As a former Realtor and Broker I remember going through all of the training courses, in which you where constantly reminded to build a strong referral system. Realtors generally try to use every avenue available to them to build a customer base, with the holy grail being customer referrals. By the time you attain a level of reputation in which you no longer need to walk the neighborhoods to get your listings, you almost don’t want to stop.
The process of trying to attain referrals creates bonds and relationships that can last a long time. It also creates a work ethic and a new sphere of influence that will grow with you and support you when you need them. Case in point, I had a mortgage client call me four years after I had refinanced his loan. He called primarily because he remembered that I didn’t rip him off. I gave this client the best rate on the market and only charged .75 points with no fees.
I know most brokers would be screaming at their agent for charging such a small commission. “We are not working for free” is the standard response I get. The other response I would get is we have to feed our families as well – while this may be true it’s worth noting that ¾ of a percent of a $600,000 loan amount is still a decent pay check for a single transaction.
My typical response in these situations was to remind my broker that the process does not necessarily end with the completion of a single transaction. While some agents were busy squeezing every penny out of their clients, I was building lasting relationships that would continue to pay dividends far down the road.
In the real estate business it’s relationships that make the difference, not the immediate check you get from a transaction here and there (though that is what pays the bills). It will not build future clients for times such as the one we are in now. When I first started in Real Estate I was ridiculed for not charging as much others in the office, but now those others are out of business and I have a database of 300 clients that I can call to generate business immediately when I need it.
So to all the realtors out there who are trying to create more stable business that will be profitable over the long term, here’s my advice to you: be ethical, participate in as many community events as possible and don’t forget to keep handing out your business cards. A small investment today can create a huge return later.