Real Estate Referrals:
Buying or selling a house can be a long and arduous adventure. After several months you finally get through the closing process and get paid. You congratulated your client, thanked them for their business, and gave the couple a beautiful housewarming gift. How will your clients remember you and your services? The answer to this question may shock you because human memory does not work as most people think. Two main factors come into play when it comes to memory of a specific experience, and understanding these factors can help you increase the number of real estate referrals.
How Memories are Formed
In the book "Thinking Fast and Slow," former Nobel Prize winner, psychologist Daniel Kahneman, described the "peak-end rule," which includes the two factors that determine memories. They are as follows:
- The peak moment of the experience.
- The end of the experience.
What is a Peak Moment?
To say that home buying is stressful would be a significant understatement. Purchasing a house is one of the biggest decisions you can make, and it rates up there with divorce and childbirth. According to the "peak-end rule," the most intense moment of the transaction will be a determining factor in the kind of memories you form. Unfortunately, this moment is often the most stressful time of the home buying process.
Much of the stress in buying a home cannot be prevented. However, with your experience and knowledge, you control the reaction to each stressful event. In addition, the way you handle problems will have a significant impact on your clients' memories of the experience.
A real estate agent's job includes more than helping clients buy or sell homes. They need to be there to comfort clients and offer all the support they need.
An Example of a Stressful Peak Moment
First-time home buyers and sellers face several stress-filled moments. First, the entire process is new and unfamiliar to them. Second, couples buying or selling their first homes often need guidance every step of the way. Finally, suppose you only offer limited information and assistance during the process (and are only interested in making a commission). In that case, this will likely leave a lasting negative impression on your client, which is not the way to get real estate referrals.
Here is an example. Getting a house staged before listing can be a lot of work and bring on a great deal of stress. Your client's home may be overflowing with furniture and other items accumulated over the years, and they may not have enough storage space. You offer practical storage solutions and personally help them for several hours organizing their items. This helps lower your client's stress levels and creates positive memories.
An Example of a Negative Ending
Peak moments are critical to forming positive memories, but they are only one factor to consider. The other factor you must provide a positive ending to the process, so your clients have happy memories of you and your services. You need to be there long after the sale is complete to ensure the positive ending does not turn sour. Here is an example.
Your clients closed on their home and moved in with few problems. Everything was fine until they had a plumbing issue with the house. Your client called you looking for help, and you referred them to a plumber that you knew. Unfortunately, the plumbing service that you recommended did not live up to your clients' expectations. Your client called you and left a message explaining their disappointment. You were busy with other clients at the time and chose to return their call later. Unfortunately, you forgot to return their call.
In reality, your client only wanted to let you know about the poor service, so you would not refer them to other clients in the future. Unfortunately, because their call was not returned, your client was put off, and this event is what they will remember about you. This is a perfect example of how to leave a negative impression at the end.
Leaving a good lasting impression is one of the most important things to remember. Had you returned your client's call, things would have ended much differently.
More on the Peak-End Rule
In one of his videos, Daniel Kahneman gave a perfect example of why endings are so important. He mentioned a man who attended the symphony and was enthralled by a lovely piece of music. However, right at the end, a terrible screeching noise came from backstage, it had nothing to do with the music, but it ruined the whole experience. Thus, 99% of his experience was positive, but he remembered it negatively because of the bad ending.
Things to Remember
A real estate agent's job includes more than helping clients buy or sell homes. They need to be there to comfort clients and offer all the support they need. Help them through the stressful times and give them a positive experience at the end by giving them a beautiful closing gift, and you are likely to be fondly remembered, and real estate referrals will start rolling in.