You will never run a referral based business without knowing why people refer others anything in life, not just real estate. This is crucial for understanding how word of mouth marketing works.

Are you sick and tired of fighting chasing leads? The good news is that just about anybody can run a referral based business because is based upon relationships you already have, but it starts by learning why people refer Realtors first.

Once you understand the real secret to word of mouth marketing, communicating with your database becomes easy.

The Psychology Of Word of Mouth Marketing

When people refer Realtors, it’s almost always because there is an ongoing conversation about real estate occurring. Suddenly, someone jumps in and says, “Hey, I know an agent, you have to call him/her. They are great!” Then, a referral is born. The question everyone wants to know is: why did someone refer that agent?

Referrals can take place anywhere people are having conversations, but real estate is a much more highly referred profession for two reasons:

1. Moving is an emotional decision and when people are moving they are talking about to everywhere to everyone.
2. Buying or selling a house is a major financial move and someone trustworthy. Referrals are crucial for this.

How do you get people to refer you more clients?

Referral marketing is all about training your database to associate your name with real estate. Your want your database to immediately think of you anytime the word “real estate” is brought up. If you can accomplish this, you will begin attracting business. The key to this is through top of mind brand awareness and being everywhere with consistent content creation.

Think about the last time you referred someone something or someone.

Ask yourself, why did you refer that person or thing?

When people refer services/professionals to others, they do not get any type of award, big shiny trophy, or anything monetary, do they? There is no tangible incentive to refer anyone to anything. We are genetically programmed to refer our friends, co-workers, and family to things we like, which includes referring Realtors.

Real estate is based on word of mouth marketing

Everyone always “has a guy”. Everyone always wants you to use “their guy”. In some markets you can literally trip over a real estate agent there are so many.

Go ahead and make a post on Facebook right now asking for any type of service provider and people will respond with several of their “guys”, but the question is why do they care? What’s in it for them?

People refer Realtors when the following three things are present:

1. They have to like the agent they are referring them to;
2. They have to like the person that is asking or suggesting for a referral for an agent; and
3. The person referring the agent has to notice that an ongoing conversation is taking place (about real estate) and they have to THINK OF YOU (this is the key).

People Refer Realtors because they like helping others.

Who doesn’t like to be thanked or acknowledged? People refer others to things or services they like, it is only because they feel like they helped someone solve a problem. It’s the way God made us.

That’s it. Word of mouth marketing is embedded in our DNA to be natural problem solvers, but you have to become more referable and thats’ why you have to create content. Don’t you like solving problems for others? Of course you do, we all do. It’s part of being human.

Your database actually wants to refer you business, but it’s your job to become more referable. If you are not marketing your database, I promise you that somebody is.

You must look at your career as a popularity contest because everyone knows a Realtor.  Did you know that roughly 75% of people use the first agent they come into contact with?  How do you become the first person they talk to or be the agent that is given the referral? You do it by being top of mind.

The problem most real estate agents face is; how do I stay in touch with my database and increase referrals through word of mouth marketing?  It starts by finding a marketing strategy that is authentic to you, but that’s another conversation.

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In almost every circumstance I’ve seen, client appreciation events WAY outperform other marketing or advertising activities. They build your brand, nurture your database, and allow you to meet new people, but they have to be marketed correctly.

Client Appreciation Events Are A Marketing Activity

Inviting someone to a party is the ultimate way to connect with the most important asset in your business, your DATABASE of relationships. The impactful marketing you can be doing in your business is nurturing the relationships you have in life because it’s a fact that over 70% of ALL agent business comes from people you know, not from technology or prospecting.

Having a client appreciation event is a marketing ploy to gather more referrals and repeat business if you do it right and consistently(1-4 times a year).

In addition think about all the excuses you have to “remind” your network that you’re in real estate or lending?  You have email and direct mail invitations to send out.  You also have social media images, events, and videos that can be created before, during, and after the event.

The entire “marketing” of the event allows you to make a HUGE splash telling everyone you’re in real estate without really telling them. This is what people remember.  Plus it positions you as the expert.  People who are having parties must know what they are doing right?

Who Do You Invite To A Client Appreciation Party?

Many realtors think their client appreciation event should only be for past clients?  Everyone lives somewhere don’t they? This is mistake #1. Your friends, family, and past co-workers are future clients, unless you don’t expect them to use you when they are ready to buy or sell. They are also all referral sources because each of them has the ability to introduce your services to someone in their sphere(100% of the people you know, knows someone who is moving this year).

Inviting them to your client appreciation event allows them to see you in a professional light.  They will see that you are more than their weekend  buddy.  This is what it takes to turn some people from “friend” into a referral source.

