Christian Real Estate Blog

Referral & Affinity Programs Growing in Popularity

Study Referral and Relocation Activity 2006: "NAR and Worldwide ERC Report Strong Referral and Relocation Activity
WASHINGTON (January 11, 2006) More than 40 percent of all real estate firms participate in some type of referral program, and one-fifth of all firms have their own affinity programs to generate leads. That and other benchmarking information on different types of referral programs, including affinity, corporate relocation and Internet lead generation, can be found in the 2005 Profile of Referral and Relocation Activity, jointly released by the National Association of Realtors and Worldwide ERC, the association for workforce mobility.

Advertising, firm affiliation and years of experience are all mainstays of the real estate profession, and many buyers and sellers select an agent based on previous experience with that agent. Even so, the survey shows that a significant share of a firm's business results from referral relationships: from another broker or agent, from an employer seeking to relocate some of its employees, or an affinity relationship with a particular firm.

Nearly half of all real estate firms surveyed have either a business development department offering relocation services, or a relocation department. The typical real estate firm had a median of 10 employer-assisted relocations in 2004. Other key findings in the 2005 Profile of Referral and Relocation Activity include:

---Employer relocation programs are most popular with large firms, with 46 percent of those firms participating in such relationships. Internet lead generation is the most frequently cited by small firms offering referral programs.

---Nearly one-fifth of all real estate firms have their own affinity programs that were developed internally, and then promoted to outside groups to generate leads.

---Over one-third of real estate firms offer a reduction in the commission percentage amount as a benefit to both homebuyers and sellers who are members of an affinity group.

---Almost one-third of real estate firms have an agreement with a lead generation company that provides the firm with customer-contact information in exchange for a fee. A majority of firms also generate leads from their firms' own Web site, or via Internet advertising. The rate of conversion from leads to closed transactions generally is higher from company Web sites than those from other Internet sources.

---Forty-four percent of firms report that they participate in the real estate owned (REO) business, where lenders outsource the sale of foreclosed properties to a real estate firm.

---One-quarter of firms expect their REO business to increase during the next year."

posted by Justin Smith @ 1/24/2006 07:19:00 PM