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Monday, January 14, 2013

The 3 R's: Real Estate & Relationships = Referrals

The three R's, fundamental in early childhood education  is easily adapted to the world of real estate.  Real estate builds on relationships and grows into referrals.

An instructor at the real estate school where I received my licensing is still my mentor and dear friend.  He has said more times than I can count and often at times when I would prefer a pity party because of some meanie rather than advice that "real estate is a relationship business".  In other words, suck it up and move on.

There will always be obnoxious real estate agents to bang heads with during a deal.  They make their listings difficult to show, lack the ability to educate their clients, cannot work through a difficult home inspection - whatever.   I try to play nice in the sandbox but it doesn't always work.  Sand is thrown at one another, toys are stolen, and sometimes they run home and cry to mommy (their Broker in Charge). I just KNOW that one day I will face them again on another deal and that old baggage cannot follow me into future dealings.  Some relationships are just plain nasty.  Not an easy way to earn $.  Agents have been known to shy away from difficult contemporaries.  They know from experience their clients don't have a prayer of getting the contract to close.

Agents leave the business, the economy has had a impact on our local board of REALTORS.  While we have leveled off a bit, we are down a good 20% .  Doesn't really break my heart, more for those of us left.  Where do their past clients go?  If I have maintained a decent, workable relationship with one or two - they may send  them to me as a referral!  Or, say perhaps I know an agent in another market - they don't want to travel all this way - or they are WAAAAY far away - Egypt or something, and they know someone in my market who wants to buy or sell a home.   They refer them!  Easy money for them - good money for me too.  A nice relationship.  The tour below is a referral from an out of market agent - GREAT home too!
Play VisualTour

Imagine $2,000,000 sales price
Personal relationships can provide referral IN-come too through outgoing referral placement.   An excellent source for me has been my ex-husband.  While he relocated from our home, he still remains a source of business for me!  If he can find a way for me to place a referral - he DOES IT!   A friend in Ohio wants to sell - he persuades them to let me refer them to a listing agent in that market.  He wants to buy a garage to store his vintage autos, he calls me and I place him as a buyer referral.

Now, see that little gem on the right (that's his current home).  Say it sells for 2 mil.  I have no clue what it will list at - he has done lots of renovations etc...but just suppose it does.  This lovely little pie chart will demonstrate what kind of fee can be gained.  Keeping in mind the company takes (GASP) 1/2 of the incoming check.  I always appreciate his help - even if the buyer or seller end up not actually doing anything it's kinda fun to say I got the business from my ex.  And when they do close - it's an excellent source of additional income.   Taking that a step further - Mr. Ex-Husband has me place him as a buyer after the sale of current referred listing, in TWO markets.  Things being as they are the income from a sale in Cali will still enable him to purchase a retirement property as well as a primary residence.  That's THREE referrals from one source.   I never left my desk.   He gets to feel good for helping me out - I get to feel gooder as my bank account grows.   The kids don't have to feel their parents are at war.

Why wouldn't I beat my children, family, church members, FACEBOOK friends, past clients, REALTOR pals, absofreakinglutely every person I KNOW for leads?   The income gap between closings for personal clients must be filled.   When it comes to the well known and oft worked 'Who do you know who is interested in buying or selling a home?'  I mean ANYWHERE on this planet.

Lastly, lets revisit that first paragraph and my personal rant about real estate is a relationship business.  While I often have had to 'suck it up' from irresponsible agents, intolerable, demanding buyers or sellers, eventually even they learn sometimes the relationship is with TINA!