It’s only a matter of time until everyone in your network moves so the sooner the you program in their heads that you are their go to Realtor, the faster you will see their referrals and direct business.

I sold a house to a guy who came to my client appreciation event 4 years prior.  When I asked him how he got my information he told me, “I was at your party dude, it was awesome”. I didn’t even have his email, he just remembered me and looked me up. That one deal paid for the whole event plus some, in addition to creating another client and referral source.

Client parties will bring you business and build your brand if you do them. The key is to not overthink it and brand them.

How Much Should I Spend?

As much as it takes.  Yes, a client appreciation event can be expensive, but with a little creativity they don’t have to be. I used to do HUGE blow out parties and we used to spend $10,000-$15,000 on each event.  The cost might seem high, but it wasn’t because we would sponsor those events out with our lender, closing attorney, and other strategic alliances. They were free to invite all of their database, which increased our overall attendance and impact.

I would also team up with my agents on my team and we would split the cost up amongst each other based on the total amount of agents participating to keep costs down.  The end result was one bad ass party that people loved to attend. We used to average 400-600 people per event.

Client Appreciation Event Ideas

Rent Out A Nightclub/Bar– We would rent out  a nightclub before they were open to the public from a 6-9 pm on a Thursday night and invite over 1,000 people through Evites, social media, email lists, and direct mail invitations.  The reason we did a nightclub was because they had no kitchen,which helped lower the costs.  The nightclub was also closed at the time we would do the event so it was a win win for both of us. We would do a 3 hour mega party, free drinks/food, host fundraiser, pictures, and even ice sculptures. The establishment monetized an early evening when they were typically closed.

After 6 years of doing this, it built a very solid brand.

Holiday Events– You can very easily host a “Pictures with Santa” or “Pictures With The Easter Bunny” for a client appreciation event. These are very inexpensive and an easy way for you to market your business and at the same time solve a problem many families face. As a father trust me when I say this, I don’t want to stand in line for 2 hours waiting for a 5 second picture with Santa.

You can  do this in your office and totally sponsor the entire event out. Remember that the lines are super long at the malls and most parents just want the pictures so this is an easy way to get in front of them and brand yourself to remind people what you do for a living.

House Party– Have a party, yea at your house.  Depending on your home set up, you may want to limit your invite list in this case, but just remember its the thought that counts.  You can have a BBQ in your yard. This shouldn’t be too expensive and a great way to nurture your database. You can also host neighborhood BBQ as a farming technique to your community and sponsor your brand making it an event!

Fundraising Events– I love fundraising client appreciation events because it’s something most people can get around.  I used to like raising money for foundations.  A fundraiser can be less expensive because most of your sponsors should be donating towards the cause and your attendees should not have a problem paying some money at the door.

Your database will also appreciate what you are doing.

Local Events of Importance– What if your local sports team is in the championship? Have a viewing party of the final game for a client appreciation event.  You could create an event very quickly just by hosting a viewing party at a public place or even your house.  This may be more last second, but it’s the invite that’s most important.

Just don’t invite any Packers fans, lol.

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Here are some other client appreciation event ideas from a couple of agents I know in California that were extremely creative and thought you would get a kick of these.  Both of these Realtors understand the importance of branding their business within a client appreciation event and BOTH of them are Rockstars!

Meet David Serpa

David is a veteran and served our nation proudly as a marine. After he returned from Afghanistan he took up a career in real estate and has completely dominated his market in a very short amount of time. David understands the importance of building a brand.

David is a good man and gives back to his community and did a country music festival in Temecula, CA for his client appreciation event.  Most people wouldn’t believe me, but watch the video and see for yourself.  This is one of the best examples of client appreciation event I have ever seen.

I want you to take notice of how he branded the entire thing from the video to the stage.  What a class act.

What If Nobody Shows To My Client Appreciation Event?

They will grow over time. I would market my client appreciation event to my database 3- 4 times the month of.  At worst I was able to market my real estate business without having to talk about real estate at all. My first client event was only 40 people, but it was a starting point for me.

I collected all their names and addresses and put them all on my database that I systematically market to. The promotion of the event itself is a “sell without selling” marketing activity for your business!

As long as you invite your network it’s an excuse to touch base, reinforce the fact you are in real estate, and a way to humanize your brand.

TIP:The most important thing you can do to increase attendance is to make a phone call and give them a personal invite.  I used to text and personally invite my most important contacts.

Hosting a client appreciation events are a way to build and strengthen your relationships with your network and will be the best use of marketing dollars that you can spend.  I would recommend this over a Zillow zip code any day of the week, what you think?

