process, he shared what he does to ensure close contacts always think to recommend him to those in need of an agent.
For details on how Jackson’s system for real estate referrals works (and how to make it work for you), read on. To learn what else Jackson does to generate transactions, including five ways he leverages listings for more business, listen to the podcast below.
Your sphere is a valuable asset
Even if you’ve built your business around a specific real estate niche, there’s nothing stopping another agent from tweaking their marketing materials to target your clientele.
There’s one thing, however, that no other agent can take from you: the relationships you’ve built. Your SOI is yours and yours alone, and it’s one of your business’ biggest assets. But if you’re like most agents, you aren’t treating it as such.
Instead of picking up a few transactions passively via your SOI per year, take a more active approach; it could net you 30-plus referral-based deals annually.
Jackson created a highly effective system for active referral seekers, something he calls “the 20 percent yield.”
The 20 percent yield
To use Jackson’s system for real estate referrals, you’ll need to put together a list of 150 people from your SOI. From these 150 people, you should be able to generate and close 30 referral-based deals per year — hence the 20 percent.
How do you decide whether or not a person belongs on the list?
It’s simple: If that person is someone who you’d stop and talk to at the grocery store, put them on the list. Once you’ve got 150 names down, you must overcome the belief that asking for referrals is weak, that you’re just begging for business.
According to Jackson, that’s faulty thinking.
Your sphere isn’t referring business as a favor to you; they’re referring business because of you.
All referrals, not just real estate referrals, happen because making quality recommendations is something that makes people feel good. The people who refer you to those in their circle do so because they believe that you’re a quality agent, so stop worrying about looking desperate.
How (and when) to ask for referrals
Even agents who are willing to ask for referrals tend to go about it the wrong way.
Instead of simply asking your contacts if they know someone who’s looking to buy or sell real estate, you should program them to think of you whenever a conversation related to real estate comes up.
To do this, think about what these conversations will likely consist of considering what’s going on at the time. Tailor your calls, texts and mailers to match so that your contacts will instantly think of you in the event that the right conversation comes up.
Do this each and every month. It’s not hard.
During April, for instance, you could focus on a tax-related topic. When a contact talks with someone who wants to put their tax refund toward a down payment, your name will automatically pop into their head.
As we move into summer, sweat-equity projects pick up, so that’s the time to let members of your list know that you’re the best agent for finding great deals on fixer-uppers.
You get the idea.
If you commit to doing this consistently, the 150 people on your list will be pre-programmed to give your name out whenever real estate comes up in conversation. As a result, you should have no trouble closing at least 30 referral-based real estate deals per year.
Learn more ways to get real estate referrals
Want to learn even more ways to generate real estate referrals? Listen to the podcast interview with Dean Jackson. In addition to other great techniques for bringing in referrals, Jackson shares five strategies that any agent can use to leverage listings for more business.
Pat Hiban sold more than 7,000 homes over the course of his 25-year career in real estate. Now, he dedicates his time to helping others succeed as agents and investors. As host of the Real Estate Rockstars Podcast, Pat interviews real estate experts to explore what works in today’s markets. He also founded Rebus University, an online training platform for real estate agents and sales professionals.