The Importance of Referrals in Real Estate

In the real estate industry, the importance of referrals cannot be overstated. They are not only recommendations but also high-quality leads that are much easier to turn into clients. Research shows that more than 90% of people believe that recommendations from people they know and trust are important when choosing an agent. In the following article, we'll state the benefits of client referrals in real estate and how to ensure that you have more of them.

The benefits of word of mouth

In the real estate sales market, your imperative should be aiming to build your client's trust. One of the quickest, most efficient ways to do so is to be introduced to the client by a person they trust. They will be much more likely to trust you and become interested in what you do if they have already heard about a positive experience from their trusted source. Word of mouth should never be underestimated. It can create much more interest in you as a real estate agent and be much more effective than other marketing solutions. The word of a satisfied friend, family member, colleague, or acquaintance is so valued because it comes from a reliable party.

Word of mouth should never be underestimated

Higher profit margins

Real estate agents use referrals to increase their profit margins. Referred customers are likely to purchase your service at full price because they believe in a trusted and positive review. This means higher selling prices and higher agent commissions. Referred clients are very often less sensitive to price. The majority of referrals result in much higher profit margins because sales are made based on credibility.

Satisfied clients

When you know the importance of a client's referrals in real estate, you can build a strong network of satisfied customers that will basically do the central part of your marketing. Many successful and experienced real estate agents have a referral reward program for their clients. When the clients refer to a friend, they get a discount, and their friend gets a discount too when they contact you. That's a win-win situation for each party, wouldn't you say?

It's a good idea to offer some incentives for referrals, to encourage satisfied and loyal clients to talk about you and your services. People just like getting rewarded. They also like getting involved in something and feel like they're a part of something good. They will be delighted if they witness your business succeeding because of their help. Positive interactions lead to a higher audience engagement on your website and social media platforms.

Showing clients that you care

Word of mouth was already proven to be the most effective marketing method for real estate business, so let your clients know that you care about their opinion. It sends a strong message to both the prospective buyers and sellers. Only satisfied clients will refer people to their contacts. When your business grows and develops, it's crucial to implement an effective client referral system to cultivate profitable and long-term client relationships.

One more way to ensure that you have satisfied clients and more referrals is to understand what clients are going through. Each relocation comes with many challenges, but before even coming to packing their life into boxes, clients have the challenging task of finding the ideal home for them and their family. Usually, there is no ideal one, but finding something that suits the family's crucial needs, and making a few compromises, solves the situation or at least narrows down the choices. Promote open communication with your clients, have empathy and be polite. It will mean a great deal and show that you really care.

Show patience and understanding of what your clients are going through.

Saving money on advertising

Client referrals in real estate will save you money on advertising and effectively grow your real estate business. They help you create wide networks and a remarkable level of client loyalty. Simply asking for a referral is one way to go, but the best strategy is to offer your client an incentive in order to refer you to their friends and family. Recommendations are so valuable because they usually take less time and require fewer resources on your part. You'll save time on completing the mailing list, developing digital and printed material, covering mailing costs, etc. Motivated buyers and sellers also mean an increased likelihood of a completed sale, which is the goal for both parties involved.

How to get more referrals in real estate

Here are a few tips to increase your referrals:

  • Ask for them and offer incentives
  • Stay in touch
  • Be social
  • Build a reputation based on excellence
  • Publicize your services online, especially on social media channels

Ask your partners, associates, and past customers to give you a positive review on your website and social media. People give out referrals differently, so having a few sources from each area is good practice. It makes a referral pool more diverse, and that's exactly what you need. Clients who had a great experience working with you usually spread the word without you even telling them.

Sell yourself so well that your clients will want to recommend you to others. You can ask them to mention your name each time they talk about how they found their ideal home. One more way to go is to kindly ask them to tag you on a photo which they'll post on social media announcing that they just bought a new house. When someone sees the happy family and the beautiful home they bought right with your name connected to it, that creates a powerful impression. Continue to communicate with your past clients to build a relationship that will keep your name in their minds. Attend networking events in your area whenever you can. The number of people you meet equals the number of chances you'll have for getting referrals.

The importance of referrals in real estate is huge, so keep making contacts and stay in touch with people.


Referrals in real estate provide you with marketing at virtually no cost. They also remind you that you are doing something remarkable. Someone who's taking the initiative to refer your service is actually giving you the highest and most valuable professional compliment.



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