In today’s luxury real estate market, it’s not uncommon for the affluent to own more than one home. In fact, according to the National Association of Home Builders (NAHB), there was a stock of more than 7.5 million second homes across the United States in 2018.
As a luxury real estate professional, you have an excellent opportunity to secure new leads from first-time and second-home buyers. An effective way to bring in prospective new leads for you (and your fellow real estate professionals) is utilizing the agent-to-agent referrals strategy.
What Are Agent-to-Agent Referrals?
Agent-to-agent referrals occur when another real estate professional refers a client to you (or vice versa). There are many reasons why a real estate professional may refer their client to somebody else, ranging from a full workload to knowing that the other real estate professional has greater expertise in the neighborhood the client is interested in. Among the various types of referrals in the industry, agent-to-agent referrals help the luxury real estate market flourish as they offer a win-win approach for everybody involved. The client gets the knowledgeable and experienced representation they expect with a credible reference, while the real estate professionals reap the benefits of a potential sale and reciprocation in the future.
How to Get More Agent-to-Agent Referrals
Agent-to-agent referrals can be especially useful when looking to gain more leads with second-home buyers. That’s because affluent second-home buyers often look to buy more properties in other states. Therefore, it would make sense for you to refer your client to another real estate professional that specializes in the state that the client chooses, and vice versa! However, you need to establish these relationships with other real estate professionals before you can start the referral process so they are aware that you can become a valuable referral source in their sphere of influence.
The key to success here is networking and building relationships with luxury real estate professionals in other states or other niche markets. Utilize your current network to seek out other real estate professionals who work in popular areas for affluent clients to buy second homes, and communicate your referral strategy before sending a client their way. As with most relationships, it’s best to create an authentic connection with your fellow real estate professionals so that your business transaction goes smoothly and you both have a happy client. Here are some best practices to consider.
Referral Best Practices
The most important best practice to keep in mind regarding agent-to-agent referrals is to always ask your fellow real estate professionals before referring a client to them. While it’s true that most luxury real estate professionals will jump at the chance to get a new referral, there’s always the possibility that the professional already has too much on their plate and may not have the capacity to take on the responsibility of a new client.
On the flip side, you should expect the same courtesy when you get a new referral from another real estate professional. To ensure a smooth and successful transition, it’s also good to articulate to your client why you’re referring them to another professional. Most clients don’t appreciate feeling like they’re being “passed around” or “kept in the dark” throughout this process, so be mindful of this throughout the referral process.
Additionally, make sure your client feels comfortable with the idea of working with another professional who is not their first choice. Everybody wins when they understand how they’ll benefit from a referral. A possible bonus is that the client may likely refer you and your fellow professionals to their friends and family if the transaction goes well.
Start Building Your Referral Network Today
Agent-to-agent referrals can be a great way to build your network of affluent leads, especially for second-home buyers who may be looking for luxury properties in your state. The key is to build solid relationships with reputable luxury real estate professionals first in order to effectively expand your referral network.
Looking for other ways to stand out from your competition in the luxury market? Becoming a Certified Luxury Home Marketing Specialist™ (CLHMS™) is one of the best ways to get ahead. Learn more about this designation and get answers to your questions by reaching out to our team at The Institute for Luxury Home Marketing.