The Power of the Database

There’s power in building a real estate database. Let me explain why. I see a huge amount of real estate agents using their hard-earned commission dollars to pay for leads. Some agents can literally pay thousands of dollars for leads on Zillow or Realtor.com; you’re racing every other agent who has paid for those leads to get the sale. It’s a game. 

You’re taught that you need to respond in five minutes, you’ve got to do this thing or that thing – and it can be exhausting. This way of working has become a reality for many real estate agents. To them, it’s just a way of life. 

But what if I told you it didn’t have to be that way?

I’m not judging anyone who does find success in this way of conducting business or enjoys running their business this way, but it’s not for me. 

• Tip: Build a real estate database with 150 people, all of whom you would recognize if you ran into them at the grocery store, and you’ll create a steady stream of opportunities month after month. 

I’ve been working by referral for over 20 years – and during boom times or lean times, it works. Working by referral brought in opportunities for me immediately following the housing market crash in 2008-2009. That’s why my agents and I managed to have a good business coming out of 2011, 2012, and 2014. 

From what I’ve seen this year in our business, we’re coming up on potentially tough times again. However, I’m confident that our agents will come out all right – perhaps not unscathed – but real estate referrals gathered through our model will help them continue to have incoming business opportunities where others can’t find those options. 

We’re going to be out there growing our real estate databases, making connections, nurturing our existing relationships – but other agents will be scared to death, hiding out at home, and dealing with potential lead scarcity from the big companies. 

• Our agents don’t experience the same “lean times” as agents who don’t work by referral do – and that can be a big difference in the continuation of a long-term, successful real estate business. 

I think one of the most beautiful lifestyle benefits of working by referral is the freedom it grants you in regard to who you can work with. 

We’ve all had those clients that we maybe didn’t get along with or mesh with for one reason or another – and we wouldn’t want to take their call again, necessarily. If money was something to consider, and any lead was something we needed, you probably would need to pick up that phone call, right? If you work by referral, you make a decision early on that you’re only going to work with people who know, like, and trust you. 

As real estate agents, we sometimes have to do things we maybe wouldn’t prefer doing in order to close a sale. But I wish more agents would think of themselves as professionals and seek out the respect we grant to other professionals, such as doctors or lawyers. You probably wouldn’t call your family physician at 10 o’clock at night and demand an audience with them, after all.  

• When you work with people who you know, like, and trust, you can depend on that trust being mutual. 

The people in your database will respect you as a professional, and that gives you a little more breathing room. You don’t have to run your business working by a big company’s rules, answering the phone every time it rings no matter what you’re doing, or building your life around work. By working by referral, you have more freedom to build your work around your life. 

Chris’ Story

My last real job was as a District Manager for Target stores in the Long Island and New York City areas. When that ended, I had no desire to work in retail again. I certainly had no desire to work for anyone else. Between you and me, I was a pretty horrible employee. I wasn’t sure what to do, but I got my real estate license because it seemed like the thing to do at the time. 

• Real estate is more self-driven, which can be a great fit for people who, like me, don’t function best as traditional employees. 

I ended up moving back to Ohio, joined a local firm, bought a bunch of properties for myself, and just jumped in with everything I had. 

The firm I joined had a really old-school office with a bullpen and listing brokers on the outside of the perimeter. The newer agents and those of us who weren’t big listers were in the bullpen, and we had to do floor time. This included answering the phone and showing houses on the broker’s behalf. We got a 50/50 split, which was pretty standard. 

I didn’t really enjoy that, and I couldn’t help but think there was a better way. I got super lucky and, somehow, the marketing team for Top Producer found me. This was back when Top Producer was still desktop; it wasn’t even online. The best thing about that experience was that brokers always needed someone to post open houses for them. 

I ended up hosting open houses like a crazy person because I had just left a job where I was making really good money, and now I was making nothing. I thought the way to make money was to do open houses and everything else by the book, so that’s where I focused my time and energy – but then I found Top Producer, a type of real estate database software. 

