Coaching Corner

By Marilyn Urso, CRB, CRS, e-PRO, GRI, PMN, Real Estate Business Magazine, August/September 2006

Making the Most of Friends and Family

A CRB designee shares tips for turning relationships into referrals.

A key source of business that many agents never develop to its full potential is their immediate sphere of friends and family. Agents often say they don't want to damage their long standing relationships by doing business with relatives or friends. The weak spot in this argument is that someone has to help these people with their real estate needs. Shouldn't it be a trusted friend or relative? How can you convince your agents to pursue this great source of business?

First of all, your agents must realize that while this is a great source of potential income, they are not only doing it for what they may gain from the transaction. The main objective is helping a friend or relative have an easier transaction and realize their desired goal. I firmly believe in the old saying, "You make a living by what you get, but you make a life by what you give." Giving great service and help to every client will result in more business from all sources.

As a broker/manager, you can remind your agents that the best way to earn trust and achieve front-of-mind awareness is to provide information and demonstrate knowledge of the real estate business before friends and relatives have a need.

My husband Frank and I have found that no matter where we go, someone asks us what is happening in the local real estate market. We both always take the time to answer questions and find information even if it is something we don't know at the moment. From the supermarket to the soccer field, to a family get-together or chamber of commerce meeting, we have become recognized as the local experts who care enough to answer questions and help in any way we can. Becoming the source for vital real estate information encourages friends and family to turn to you when it is time to buy or sell.

When working with new agents — new to the business or new to your firm — make sure that they send a letter to their friends, family and acquaintances within the first two weeks of joining your firm. The letter should announce that the agent is now working for your company and that he or she can assist with real estate needs and questions. Remind your agents to mention that they love referrals and be sure to provide your company's Web address.

Often, brokers/managers make this suggestion to new sales associates but don't follow through to see that the letter or e-mail correspondence is sent. To launch the project, you can create a template letter and provide administrative support for agents. You might consider paying postage on that first important mailing or reimbursing for postage if agents bring in transactions as a result of the mailing. The template, support and postage are easily accomplished and remove any obstacles or objections agents might have for not doing it themselves. ("I'm not good at writing letters." "Postage is too high.") Make sure your administrative staff walks agents through the process so that future mailings can be handled by the agents.

What about the agent who has worked with your firm for years and isn't tapping into his or her sphere of family, friends and acquaintances? Inspiring these agents to use this approach can be a challenge. Each case is different. You may want to discuss this method during individual conferences when setting annual goals and reviewing production. You might suggest a different type of letter that the established agent can send. This correspondence could be in the form of a newsletter or market update report. Its purpose is to initiate contact and position the agent as the real estate expert for his or her family, friends and acquaintances.

The next course of action is to train your agents to become a real estate expert for their sphere. Once the letter has been mailed, the agent will probably receive some calls. At this time, agents must reinforce the seeds that were planted with the initial letter. To do this, they should prepare three key items or talking points:

• Some special facts and information about the area. (Example: "Were you aware that our town's high school was ranked among the top 10 schools in the country?" "Did you know that the county is building a new 40-acre park in our community?")
• Knowledge of the housing market they work in. (Example: Current MLS data on area sales: "The sale price on area homes is up by 4% over last year's prices.")
• Some highlights about your company and why it is the best firm to work with when buying or selling a home (Example: "Have you seen the town tours on my new Web site, JoeSmith.com?" "My company offers a free home warranty to all of our sellers.")

By conveying knowledge and expertise on the above items, agents begin building the caller's trust and reliance. They demonstrate their skill and ability to get the job done.

When working with agents who have family or friends outside of your immediate market area, help them develop a referral base with agents in the markets they're mailing to. As independent brokers, we don't have a corporate referral base, but we do use our CRB, CRS and WCR rosters for referrals. This approach has worked extremely well.

Another way for agents to get out-of-town relatives and friends to learn more about your company is to invite them to visit your Web site. If you include relocation information on your site, visitors will realize this agent can help them handle real estate needs by referring them to an agent in another area. Our Web site, LI-VillageRealty.com, has a relocation page for people moving to Long Island. It also offers out-of-area buyers and sellers an opportunity to register for a referral agent in their area.

A final step for the broker and/or manager is to lead by example. Ninety percent of the business my husband and I bring in is from personal referrals. We always make a point of letting agents know the source of our referrals. It has encouraged them to seek more referral business for themselves. Even non-selling brokers and managers will get referrals from their sphere of family and friends which they can pass on to agents.

Above all, we have found that by being honest and direct with all of our clients and by staying in touch, we keep our existing relationships intact beyond the real estate transaction. It also helps us develop many new friendships and long-term referral business from first-time clients.

We have developed complete systems for working with buyers and sellers which we share with agents. Reviewing the process at meetings through the use of role-play and open discussion gives agents the answers they need to overcome their fears and objections to pursuing this source of business. Most of this information is available on our office computer system and can be customized. Generic pieces can be printed at a moment's notice. Agents working from home can copy this data to a CD.

Our system for working with buyers includes:

• A packet of area information (schools, historic/cultural data, restaurants, services) and information on our buyer services.
• Equal opportunity questionnaire to ensure that we follow fair housing guidelines and treat all buyers the same.
• Checklists to guarantee follow-up and complete service for all customers.

Our system for working with sellers includes:

• A pre-listing packet which includes all the information on our company, our service pledge and print and Internet advertising programs. The package can be customized to incorporate each agent's personal data, too.
• Template letters to follow-up on appointments, listings, explanation of sale process, marketing plan, etc.
• Checklists for agents and office staff to ensure that listing items are addressed (verifying taxes, ordering signs, photographs, virtual tours, etc.)

So, start talking up that sphere of family, friends and acquaintance referral business at your next office meeting. Good luck and good referrals!

Marilyn Urso, CRB, CRS, e-PRO, GRI, PMN, is a licensed real estate broker/owner. She opened Long Island Village Realty, Inc. in Syosset, NY with her husband, Frank, in 1994. Her son and daughter, both licensed REALTORS®, work with their parents.