When you ask veteran real estate agents where they get their business from, almost all of them will tell you they get most of their business from referrals.  Here’s the dirty truth about real estate agents – very few of them are getting as many referrals as they should.  It does seem like once you have been in the industry for a five or ten years, you should be getting all of your business from referrals.  There is a simple reason why that doesn’t happen…Because many agents do a terrible job in handling referrals.  What do I mean by that?

Let’s say your friend, Amber, has a friend, Bob.  Bob wants to sell his house, so Amber recommends you and gives you Bob’s contact information.  Presumably, you will do a good job helping Bob sell his house.  You will do the thorough CMA.  You will do the professional photography.  You will post it on the MLS.  You will send it to your database of buyers.  You will work diligently to get the house sold.  When you get an above-listing-price cash offer, you will make the closing easy.  You might even help Bob buy a new house and represent him in that transaction as well.  You will give Bob a thoughtful closing gift, cash your commission check, and move on to the next transaction.

Was Bob your only customer?  No.  Amber is a customer too.  You need to follow up with Amber and let her know how much you appreciate the referral.

If Amber is not a licensed agent, and therefore not getting a commission, I would thank her when she gives you the lead and once the transaction closes.  If the referral comes from another agent, that person is interested not only in you servicing Bob appropriately, but also in their referral commission, so I would follow-up throughout the process.  Send them a note after you sign the listing contact.  Let them know when you sign a sales contract.  Contact them again when you actually close.  If there are any snags in the process, let them know about it but more importantly, let them know that you’ve got it covered.   Each time remind them how much you appreciate their referral.

The primary purpose of the follow-up is not so much to tell the referral partner what is going on in the process, but to let them know how much you appreciate that they trust you in this referral and that you are handling it competently.  If you do this, I can almost guarantee that you will get more referrals.

As a real estate school owner, I frequently have brokers contact me and ask me to send them new agents.  There are some brokers who call me every few months to see how I’m doing.  They thank me profusely when I send them an agent.  They send students to me.  They send me their brokerage swag.  Basically, they make sure I know they appreciate me.

There are other brokers who, when I ask them to mail me some business cards to have available for students, cannot make the effort to do that.

Who do you think I send my students to?

The things that get rewarded, get done.  If you want more referrals, be sure your referral partners know how much you appreciate them for referring people.

Please note that Karen Climer has no affiliation with Climer School of Real Estate.  Her father, Ron Climer, sold Climer School of Real Estate in 2014.  It has since been involved in several mergers and acquisitions and is owned by a large investment company.  Karen owns Demetree School of Real Estate in Orlando, Florida.