It was the first real look I had into referral-based models because it had all these templates, you could add people to the database, and then it would prompt you to print a letter. These letters were usually pretty simple, like “thanks for coming to my open house,” but it would put them on campaigns. After you got letters written that suited your needs, sending them was easy as pressing a button. 

I’m an introvert – and there’s no questioning that. However, I forced myself to get into a routine where, after an open house on Sunday, I would go into the office on a Monday evening and call everyone who had signed into the open house the day before. I didn’t know what I was doing at the time, but I was trying to find someone to work with. 

The beauty of this was that if I found someone I wanted to work with, I could add them to Top Producer. Before too long, I had around 40 names in my database – and within 4-5 months, it was too much to do the work required by Top Producer by myself. I hired my first assistant to come in for a couple of hours to print everything off, put them in envelopes, mail them out, and all I had to do was sign my name. 

• Within my first year in real estate, I became one of the top-producing agents in my office – and it had everything to do with building a database and working by referral. 

I ended up getting my broker’s license in 2003, and immediately bought a couple of REMAX franchises. The best thing about being associated with REMAX was that it introduced me to Brian Buffini, which helped me expand the referral-based business model that had been so successful for me in the past. Brian is the foremost authority on referral-based real estate businesses, and he was able to articulate to me why everything I had been doing with Top Producer worked so well. I eventually had my own Buffini coach and was able to expand and learn the system through that company. 

Put Yourself Out There to Make Lasting Connections

In 2014, we started ROOST Real Estate Company with the idea that I wanted to provide my agents with the same support that Brian and referral-based models prescribed. We wanted them to have everything that agents who wanted to work by referral needed and wanted to teach them what working by referral means so they had a deeper understanding of everything they needed to be doing in order to be successful like I was. All of our marketing technology is designed to support and amplify the habits and behaviors of the greatest professionals in our industry. 

• One of the key tenets of working by referral is making connections. 

I talk about my motto, “Connect, Practice, Track, Grow,” but connect is really the first part. Connections come first. Asking for real estate referrals can be hard, but there are lots of ways to make this happen and build lasting connections. 

Some examples of connections can be:

• A phone call 
• A text message
• A DM on social media, such as Facebook
• Pop-by visits

Doing a pop-by can be really nerve-wracking, especially for introverts. You may feel the same way about making phone calls. I actually grew to love pop-by visits. It’s part of what helped me build my business. 

Here’s an example of what I’ve done in the past. For Easter time, I would buy Peeps – “Have my peeps call your peeps.” I also used to go to grocery stores and buy items to make S’Mores kits, or buy the three packs of mustard, ketchup, and mayo that you can sometimes find on end caps. There are these cool pop-by tags that have little jokes on them, and you can add these to little gift baskets that are themed. It’s low-tech, but it’s high-touch. 

It helps foster a connection between you and the clients in your database, and it doesn’t require a great deal of output cost on your end because these items, for the most part, are reasonably inexpensive. 

When I was out doing my pop-bys, I would pick 20 or 30 people who I had worked with in the past or recently had worked with. Do this a few times a year, 3-5 times, or however often you’re comfortable. Don’t feel bad if you’re nervous doing them, because I’ll tell you there were so many times when I’d be out doing my pop-bys and I’d hope nobody answered the door. 

My claim to fame – and feel free to steal this tip – is to get your gift together, make sure it looks nice, and make sure the person you’re leaving it for knows it’s from you. 

• Leave it on their front porch and, if they’re not home, take a picture and text them the picture with an easy message like: “Hey, sorry I missed you, I hope you have a Happy 4th of July.” 

Base your message around the theme or occasion you’re trying to capitalize on. You’ll have the best text interaction you’ve ever had with anyone.

Final Thoughts

Ultimately, however many names you collect in your database is up to you. There are numerous strategies on how to ask for real estate referrals that help agents foster and grow connections with potential clients, existing clients, and others who could lead them to client referrals. When you have a robust database with ample connections, you will see your business grow and you will make money. 

More names equal a greater potential for sales: The top real estate agents who work by referral all share this in common. They all have a healthy database, they keep up with their connections, and this leads them to success. 

There’s power in the database once you know how to use it and commit to maintaining and adding to it on a regular basis.