Q A Z Z O O . C O M


We as real estate professionals have been taught from the beginning to work by referral. Why you may ask? Then again you may not have but I am going to ramble on about it anyway. Many Real Estate firms work on the same principle as multilevel marketing. Sell to family and friends and expand your base. This is a wonderful concept but it misses a couple of important elements that are worthy of consideration. By referral only is first and foremost a great sales pitch but what is a referral? If you bump into a guy at a bar or a gal at a community function and they ask you to sell them a house, are you actually going to say “Well if you know one of my friends I can help you, but if not…sorry you are on your own” ?

Talk_to_the_handIs that really going to come out of your mouth? My lips would break if I started to utter those words. I think my lips and perhaps my tongue would go on strike and force me to eat through a straw. And they would be right to do it. The truth is by referral only is a sales pitch and a short-sighted way of looking at doing business. Unless you are a super exclusive one in a two million Real Estate Agent you live and die by your ability to generate business. New business that leads to new vanes for referrals to be generated but to make a living by referral only is tantamount to selling homes using public transportation to show homes.

“I will meet you at the bus stop and we can get to the property with a single transfer to another bus and we will be right there at the first home we are looking at today.” This is possible but it is not optimal. Optimal is to go from point “A” to point “B” on your schedule and not the schedule of the bus schedule.

In order to create your own schedule with your business you need to have a plan that generates a growing number of potential clients. This cannot be done by referral.

One of the newest things I have heard and maybe you too is that “Facebook is the new referral network” this could not be further from the truth and only people who don’t understand Facebook will take the time to take a class on “Facebook in Real Estate”. Facebook is great for keeping up with long-lost friends and close family but to sell homes through Facebook is like opening a hamburger shop in India. Hint: Cows are sacred in India and for that  matter social interaction is sacred on Facebook. Doing business is not why people join Facebook. People join Facebook to share non essentials and have a place to store memories and thoughts. cow

In order to work by referrals only you better be also willing to pay some of your referrals 25% of the commission for that referral. Do the math on how much business you could have generated spending that same 25% on either a well designed ad campaign or just paying for leads from a reputable source. The math goes something like this:non essentials and have a place to store memories and thoughts.

$5000 commission check minus 25% means writing a check for $1,250 for some ones name and phone number. $1,250 bucks on Qazzoo (as an example) would get you about 3000 names and phone numbers of people who want to either buy or sell their home. We think it is free because we have been taught that from people who sold houses pre internet. We have been told this repeatedly by our brokers who don’t want to be forced to invest in generating real estate leads. The brokers have been forced to push referral networking because they have experienced the misery of generating stacks of leads to see them wasted by some of their agents that don’t have your skill level in selling and or follow-up. So the investment made by the broker is only as good as the people who receive the leads. And we all know the guy in our office that can’t close a door, let alone a deal. So the cycle continues and the broker holds another sales meeting pushing what costs nothing…up front. All because of that guy in our office that can’t seem to close a door.


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