Real Estate agents often work by referral. The thought is that you give great service to your clients and they refer you to a friend, family member, or associate when they are in the market for real estate. Referrals are big. I suspect something like 85% of our real estate brokerage revenue is from past clients. As we’ve been in business for a long time now, I’m noticing many of the people who have referred us in the past have passed on. It’s hard to get a referral when your client is dead. But this fits a pattern that you can see when people choose to buy or sell a home.
Life Events Usually Dictate Home Purchases
In the real estate industry, I would say the term most commonly used to clear the timing of someone buying a house would be a “life event”. Here are a few “life events” that usually lead to a real estate transaction.
Relationship taking the next step Two people have found that they want to take the next step in their relationship and they decide that buying a home together is the next thing to do.
Wedding A couple has decided to get married and move into their first home together
Child Birth There are all sorts of reasons related to child birth and the purchase or sale of a home. Sometimes, bigger families mean bigger houses, sometimes a move to a school district is important. It’s somewhat unusual for a couple to be expecting and move into a smaller house or apartment.
Divorce It depends on the divorce, of course. Some couples work out arraignments for one or the other to stay in the home; some liquidate at the time of the divorce.
Age This usually works two ways and it’s usually sale related. In one case, the seasoned citizens decide that they don’t want to take care of such a huge house and they look for a home that has features that are considered friendlier than their current home. This would include ranch homes, homes with washer/dryer units on the first floor, etc. The second case is when you have an older person who is moving to a retirement home. This is usually not a great situation, and it is where we as real estate agents and brokers can provide a lot of value.
An Almost Unbelievable Coincidence
When I wrote that it’s hard to get a referral when your client is dead, I was thinking about all of my great clients who have passed. I think this is a very good lesson for anyone involved in real estate and I’m going to try to explain what I’ve seen during my real estate career.
I suspect few real estate agents notice, but they are going through their own life cycle or life events while they are actively involved in real estate sales. And, not coincidentally, for a bunch of real estate agents, their clients, or the majority of their business just happens to coincide with their own lives. Here’s a rough sketch.
Real Estate Agent Gets Their License A young agent gets their license around the age of 22. Their friends are starting to get serious with their relationships and careers. Pretty soon, that young agent is showing houses to those with life events weddings, child births, relationships taking the next step. The real estate agent may have no idea what they are doing, but since their clients are also first time homebuyers, they don’t know what to expect either. It seems to work.
Real Estate Agent Is Experienced as our fresh real estate agent grows older, their client base also changes. Now we see divorces, child birth, and relationships taking the next steps. This can be a time of great happiness or great sadness for the clients of the agent. And, because the real estate agent is better prepared to handle life events, things work out great for the client.
Real Estate Agent Can See The End Of Their Career If this real estate agent is extremely lucky, they have been in business for a long time and can now see that they aren’t going to be in business forever. They’ve put some of that money away from each closing, and the client base again changes. Now our seasoned real estate agent is working with seasoned citizens. There is more talk of grandchildren than at any point of their real estate career.
An Easy Mistake To Make In Your Real Estate Career
In our real estate brokerage, we market to all age groups. However, I see some real estate agents get way too comfortable working with those only in their age groups and not marketing in any way to those outside of that group. This is a huge mistake. Why? Your business is dependent on clients. Some of those clients move, some clients disappear, some former clients choose a new real estate agent, and some of clients die. If you don’t have a way to find new clients, your referral business isn’t going to work. There won’t be anyone to get a referral from. If you aren’t actively marketing to your referral sphere, your most trusted and loyal clients might think you’ve passed on and give their business to someone just starting their real estate career.