According to Quick Real Estate Statistics from the National Association of Realtors®, 88% of home sellers and buyers choose to go through a real estate broker or agent. That leaves only 12% that did not use an agent. 7% were FSBO properties, and 5% were purchased directly from home builders. As you can see, most people use agents for real estate transactions, but why should they choose you? The answer to this question may lie within word-of-mouth (WOM) advertising, and here are some reasons why.
The Numbers Tell the Story
If you are the first agent that a client sees, you have a good chance of getting their business. 67% use the first agent they talk to, and of the remaining 33%, 20% go with the second agent. If you look at these numbers more closely, you will see the importance of being the first real estate agent interviewed. How can you increase your chances of being first? Here are some more real estate statistics that may help:
- 40% - first agent people see is by referral
- 12% - agents used from previous real estate transactions (repeat business)
- 5% - for sale signs or open house events
When you are the first agent someone contacts, the odds of success are in your favor. Since more first contacts come from referrals, you should be thinking about ways to get more referrals, and that is where word-of-mouth (WOM) enters the picture. WOM should be one of your top real estate marketing strategies.
Consumers are 90% more likely to purchase a product or service which was recommended by a friend, family member or colleague.
Increasing Your Rate of Referrals
To increases your rate of referrals, you need to increase the number of people you know. If you have limited experience, you may need to work hard at building a network of contacts. Make sure to include everyone within your sphere of influence and not just clients and prospects. For example, a good friend, relative, or local professional can be an excellent source of referrals. Ask everyone in your network for referrals, and make sure they have your contact info.
Previous clients are an excellent sources for referrals. They have experience with you and can provide valuable information to potential home sellers and buyers. Ask for customer testimonials and publish them on your website and social media sites.
What Buyers Want
It is vital to get the first interview, but you also need to know what people expect of you if you want to earn their confidence. Do you know what is most important to your clients? 91% want someone who knows the local real estate market inside and out. Real estate market dynamics are important too. "Dynamics" refers to the current supply and demand. In other words, is it a seller's or buyers' market, and how strong is the market?
Next to market knowledge, home buyers want an agent who understands their needs and can find houses within their budget, has the features they desire, and in their preferred neighborhoods. They do not want someone to persuade them to buy a property that does not fit their needs. They want an agent who cares about their feelings and situation. They need someone to help them find the perfect home and get through one of life's most stressful yet rewarding experiences. You need to be there for them if you want more referral business.
What Sellers Want
71% use the first real estate agent they talk to, and 22% of those agents were previously used by the client. 38% of these clients rely on referrals from people they know. Here are essential attributes sellers look for in agents:
- Reputation - they want integrity and a positive attitude
The vast majority of people looking to buy or sell homes will use a real estate agent. However, the question you should be asking yourself is, will they contact you or your competition? When it comes to referrals in the real estate business, you should consider this sage advice, "ask, and it will be given to you." Getting more word-of-mouth business may be as simple as asking for it and being the kind of agent people want to refer to. Once you understand what clients expect, you are better positioned to serve them and survive the ups and downs of the real estate market.