Getting More Referrals for Your Real Estate Business Easily

Harness the Power of Word of Mouth Marketing With This Guide

Jacqueline Kyo Thomas

Jacqueline Kyo Thomas


Did you know that referrals are the number one way to grow your real estate business?

Research shows that as much as 82% of real estate sales come from referral marketing. An endorsement from a previous client, fellow agent, or personal contact is money in the bank. Because you’re relying on your personal and professional networks to tell others about you, you’re harnessing the power of referral marketing. And because you’re piggybacking off of their reputation, you’re instantly more trustworthy with your prospective leads.

Referral marketing generates a better quality of leads and will grow your business exponentially.

So, how do you increase the number of referrals in your real estate business?

In this post, we’ll help you implement a referral marketing strategy that will continue to grow your client base. Let’s get started.

Referral Marketing Vs. Word of Mouth

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Before we dive in, let’s discuss the distinction between referral marketing and word of mouth (and why it matters).

Word of mouth is organic and can’t be controlled. For example, a client is happy with your service and then they tell others about you. Word of mouth can also be negative if someone has a bad experience with your service.

Referral marketing is strategic. In referral marketing, you implement certain tactics to encourage word of mouth.

As you’ll see, although the two seem similar, they’re actually different.

Because so much of your business relies on referrals, you can’t afford to cross your fingers and hope that others spread the word about your service. You must create a repeatable system that will produce a steady stream of leads, i.e. referral marketing. Below, we’ll focus on the ways that you can actively create referral leads.

Ask for Referrals

The first step is also the hardest: The Ask.

While you may luck out and get a glowing recommendation from a previous client, you can’t depend on it. If you want referrals, you must ask for them.

Tell everyone you know that you’re accepting new clients. Otherwise, they may not even think about it. And don’t just casually announce it. Be intentional with your ask. Encourage them to either tell others about you or ask them to give you the name/ number of someone who needs your real estate expertise.

If you get a potential lead, ask for permission to share their name when you do reach out.

Define Your Ideal Client

When asking for referral leads, be sure to paint a picture of your ideal client. This is even more important if you work in a particular niche, such as property type or location.

By defining your ideal client, your referral source will remember you when they come across a person who needs your help. Your description will act as a trigger.

Ask at the Right Time

There is a right time and there is a wrong time to ask for referrals.

Wrong time: Asking too early Right time: When your client is happy with your service

You don’t have to wait until closing to ask for a referral. You can also ask after they’ve found the perfect house or after they’ve entered into contract with a buyer. These are happy times when your client is on a high. Capitalize on this moment by asking them if they know of anyone who can use your services. This will activate the referral mindset. Later, you can follow up and ask for specific names and contact details.

Personalize Your Ask

Just as important as when you ask is how you ask. Don’t ask everyone for recommendations in the same way. A generic appeal fades into the background. If you want people to act, take a personal approach.

There are several ways to do it:

  • Send a handwritten letter
  • Pick up the phone and call the referral source directly
  • Prepare a pre-written email and ask your referral source to send it to their contact(s)

Invest in Relationship Building

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You can’t get referrals if no one remembers you. Before you leverage your network, invest in building strong relationships.

There are three main groups to invest in:

Former Clients - Former clients aren’t just referral sources. They’ll likely need your services in the future when they need to move or sell or both. You can invest in former clients by:

  • Staying in touch every year on important dates (such as birthdays, anniversaries, holidays, etc.)
  • Sending handwritten notes and celebration cards
  • Asking former clients to sign up to your email newsletter so that you can keep them up to date
  • Taking them out on coffee dates to catch up

Fellow Agents - Become friendly with other real estate agents in your brokerage so that you can share leads. You can also connect with agents from other cities and states. They may have referrals who are moving to your area. Stay in touch over email and social media. To meet these agents, be sure to attend networking events in your city, national trade shows, and connect on Facebook groups.

Industry Professionals - Also connect with other professionals in the real estate industry such as appraisers, attorneys, bankers, construction company owners, home inspectors, lenders, movers, mortgage brokers, etc.

By investing in these relationships, you can stay top of mind.

Schedule Follow-Up Contact

Don’t ask for referrals only once. The magic happens after asking several times.

Be sure to schedule follow-ups in your calendar. Consistent contact allows you to build meaningful relationships with people in your network. By adding these follow-ups to your calendar, you won’t forget to reach out.

You can also tag contacts and create events in your CRM (customer relationship management software). Then, your outreach can be more hands-off and automatic. But don’t forget to add a personal touch when you do the follow-up.

Ask for Testimonials

Another way to activate referral marketing is through testimonials. When incorporated into your marketing materials, testimonials act as social proof.

Ask previous clients, fellow agents, and other industry professionals to write up a quick recommendation about you/your services. Then, with their permission, add those testimonials to your website, social media posts, email newsletters, direct mail postcards, flyers, and other marketing materials.

Another option is to record a video testimonial that you can share with prospective leads through YouTube, Instagram, Facebook, your website, or email.

Return the Favor

Treat others how you’d like to be treated. In addition to asking for referrals, give them, too. Share leads with fellow agents. Refer new clients to local businesses in an area where you have established relationships. Post reviews. Give shout outs on social media. Recommend on LinkedIn. All of these actions help you build a strong referral network, and people will remember you when the time comes to refer others to your real estate business.

Give Branded Items

Give the gift that keeps on giving: Branded items. From t-shirts to tumblers, there are tons of useful gifts that you can give to your network that serve as advertisements. A colleague using your branded pen or wearing a hat with your logo is referral marketing at its finest.

Times you might offer branded items include:

  • During a meeting (Instead of business cards, think magnets)
  • At closing (Include a branded keychain for the new homeowner)
  • At a networking event (a branded pen)
  • To commemorate a special occasion (a high-quality hoodie)

Avoid Referral Fees

Depending on your state, there may be rules against paying a referral fee to someone without a real estate license. Stick to the above tips, and don't try to incentivize referrals with cash.

What’s Next?

It’s time to set up a referral marketing strategy. Be sure to download our helpful resource at the end of this post.

Also, check out these related resources:

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