Finding the Hidden Referrals in your Database
By Tom Tezak
Resort Agents are Stealing your clients and they feel Really BAD…
By Tom Tezak
Please Help Them Stop
The $15,000 Question
Let me start with a story a few years ago as I was doing my year end numbers and I realized something rather startling.
I had done $35M in business. Not a bad year selling Resort Real Estate in Maui, But that was not the interesting part- What I realized was that only 1 of my 31 transactions was the result of an inbound referral. That was slightly startling, but the really startling part of this, was that everyone of those 30 clients owned a home in one of my feeder markets- and I assume most of them used a Realtor to buy that home. But yet only one of those Realtors thought to ask their clients The $15,000 Question:
”Are you thinking of investing in a Resort or Second Home?”
It’s A Simple Conversation
I am pretty sure at least one of you reading this has had this experience: You see a client and they are all excited as they proclaim, “guess what- I just bought a vacation property on the coast!” You take a deep breath and you say “I am so happy for you.”
But you're thinking to yourself- “Why didn’t you call to let me help you??”
Well the real question you should ask yourself is: Why didn’t I ask my clients the “$15,000 Question”...Are You Thinking of Buying or Selling a Second Home?
Because quite honestly, it’s not their job to ask you. And they have no idea you can help! So you need to let them know.
Wouldn’t you like to sell Real Estate in Maui or Florida or Vail, The Hamptons or any
Let’s Do The Math
Imagine if you make one outbound referral to an out of market agent for a $500,000 property,
A $500,000 sale at 3% commission and a typical 25% referral = $3750 referral fee
When it sells it will generate a referral of around $3,750 and the only thing you had to do was send an email, do some research and make a phone call to your partner agent. The rest is all done by the other agent.
Now imagine if you did four $500,000 referrals or even better, one $2M referral in a year-
That would generate an extra $15,000 in GCI.
Not bad for starting the simple conversation.
You might be saying, “how am I going to get 4 referrals?” It's easier than you think when you know the stats.
“THE STATS”
From the NAR Investment & Vacation Home Buyers Survey: 10% of Homeowners with a Median Household income of $90,000 or more are Very likely to buy a Resort Property, 2nd home or Investment property in the next 2 years!
So think about this: how many people are in your Database, your Sphere of influence, Follow you on Instagram, Are friends on Facebook or Dance with you on TikTok? With that in mind, 4 Referrals is not unrealistic, in fact it's pretty low. But here are some more fascinating stats:
87% of vacation properties were purchased at least 50 Miles away from their primary home
25% of Vacation Properties were purchased in Urban/Central City Locations Vacation Home, 2nd home and investment properties average 20% of all home purchases every year!
Rising Net Worth Boosts Demand for Vacation Homes
“As of 2018, Household net worth was at an all time high of $100.3 Trillion...and that is nearly double the level in 2008 when wealth was cut during the recession. Some of this tremendous build-up in wealth , although concentrated, has been channeled to increased demand for Vacation Homes”
Lawrence Yun, Senior Vice President, Research And NAR Chief EconomistReal Estate Investors Buy More Than Once More Good News!
Here are my favorite stats of them all, these are the ones that really should get you thinking:
23% of existing vacation home buyers are likely to buy an investment property
21% of Vacation Home buyers are likely to buy ANOTHER Vacation Home within 2 years
Real estate investors buy Real Estate often, lots of it... not just one property, because they see the value and like to reposition their portfolios. Just like stock investors buy more than one stock.
Referrals are such a great opportunity but unfortunately most agents do not put much effort into getting them. When you do the math, there is no more efficient way to generate revenue in your Real Estate Business than Realtor to Realtor referrals, it is one of the best spokes you can put in your money wheel to help reach your financial goals. And these hidden 2nd home referrals are a golden opportunity and make this spoke even stronger.
The Other Second Home To Remember
Now, let’s talk about investment real estate. For some of you, it’s not a problem to sell properties in your market area that generate a solid return on long-term rental investment. However, in a lot of markets in the country, it does not make financial sense to buy investment real estate for long-term rentals in your local market.
As we discussed earlier, people like to diversify their real estate portfolio by buying investment real estate. Having an opportunity for them to buy solid investments with great returns is another avenue to generate outbound referrals. Understanding what markets in the US offer exceptional returns on investment property will expand the opportunities for referrals. I knowselling rental properties in Maui, San Diego, New York, or LA is difficult becasue the ROI (Return on Investment) is very low compared to buying rental properties in states like Arkansas, Alabama, Missouri, etc.
Being educated on alternative markets can help you, help your clients who are investing in investment real estate, allowing them to generate more attractive returns.
By being armed with this information, you can educate your clients in your lower performing market on other markets to invest in and generate 1031 listing opportunities, and allow them to leverage their portfolio.
So when you ask someone if they’re thinking of buying a second home, it could be for pleasure, or it could be for Investment- Either way, there are referral opportunities.
Why Referred Clients Are Better
Referred clients always tend to have a greater sense of loyalty.
