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Why Does Real Estate Require Relationships?




There seems to exist the premis that the business of real estate requires an agent to build “long-term relationships” with buyers/sellers.  I can’t help but wonder why.  From my side of the fence, the home buying/selling process is a transaction, which doesn’t necessarily require a relationship.

In my mind, the relationship with a first-time client develops throughout the transaction process, eventually becoming some sort of ongoing relationship.

Question: Is sending a monthly newsletter, holiday (or other) card, adding to your FB, etc. considered a relationship?  Doesn’t a relationship require some real life interaction on a somewhat regular basis.

The exception being repeat clients, friends and family, in which case the relationship did in fact did precede the transaction.

It’s not an enterprise sale, it’s a transaction

Typically around a solution as opposed to a transaction, enterprise sales are a lengthy, complex process that includes multiple stakeholders on both sides that contribute to the ultimate decision.  Once the sale is “closed” the vendor or service provider remains actively involved in the deployment and ongoing execution of the product or service – thus the “relationship”.

An example would be the need for a company to purchase a customer relationship management system.  Not only does this require lengthy system integration, but internal and perhaps external training.

Is real estate like car sales?

Let’s draw a parallel.  Like real estate, cars are a significant, infrequent purchase often based on emotion.  At a high level, the process looks something like this:  The car salesperson determines your needs, recommends best fit, and shows several models, the choice is made, financial paperwork is completed and approved, and then the keys are handed over to the new owner.

At a very high level is it so different from selling real estate?  (The reference may have you fuming.  That’s not my intent.  I have great respect for the amount of effort that goes into your profession.)

We’ve all purchased cars.  Have you formed a relationship with your car salesperson?  Personally I have not.  This is not to say I would be opposed to referring folks or providing testimonial as to my experience, provided the service was good and I’m satisfied that my needs were met.  However, I don’t consider being a referral or testimonial source a relationship.

The trust argument

Perhaps it could be argued that since the transaction is complex and fraught with paperwork, more trust in the competency of an agent is required.  I imagine in light of recent events that is truer now more than in the salad days.

As you know by now, I’m not an agent, so I can’t speak from your perspective.  But I can speak from the perspective of a potential client.  As a consumer, if I know you socially I may like and trust you as a person and know you are good and honest, but that may not sway me to believe you are highly skilled at your job.

My questions to you…

  • Are relationships with clients necessary in real estate, or nice to have?
  • If yes, why?
  • Have buyers/sellers changed their perspective now considering this more of a transaction?

photo credit

Brandie is an unapologetically candid marketing professional who was recently mentioned on BusinessWeek as a Top Young Female Entrepreneur. She recently co-founded consulting firm MarketingTBD. She's held senior level positions with GE and Fidelity, as well as with entrepreneurial start-ups. Raised by a real estate Broker, Brandie is passionate about real estate and is an avid investor. Follow her on Twitter.

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  1. BawldGuy

    March 11, 2010 at 11:51 am

    Hey Brandie — Relationships as you mean them, mean squat in real estate. In my seven years in the house market, followed by 35+ years as a RE investment broker, I can count on one hand how many clients have become very close acquaintances or friends. The relationship is very friendly, no quibble there, but we go our separate ways after each flurry of business.

    This whole relationship-to-succeed thing comes from the kumbaya crowd. While they’re tryin’ to make the world their friend, the rest of us are doing business. I really like my insurance agent, CPA, and the like, but have never been ‘friends’ with any of ’em. I have a very few clients who’ve become friends over the years, but they’re the exceptions that prove the rule.

    What I do have is a legion of folks who I trust and respect and vice versa. The rest is for the Life channel.

    Folks aren’t lookin’ for warm kumbaya feelings, they’re lookin’ for character, expertise, knowledge, experience, and RESULTS. I’ve discovered delivering consistent results generates the best ‘feelings’. 🙂

  2. Brandie Young

    March 11, 2010 at 12:16 pm

    @BawldGuy – you said it better, but you always do. Have I ever told you I love your no nonsense communication style?

