Most real estate agents get the majority of their clients through referrals. There are lots of reasons agents love referrals. Most referrals are already interested in buying or selling their home. Because their friend or colleague referred you, you already have credibility in their eyes. They are easier to work with and are more likely to close the real estate transaction. And they are much more profitable because you didn’t have to spend money on advertising or lead generation to convert them to clients.

Building a referral-based business is a five-step process that involves cultivating a network of strategic partners who are likely to refer business to you.

1 – Compile your contacts into a database

If you don’t already have a database of your current and past clients, your recommended vendors and service providers, and potential referral partners, start compiling that information into an easily accessible format. There are numerous programs out there to stay organized, such as Top Producer and Act! On the web, you can use HighRiseHQ.com. Or, if you are short on cash, use Microsoft Outlook to keep track of your information.

2 – Organize your contacts each day

Make a commitment to spend five to ten minutes each day adding any contact information you’ve collected to your contact database. Whenever you collect business cards or write details down on Post-It notes, make it a priority each day to input that information.

3 – Attend a networking event each week

The best way to meet new people is to join a business or networking organization and attend events. You will meet a lot of new people to add to your sphere of influence.

4 – Commit to personally contacting two people each day

If you only contact two people per day – through phone conversations, email, or mailing a handwritten note – that translates to ten per week or forty per month. The more you touch base with people, the more likely they will be to refer business your way. Other ideas for follow ups – send out an annual home valuation to past clients, endorse local business owners in your sphere, or send local real estate market updates (for instance, if their home gains value). You should also try to meet your top referral sources in person once or twice a year.

5 – Send monthly follow ups

A great way to follow up with potential referral sources is to add them to your monthly real estate newsletter. Each month, you can send out local market statistics, housing trends, new listings, and a featured article in your area of expertise. Only send this newsletter to people who have granted you permission first – it can be incredibly annoying to receive unwanted email. Before you end any conversation you have, simply explain you offer a monthly newsletter and would they mind if you sent it to them.

In each communication you have with clients, ask for referrals whenever you follow up. This is important because if you don’t specifically ask, it might not cross their mind. If you follow up by email, include a referral request in your signature. If you send mail, include a PS and a request for referrals. By implementing these five steps, you will begin to build your real estate referral business in just a few minutes each day.

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