When it comes to mortgages, Mike DelPrete writes, online lead generation is certainly a piece of the puzzle, but it pales in comparison to the power of referrals and existing relationships.

This article was shared here with permission from Mike DelPrete for Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

A lot of industry discussion revolves around online lead generation, but when it comes to real estate transactions, especially mortgage, the majority of business comes from referrals and existing relationships.

Why it matters: Online leads are exciting, but the data reinforces how absolutely critical relationships are in the real estate industry.

Dig deeper: The following data from STRATMOR asked 82,000 recent homebuyers how they found their lender.

  • Fifty percent found their mortgage lender from a referral and 37 percent from an existing lending relationship.
  • That’s 87 percent of new business coming from offline, person-to-person relationships — a loan officer’s sphere of influence.

The theme is international, too: Poland’s second largest mortgage broker, Lendi, reports that in 2024, 60 percent of its 40,000 transactions originated from the loan officer’s referral network.

  • Assuming that equates to a “Realtor referral” or an “existing lending relationship” in the corresponding STRATMOR data above, the breakdown is very similar: 60 percent vs. 67 percent.

The power of referral translates to brokerage, too.

  • The following data from Austin brokerage Bramlett Partners, consisting of over 750 transactions from 15 agents, shows that 61 percent of closed deals came from an agent’s sphere of influence (referrals and existing relationships).
  • Note: this is one, small dataset and not necessarily representative of the entire industry — but the theme is similar.

The bottom line: This is a timely reminder that in real estate, it’s not just about what you know, it’s who you know.

  • The data reminds me of a previous analysis, Ecosystem Disruption in Mortgage Looking Exceedingly Traditional, that highlights just how important offline is in the mortgage business.
  • When it comes to mortgages, online lead generation is certainly a piece of the puzzle, but it pales in comparison to the power of referrals and existing relationships.

Mike DelPrete is a strategic advisor and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.

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