How to Build a Reliable Real Estate Referral Network

How important are referral networks in the real estate industry?

Referral networks demonstrate the power of connection. People are more likely to trust your business if they were introduced to it by someone they already know and trust themselves. In fact, referred customers are willing to accept higher selling points and higher commissions. A Goethe University study discovered that referred customers are 18% more likely to stay with a business than a non-referred customer.

Obviously, referrals are powerful and can make or break a business. The importance of building a business network cannot be understated. Yet finding reliable referrals can be especially difficult now, with the usual outlets for connection being closed and many clients relocating to warmer, more temperate climates. Listing3D Exclusives, the newest agent referral network, addresses these problems by connecting professionals around the country with one another, facilitating business relationships and utilizing technology to improve customer experiences.

Real Estate Referrals: The Three Types

In the real estate industry specifically, there are three types of referrals that are utilized to provide leads. The first is perhaps the most obvious: people referrals. Quite often, these connections are friendly ones that develop into professional opportunities.

This may happen without you even realizing, such as bumping into an acquaintance at a get-together who just happens to be looking for a house. While these types of referrals are extremely useful, they can often be difficult to acquire, for they require having a large, well-connected network, which not everyone possesses.

The second type of referrals are business referrals. This involves connecting with another company and cross-promoting, using each other’s networks to advertise.

This method is especially relevant in today’s climate, where many businesses are struggling to stay afloat with local lockdowns and economic hardships challenging every company. Collaborating with a local business allows both businesses to promote their work in new networks for little to no cost.

The third type of referral hones in on agents specifically. Agent-to-agent referrals are a powerful way to get – and give – business to fellow colleagues. These types of referrals are relevant for every single agent.

For example, if your client is relocating to a new state, you can refer them to an agent who is an expert on that area. This not only benefits you, as you receive compensation for solidifying the connection, but you also match your client with the perfect agent, helping them find their dream property.

How do you build a referral network as a real estate professional?

Surprisingly, the simplest way to build a referral network is to do something you probably already do every day— create personal connections. Referral networks can also be developed by maintaining relationships with former clients and co-workers in the industry.

Local business networks and groups can be utilized to connect with like-minded professionals. However, though these techniques are effective, they are time-intensive and require a pre-existing group of connections that not everyone has.

Networks can also be developed through various commercial outlets. That includes house auctions, home and trade shows, Chamber of Commerce groups, Real Estate Investor Association (REIA) meetings, among others.

But during the COVID-19 pandemic, with many of these meetings online, creating genuine connections may be more difficult. Networking in general has become tougher because the usual places where individuals can meet and connect are temporarily closed. This shift demonstrates the advantages of already having a pre-existing referral network to rely on in times of difficulty.

Market Trends: Migration from the Northeast to Southern Florida

The New York City metropolitan area loses close to 270 people a day currently. While these trends are not new (NYC was losing around 100 people a day in 2018), these rates have accelerated as more people are saying goodbye to dense, cold, crowded cities and escaping to more temperate and spacious locations.

Americans are moving to the South and Southwest. Southern Florida is an exceptionally popular destination, with its year-round summers, low cost of living, and decreased population density, attracting tentative homeowners from around the country.

Now before all the agents in the Northeast panic over losing all their clientele, it is crucial to remember that agent-to-agent referrals allow you to benefit from your customers moving to a new area. By serving and connecting the client and the agent, the relationship you have invested in can still be beneficial for you.

Market Trends: Lasting Impacts of COVID-19

This pandemic has forever changed how humanity interacts with space, and more importantly, buys it. For perhaps the first time in history, there has been less demand for commercial real estate this past year than in previous ones. Offices have migrated to remote work as stay-at-home orders drag on.

Green Street Advisors, an intelligence firm providing market analysis on commercial real estate, reported in early April that the value of real estate has dropped by 25%, with a decrease in value at as high as 37% for lodging properties specifically. Due to the pandemic, there has been a decreased need for commercial office and shopping space, as people continue to work at home as much as possible and shop online instead of in
person.

With these radical shifts away from face-to-face business-as-usual, there has never been a greater need to modernize the real estate industry and provide the best – and safest – customer experience. Vaibhav Gujral, Aditya Sanghvi, Robert Palter, and Brian Vickery write in a McKinsey & Company article that even before the pandemic, “the real estate industry had been moving toward digitizing processes and creating digitally enabled services for tenants and users.”

Technology has historically been under-utilized in the real estate industry, but the pandemic has accelerated the adoption of digital tools. For example, by combining excellent marketing and innovations like 3D cameras, potential buyers can safely yet thoroughly explore their options. As stated in the McKinsey & Company piece, “those that haven’t yet made the investments [in technology] will probably need to catch up quickly.”

How do you build and maintain a network during a global pandemic?

Creating and nurturing a referral network during a pandemic can be challenging, since many of the traditional outlets for creating professional connections are closed or operating in a modified capacity. However, many of the same tactics can still be applied, just by using different tools.

An excellent way to build and maintain a professional network is by using social media to connect with friends and family and to remind consumers of your business. Additionally, asking for testimonials and referrals from previous clients is a great way to advertise your work.

Another method, especially relevant in the current landscape, is promoting your business while helping your community. This could mean collaborating with a local business to cross-promote or participating in community fundraisers and events. Finding ways to give back while advertising your business gets the word out while doing good.

Technology, time and time again, proves to be the solution to many of the challenges the real estate industry currently faces. With gatherings of people still limited, showing homes to prospective clients has never been more difficult.

But tools like videography, virtual reality, and high-quality cameras can step in and be utilized to create a compelling experience safely. Virtual showings are becoming more common, incentivizing agents to integrate digital tools to enhance their own business. Although COVID-19 will one day be contained, digital tools are here to stay.

The Solution: Listing 3D Exclusives Agent Referral Network

Listing3D Exclusives is a new agent referral platform that harnesses the rise of digitalization in the real estate industry while simultaneously addressing the current market trends and connecting forward-thinking agents and realtors. The platform utilizes Listing3D’s virtual reality technology, which creates high-quality, hyper-realistic three-dimensional real estate tours. The company, established pre-pandemic, has become the perfect solution to the current restrictions set on traditional tours.

The platform is user-friendly and markets, brands, and exposes properties to potential agents and clients. Members of the network also have access to all 10,000 3D tours featured in the Listing3D database, leading to additional exposure with all agents connected in the network.

Connect to agents all over the country, and if necessary, provide clients a compelling, fully remote tour experience while connecting them with the perfect agent for their needs. With Listing3D Exclusives, you can build a referral network of like-minded professionals while combating the realities of the pandemic with technological solutions.