Brian Meara explains that even with no money to spend on money, this referral method will bring you more deals over time.
Learn more about how once you do a few deals with a realtor, specifically for short sales, you’ll be able to build credibility and receive referrals from the realtor you did the first deal with.
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investment industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Brian: Hey everyone, Brian Meara here with another episode of REI Classroom. And today, we’re going to talk about the realtor referral method. is Mike: This show was sponsored by PassiveRental.com
Brian: Okay, guys. When I got started in real estate investing . . . let’s just back up and talk about how I got started here. I was coming off of a divorce. I had absolutely no money, therefore, I had no money for marketing.
Well, marketing in real estate, as an investor, is a very big thing. I mean, even if you’re an agent, you want to canvas an area. You’re going to put out postcards. You’re going to send out mailings. You’re going to do this. You’re going to do that. It costs money.
Well, by default, I had to find a way to generate leads and how to work with people and get business without any money, with no marketing budget. And let me tell you what, that’s not easy.
So what we’re going to talk about here today, the realtor referral method, you’ll see very quickly why this just makes sense for everybody and why it costs no money. Specifically, we’re talking about short sales.
A short sale listing agent, some realtor who has to list a short sale, has a guaranteed situation at hand, which means they’re going to have to negotiate that short sale. Unless, of course, they have someone in their office, or they’re working with an attorney, which more times than not, that’s not the case.
I find that 90% of agents with short sales out there are doing the job themselves, which, by the way, they shouldn’t be doing. No offense because I’m an agent too, but you were never thoroughly trained how to negotiate firsts and seconds and FHAs versus jumbos and what to do when the lean doesn’t cooperate.
You don’t know these things. You weren’t trained in real estate school, and, therefore, again as no offense, it’s just not your job. You should be buying and selling homes, working with buyers and sellers because that’s what agents do, right?
Well, somehow in short sales, they’re now expected to become a negotiator and know how to do these things. So when you come along and you offer the value proposition of being able to, with you and your team, do the heavy lifting for them, guys, the dealing with the bank, you just rode in on a white horse. You know what I’m saying? You’re like the white knight. You’re the savior here because they’re now able to free up that time.
They don’t have to talk to the bank. They don’t have to get on the computer with the equator and log in and deal with all this garbage. They can focus on what they want to do, which is going out there and listing another house or working with another buyer or working on their marketing campaign because you and your team are doing the heavy lifting for them.
So when we talk about the realtor referral method, we simply mean working with agents with their short sales and making the offer that you’ll never talk to the bank, and we’ll never touch your commission. Famous little tag line that we created and I actually coined many, many years ago, probably back in 2008, 2009, whatever it was, basically saying to people, saying to agents specifically, “Work with me because you’ll never have to talk to the bank and I’ll never touch your commission.”
Well, you’re saying two very important things there. You’re letting them know that they don’t have to do the hard work, which, by the way, they don’t want to do anyway. If you ask any agent who’s done a short sale or who has experience with them, they’re clearly going to tell you they have no interest in doing it, and they hate doing it, and what a nightmare it was. And so that’s solving that problem.
And then you’re letting them know at the same time, we’re not going to touch your commission, meaning, hey look, we make our money as investors. And there are many different ways we get paid in these deals, one of which is not asking you for a cut of your commission.
Now, if you are a licensed agent and you have the ability to get a referral, sometimes I will have to put a little annotation there that sometimes it’s okay to get a referral commission. Meaning, if you just can’t get paid at all and you are an agent, you do have that added benefit to ask for a small referral, but I would suggest setting that up ahead of time.
And, frankly, considering that we close, in our method, about 95% of every deal we touch, we generally never have to rely on that. And also, if you’re investing outside of your area, that’s probably not going to work anyway. So stick with the tag line which is strong, which is: You’ll never talk to the bank and we’ll never touch your commission.
What that does is it builds credibility for you with the agent that you’re doing that particular deal with. Well, let me explain a little quick thing to you. They’re not the only agent in their office that either has or ever will have a short sale. So when you work with them successfully, and you will, and they didn’t have to do all the hard work, but got paid anyway, they’re going to easily and quickly and happily refer you out to other agents in their office.
So now, you’re going to be referred amongst that office with the broker. Once you have a success or two, you can then approach the broker, as we teach, who can then refer you to other brokers, maybe the other Keller Williams that’s on the other side of town, etcetera, etcetera, or in the next state. And what happens is your network, your word, your credibility, your sphere of influence if you will, starts to grow and spread out. And one realtor will refer you to another and that’s how it starts.
Now, this doesn’t happen overnight. This could take a good six months to a year to get set up, but what’s nice is that by you initially approaching them, they start approaching you down the road. So you’re putting out all the efforts in the beginning to get these deals, but by working hard and doing the right thing, your reputation will precede you, like they say, and down the road, like we have today, 6, 7, 8, 10 deals a week coming across our desk, guys, most of which, we’re not interested in. We refer out, etcetera. We keep a few in-house that we take, but the deals are coming to us.
Now, it certainly didn’t happen that way, and I don’t want to mislead you. But you start off by doing this and that’s what we termed and call the realtor referral method. Does it work? Yes, it works. And you don’t have to put out any money to do it. You just work really hard and it will come back to you. So hope that helps. Give it a shot.
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