Everyone loves referrals. When a referral comes our way, it feels great, we tell everyone about it, our manager brags about us at the office meeting, we know we are doing good. In our mind, a referral is a client’s way of bestowing on us their appreciation for our hard work, outstanding performance and personal care in helping them buy or sell a home. We know that eventually our hard work will pay off with an endless stream of referrals from loving clients.

Wake Up! Unfortunately, this is a fantasy shared by many agents. What keeps this fantasy alive is that every now and then it actually works just like we see it in our dreams, so it keeps our hope alive, just like winning the lottery or hitting the jackpot in Vegas.

I hate to burst your bubble, but after studying agents who consistently receive many referrals, I can tell you that getting lots of referrals does not come from providing exceptional service. In fact, as long as you are not totally incompetent as an agent, there is very little correlation to the quality of service you provide and the number of referrals that you receive. I have worked with many agents who provide great service, who get referrals every now and then. I have also worked with agents who would have a steady stream of referrals and provide simply adequate service. The difference is that they ask for referrals.

Don’t Be Afraid to Ask

Once we demolish the notion that clients will give you referrals when you provide great service, we can start looking at how to build a referral system that really works. The first thing that agents must understand is that you actually have to ask your clients for referrals. I know this shocks some agents, but it is true, you have to ask. But to actually have a system you have to take it a step further, you have to have a plan for how and when to ask.

Most agents ask casually in a conversation, “By the way, do you happen to know anyone who is thinking about buying or selling real estate?” When you ask casually in a conversation it is easy for the client to say no, and even if they say, “Well I am not totally sure but I believe John and Mary are thinking about moving up.” Most agents are not prepared with pen and paper to capture the information they need to follow up on, and so it is lost.

You must ask in a serious manner with the expectation of actually receiving a number of referrals, pen and paper in hand. Remember referrals are like gold nuggets; they are worth doing a little bit of mining to uncover.

Timing is Crucial

The next question is when do you ask for referrals? The agents that get the most referrals always answer the same way, “Often”. But we are getting ahead of ourselves. Let’s get you asking at least once to start with. With listings, the best way to ask is to set up an appointment to review the details of the closing, about one week before it is scheduled to close.

Simply sit down with your clients, review the details of the transaction, remind them that they need to turn off the utilities and give them a clear set of expectations of what will happen on the closing day; then pull out a pad and paper and look at your clients and say the following:

It has been a pleasure working with you. I would love to have more clients just like you. It would be really helpful for me if you could give me the names of 3 people I could contact and use your name as a referral. If you don’t know of anyone who is thinking about buying or selling right now, I would love the names of three people who I could simply send my personal brochure and a letter of introduction to.

Then pick up your pen look at your paper and they will give you names. I know that this can be scary for agents but if you will do it just a couple of times, you will find out how easy it is.

Drop in and Say "Hi!"

For buyers, the best time to ask is about a week after they have moved into their new home. Call and set up a time to drop by. Ideally you should have something that you can give them, a house-warming gift, an area information package, or any final paperwork.

You must sit down with them, ask them how they like their new home and if there is anything that you can do to help them. Then pull out your pad of paper, look at them and say, “It has been a pleasure working with you. I would love to have more clients just like you. It would really be helpful to me if you could give me the names of 3 people I could contact and use your name as a referral. If you don’t know of anyone who is thinking about buying or selling right now I would love the names of three people who I could simply send my personal brochure and a letter of introduction to or anyone who has been excited about your new home. Often times, a friend’s move makes others start looking. Who comes to your mind?”

Look at the paper and prepare to write. After you have the names, be sure to thank them.

Get Past Your Fear

If you do this, you will be amazed at how easy it is to get many referrals. Don’t let your fear stand in the way. Once you have the referrals I strongly recommend giving your clients positive reinforcement so that you can go back and get more from them anytime you want.

Published: August 27, 2003

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Co-founder of Hobbs/Herder Advertising and Hobbs/Herder Training, Greg Herder is recognized as the real estate industry's foremost authority on residential real estate marketing and agent productivity training. Herder is also a licensed Certified Residential Broker (CRB) and owner of MegaAgent Realty, and co-owner of JDG investments, a real estate investment company. Herder is a featured columnist on real estate marketing and training issues for Realty Times, Real Estate Executive Magazine, Savvy Executive Profiles, and, as well as a contributor to a variety of other industry publications, including Realtor® Magazine and Real Estate Business Magazine. He also authored the innovative how-to book “Satisfaction Guaranteed - 100% Satisfaction Guaranteed or Your Money Back," which ushered this unique concept into the world of real estate service. Greg has conducted over 1500 one, two or three day seminars over the past 17 years for the real estate industry and is a professional member of the National Speakers Association (NSA). He graduated cum laude from California State University with a BA in psychology and is currently working on getting his PhD in Organization Behavior.