If you like the information here check out the rest of the content on my channel.

Referrals are the lifeblood of the real estate business, but how do you express each referral thank you? There is no better compliment to your business than receiving a referral, but are you taking the time to properly thank the referring party the right way?  If not you very well may be pissing them off.

Over 60% of Closed Business Comes From Referrals Or Repeat Clients

When people refer services/professionals to others, they do not get any type of award, big shiny trophy, or anything monetary, but you should at the very least say thank you.  
When somebody sends you a referral they are more than likely expecting your acknowledgment of it. If you just handed somebody $5,000 wouldn’t you at least expect a phone call? People who refer you business now will refer you more business later so make sure you have a referral thank you process.
When you get a referral you need to acknowledge it the same way you do when your dog goes to the bathroom outside by using positive reinforcement. You must let your referring relationships know how much you appreciate their referrals.
Have you ever received something from someone unexpectedly and even though it is something small, you very much appreciated it?
Here is the referral thank you checklist I’ve used over the years with every client I received a referral from.  

1. Make personal contact with referral

Pick up the phone and thank the referring party immediately.  If they do not answer the phone you can leave a message.  This is something very simple to do and it should only take a few minutes.

2. Send Referring Party A Text & Email

Once you either speak to them on the phone or leave a voice mail, send a follow up text and email.  Make it short and sweet and say something along the lines of, “hey just wanted to thank you again for your referral. It means a lot to me.  Hey, what’s your address by the way (if you don’t have it).  You should always have the direct mail address of anyone who as sent you a referral.

3. Send a “Thank you” letter and $10 Gift card

Print off or hand write a thank you letter with a $10 dollar gift card to either a coffee shop or gas station.  Most people won’t expect anything, but when they receive it will be very appreciative. 

4. If referral closes, call to thank referring party again

Once the referral closes, make sure you contact the referring party again via phone, text, and email. You should make sure you update all contact information in your CRM and add them to your database marketing system. Let them know their referral closed and you took great care of them.  

5. Send Referral a $100 dinner gift certificate when referral closes

Don’t be cheap.  Somebody just printed you money.  Get them a dinner at a local restaurant!  Somebody who sends you a referral will send you another one so look at this as an investment. Do you think they will send you another referral in the future?

6. Acknowledge the Referral on Facebook/Instagram

Tag the referring party on social media with a simple thank you story. By doing this you are programming your entire database that you are referral based real estate agent.
Generating more referrals is not rocket science, it’s common sense, but if you want more of them you need a referral thank you checklist. Implement this system and see what happens next time you receive one.
This is also a real good book if you are interested in learning more about attracting referrals.

What if the normal rate to for buyers agent compensation is 1-1.5%? Could you survive based on your current business? How would you generate income as a buyers agent post NAR Settlement? While some in the real estate industry are freaking out about the NAR settlement and buyers agent compensation, I see lots of opportunity. Now Before you get angry reading this, please consider the following:

Regardless of what happens with the NAR settlement, the real estate industry is taking a PR hit.  Between the media constantly throwing Realtors under the bus in news headlines and more sellers wanting to “test” the waters of not offering a buyers agent compensation, change is here.

There are lots of opportunity when things like this happen, but it will require you to think outside the box. Your personal brand and relationship you have with your local community and database is more important than ever.

Real estate agents are not going away, there is a need. However, what consumers want from their agent will change. You need to be ready to change with it.

What nobody is talking about is how can you survive as a buyers agent if you see a serious cut in commissions?  The good news is that these are only a few ways you can receive buyers agent compensation in the future.

3 Mental Shifts & Ways To Be Compensated As A Buyers Agents Post NAR Settlement

Whenever there is a paradigm shift in anything, there is a lot of opportunity to change with it. Here are some additional ways you can be compensated without having to fully rely on listings. Buyer agency isn’t dying, it’s just changing.

1. Create Additional Revenue From Ancillary Services

There are many companies right now that want to partner with buyers agents for referrals.  If the NAR settlement changes the amount of compensation you can collect from buyer commissions, then part with a Solar company like Renewable Real Estate, who have a Realtor referral program and the commissions are juicy.  No, you do not need to become a solar salesperson, you just need to add solar to things you sell.  Solar is one of many ancillary services that are willing to pay you for referrals.  

Your clients are going to be buying or using these services anyways, so wouldn’t you rather be the one that gets paid and making sure they are buying something worthwhile or a good investment?  Real estate agents have always been great connectors, but they haven’t been great at getting paid for it.  

