As a real estate agent, you have probably noticed the shift that has occurred in the industry thanks to computers, the Internet and social media. This has also changed the way that you receive referrals. For those who are new to the real estate game, you might not see the change, but for those who have made real estate their career, you might need a refresher about how important referrals can be. Whether you are using social media and computer software for referrals, or simply taking advantage of opportunities that come to you, here are some referral statistics that you might not be aware of:
Much of the work you do as a real estate agent will be to sell a home for someone, but before you can do this, you must know how important a referral can be in this instance. Take a look at this statistic, for a moment:
• 42% of sellers who use real estate agents find these agents through referrals.
This is an important statistic for real estate agents for two reasons. First, because almost half of all people selling their homes are finding their agents through people they know. Second, you have an entire army of clients who you have worked with before during their sale that will be more than happy to refer you; they simply need to know you are looking. You can let them know through referral software and social media.
• 82% of all real estate transactions come from referrals.
Now we are really getting into the meat of it. When you add both buyers and sellers to the mix, you have over 80% of all business for real estate agents coming from referrals. If you aren’t using this to your advantage, you are really missing out.
• 88% of buyers and 82% of sellers would recommend and use their agent again.
How many past clients do you have in your database? Take 88% of those, and that gives you at least one referral from each of those people, and in most cases, many more. Business could potentially grow exponentially when using referrals.
What about other options for business? Some real estate agents rely on open houses, but this simply doesn’t work. In fact, look at this statistic:
• 65% of real estate agents never get business from open houses
Though many real estate agents put a focus on open houses when trying to sell a home, they simply don’t work to get new business. Open houses work well for selling a particular home, but not for future real estate businesses.
So, what should you rely on as a real estate agent for more referrals? The internet and referral software is your best bet:
• More than 60% of real estate agents who make more than $100,000 a year use referral and customer service software. More than 65% of agents who make less than $35,000 a year do not use referral and customer service software.
If you are surprised by these statistics, you are not alone. Many real estate agents simply are not aware of how important referrals, referral software and the Internet are to their business. According to these statistics, if you are not using this type of software to boost your referrals, you could be missing out on new business. In today’s real estate environment, the market is saturated with agents and you must stand out from the crowd if you are going to be successful. Referrals are the best way to do this.
Post author: Peter Velardi, CFP®