Referred Clients are typically closer to the decision making process. When you refer to an outside Market you become an inbound resource for referrals from those agents and their fellow agents from that market. There is no higher return on your time invested than by creating referrals
If the household income in your database is on average over $90,000 per year You Likely have between 6% to 10% of the clients in your database that are currently thinking about investing in Real Estate in Resort, Second Home or investment Markets outside of your market area. So do the math, if you have 1000 people in your database with a household income over $90K, that means 60 to 100 of your clients are likely in the 2nd home, resort, or investing market. Dont Miss this
How To Ask The $15,000 Question
Asking for referrals is so simple and non-invasive and all you need to do is send a simple email, or ask the right question on social media to connect with potential buyers and sellers. Or even better, ask the question in conversation.
All it takes is 1 email, 1 social media post, or 1 question during a client chat
The best part of it all is that all of these techniques are FREE.
Example of an Email to Send
Subject Line: Are you thinking of Buying or Selling your second home?
EMAIL BODY:
I was just checking in and thought I would see how you're doing with all the crazy events going on in the world. Recently several of my clients have reached out to me because they have started thinking about buying a second home and asked me if I could help them. It dawned on me that my friends and clients may not be aware but I have a network of Resort and 2nd home and investment agents across the country and if you have been thinking it is time to invest in some additional real estate anywhere in the country or actually in the world I can help you.
Knowing there are so many ways to search real estate on line or while on vacation, I came to realize that the biggest problem my clients were having is not having a relationship with a great agent they felt comfortable with. This can make the buying and selling process away from home a bit scary and daunting. So I wanted to let you know that I can help, I have an amazing network of professional, experienced agents that I trust and can connect you with. My clients that I have already assisted have found this to be a far better experience than randomly selecting an agent they find on the internet or at an open house.
If you are thinking this might be a good time for you to expand your Real Estate portfolio I would love to assist you in finding a great agent wherever in the world you need help with your 2nd home.
Regards
Tommy Bahama
Your Trusted Real Estate Advisor
Social Media
In taking it to Social Media, you may need to be a little less direct depending on your network and their desire for privacy as well as their Demographics.
Here are some ideas of posts you can use on Facebook, instagram, Tik Tok, and reels:
When you retire do you plan on moving to a new community or stay where are you?
Where is your next home purchase?
Would you rather be on the beach? On a mountain, Golf course, Lake, in the country, or in the city?
Have you considered buying a property to rent on Airbnb?
If you were going to buy a second home where would it be?
Of all the places you vacationed, where would you like to live?
My favorite destination is ________________.
Where do you want to live when you retire?
Tell me your rental property horror story.
Is your vacation home on the beach, the mountain, the lake, the city, or the Golf course?
Have you changed your plans after living through COVID 19 POLL: On vacation I prefer to BEACH, GOLF, SKI, FISH, READ etc.
As in all marketing, try different approaches and techniques to see what works best for your audience.
Continue the Conversation Offline
The key when working in Social Media is taking the conversation offline to a private message conversation once you realize that your client is in the market for a second home.
Most clients want to keep that discussion private so as to not brag about their financial ability. Start the conversation and begin with probing questions of When, Where, Why (the most important) and let them know you can help. Using the same dialogue from the email body.
Script For Asking The $15,000 Question:
“Have you ever considered buying a second home? Many of my clients have been talking to me about it lately because they know I have a great network around the country in both resort and 2nd home communities. Has it crossed your mind? I know personally I have/or want to buy a place in . ”
Know Where They Go
Once you start the conversation with your clients, they will get excited if they are thinking about it and spill their guts, Because for them it is a moment of accomplishment and they know you are safe to share their enthusiasm with. At this point you want to ask lots of questions and get as much detail info about what is important to them and what they want.
Once you determine the most popular destinations for your clients, It will also help to have agents that you know in your network in those places because this is where they ultimately buy.
The last thing I would encourage you to Consider is networking with some 2nd Home/Resort agents the Resort Markets your clients travel to and invite them to a seminar in your area “Buying your first 2nd Home” with special Realtor Guests from Miami, Naples & the Hamptons (or where ever)
It will be the fastest way to find the referrals and provide a great service for your clients at the same time.
Let’s Connect Online
I hope this was helpful, If want to track me down here is where you can find me:
Check out my Podcast “Selling The Dream” on all the podcast Channels and Youtube, and if you like it leave me a review on iTunes
Join our Facebook Group “Resort & 2nd Home Agents”
Like my page on Facebook “Lifestyle Maui Team” or “Tom Tezak”
Instagram “Lifestyle Maui” “TomTezakMaui” “2ndHomeAgents”
Let me know when you get your first Referral in a 2nd Home market
Youtube com/lifestylemaui
Tom TezakHave Tom Tezak Speak At Your Next Event
er at Hawaii Life - Wailea Maui Office ctor of Global Affiliations - Hawaii Life Estate Coach - CSI coaching affiliated with Tom Ferry
hing
30 years expereince selling Real Estate
100 Realtors in Hawaii by Hawaii Business Magazine
Selling Author of "The Essential Guide to Buying and ng Luxury Real Estate"
of Selling The Dream Podcast tor of 2nd Home Agents Facebook Group
Video Marketing Award 2021 presented by Who's Who in ury Real Estate
1 5% of agents in all of the US rly $1 Billion in closed sales mer Co-owner of Wailea Realty, which Tom and his partner built and sold
Tom Tezak Training, LLC