2. Get Your Mortgage Loan Origination License

There are many mortgage companies right now across the US that you can be paid legally as a real estate agent. This could make up for an additional .5-1% in the loan amount but you would need to check further with them.  Of course there are some fine details to this, but essentially you are not legally able to get paid for referring a lender whom you trust.  In my podcast, I make a reference that if the NAR Settlement completely disallows buyer agency commission or credit paid from a seller, this could very well be the future of buyer agency.

3. Become a Principle & An Investor

The future real estate agent will be good at two things in particular.  The first is good at relationship building and marketing. It’s more important than ever to have a solid book of business for referrals and repeat clients, but that doesn’t meant you don’t prospect. It just means you prospect smarter.  Investors are really good at finding deals even in the hardest markets.  If you were to become a good investor, you’d have to be good at finding deals and 90% of the deals you find will turn into listings.

However the 10% of those deals you find will be great finds for you to take down. Instead of looking at making 5-10,000 on a commission you might start making $40,000+ on a flip. In addition you could build a rental portfolio of cash flowing real estate over time.

In all 3 of these instances you are forced to evolve into another income stream. None of them would have happened if things didn’t change.  Change can be good if you know how to change with it.  

If you’re not creating real estate content now or have plans to into the future, you’ll be out of business. That’s a bold claim to make, but hear me out first.

Every real estate agent or lender will need to create a personal brand.  You cannot create a personal brand without creating content, unless you’re famous, but if you were, you probably wouldn’t be selling real estate.

Every Real Estate Agent, Lender, & Independent Contractor Needs To Create Authentic Content

The topic creating more real estate content is starting to infiltrate marketing discussions, but what does that even mean? Do you have to create your own real estate content or can you use someone else’s?

Every real estate agents marketing plan will involve content creation You need to create your own real estate content.

What Defines Real Estate Content?

Let’s first define what content creation is.  I know this may be obvious to some, but not all agents are up to speed on the whole “content marketing” thing.  Content is anything that you share about your business that others could find interesting. In real estate, you can create articles (blogs), education videos, or even market your listings for example.

Content is anything that “reminds” other what you do for a living.

There are many services online that can “ghost write” content for you or post for you online, but do they work?

BUT….Here’s what I want you to consider.

It is impossible to outsource authenticity.   The key to your content is not creating it, it’s having it leave a lasting impression.

For example, there are many services that offer pre-written email marketing campaigns. One of the things I hate about pre-written “done for you” email marketing campaigns is that they are very cold.

This has a better chance of annoying your database than nurturing it. This is why we only teach and preach video email marketing for all referral generation efforts.

Do you get those financial planning and mortgage monthly news emails? What do you think?

There’s your answer…

The same concept applies when you have articles written for you.  The entire point of blogging is to establish yourself as an expert in your field and use your real estate content to attract more potential prospects to you. People do business with people they like first and foremost.

Should I Share Others Real Estate Content?

Absolutely, why not? Anytime you are sharing content on social media or to your email list, you are reinforcing in the minds of your database what you do for a living, which is referral marketing. But don’t just share it, REACT to it or comment on it.

One of the best types of videos you can do right now on Reels is a Green Screen Video Reacting to something in the news.

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A post shared by Mike Cuevas (@yourmarketingdude)

You should always be sharing content that reminds your social connections that you’re in real estate.

Creating content allows you to sell without having to ever sell anything at all. Focus on serving others and helping people get the answers to the most pressing real estate questions and it will start turning into money for you.

A while ago I was looking for some case studies about what makes consumers choose their real estate agent. I came across the Keller Center Research findings who did a study on this.  The first answer was through referrals, which is obvious.  This is what else they found;

Top 5 Things Buyers And Sellers Want In An Agent?

1.Comfort– Will I feel comfortable working with an agent over a period of time?

2.Honesty– Will the agent respect my wishes? Will I get straight forward answers? Do I trust them?

3.Establishment– Is the agent established? How long they been in business?

4.Experience– Does the agent have the experience to handle my situation?

5.Knowledge– If I am buying does agent know the in and outs of area? If I am selling does agent know marketing, technology, and staging in a way to justify their commission?

5 Magical Things That happens When You’re Known For Creating Real Estate Content

1. People get an idea if they will feel comfortable working with you.
2. They will get an idea of how honest and genuine you are.
3. It will give people an idea of how established you are in the industry.
4. Your level of experience will speak for itself
5. Your knowledge will shine through demonstration.

Creating real estate content will attract more prospects, convert more leads, and generate more referrals.

So the final answer is, YES you should be creating your own real estate content.

It’s not about the content, it’s about the impact it leaves and the brand it helps you build.