  3. BawldGuy

    March 11, 2010 at 12:19 pm

    Thanks Brandie, but anyone who openly (correctly too) compares RE biz with car sales is a pretty straight talker herself. 🙂

    • Brandie Young

      March 11, 2010 at 12:34 pm

      @BawldGuy Seemed an apt comparison :: stocks up on canned goods & water to hunker down till the angry mob leaves ::

  4. BawldGuy

    March 11, 2010 at 12:38 pm

    Most won’t come, as they know in their heart of hearts you’re right. They just hate it when someone says it out loud.

  5. Nick Sweeney, DotLoop Social Media

    March 11, 2010 at 1:59 pm


    I too am not an agent, but I have worked in several fields that require a lot of interaction with customers, including a stint at Starbucks years back. I still run into some of my old coffee customers and it’s fun to say hi and catch up on the superficial details, but I wouldn’t consider them my “friends” and no, there is not any deep relationship there.

    I recently re-financed my house and my loan officer was great – kind, informative, and always there when I had a question. But we won’t be having a beer anytime soon, anymore than my dentist and I will share dinner. I went to them for a service, not to find a friend, a fact that I think BawldGuy hit on perfectly. When I sell my house, I’ll look for the same professionalism from an agent, but probably nothing more.

    Great post; thanks for the thoughts!

    • Brandie Young

      March 11, 2010 at 2:09 pm

      Thanks for chiming in, Nick. p.s. If you did have dinner with your dentist, would you feel pressure to immediately floss? he he

  6. Joe Loomer

    March 11, 2010 at 2:43 pm

    I think there’s another box you put your past clients into in Real Estate (if you only have a brain) than you do with your actual “friends.” Yes, you consumate your transaction, but my experience is the last thing you do is go your separate ways if you ever expect repeat or referral business.

    I do have dear friends that are past clients, and have past clients I don’t care to keep in touch with (few and far between). Never did I NOT understand I was hired to perform a job – the latent friendship was borne from like-interests discovered during or after the transaction – not from the act of selling itself.

    We are providing a service – in that limited sense it is similar to the car salesman.

    How you choose to cement that relationship post-sale is up to you. If they liked you (and you liked them), odds are you’ll get the referrals and future business by just keeping in touch – a very different proposition than being your bud.

    Navy Chief, Navy Pride

  7. John

    March 11, 2010 at 3:33 pm

    Relationships are necessary for a limited number of your clients. I suggest focusing on developing REAL relationships with people you think can give you referrals. That’s just good business right? No need to take all your customers to the opera but try to develop relationships that realistically could benefit you down the line.

  8. Ken Brand

    March 11, 2010 at 7:53 pm

    Words. What’s a “relationship” mean. What’s the definition of a friend? These are the questions your post poses to me.

    I’m thinking to successfully manage the transaction, a positive and professional relationship helps smooth the way. I crappy working relationship will get you fired and you certainly won’t earn any referrals. So, yes, a positive and professional relationship is important. But to be friend-friends, not so much.

    Now if you’re asking are relationships important if you want to generate referral recommendations, then the answer is a big YES. Do you have to be buddy-buddy, friend-friends. No. Perhaps the word relationship could be replaced with reputation. When it comes to referral recommendations, a reputation for trustworthy expertise is keen. How do you develop a sterling reputation if people don’t know you. If they don’t know you, how can you build a positive reputation. I’m talking in circles here, but you get the point. I think you need a relationship to develop a reputation which creates Top Of Mind Awareness…which leads to leads.

    My rambling blah, blah on the matter.

    Cheers Brandie:-)

  9. Michael Patton

    March 12, 2010 at 9:51 am

    Yes, the definition of “relationship” would seem to be the root of any disagreement here.

    In my 25+ years in the real estate industry I’ve trained a number of agents and what I’ve learned is there are basically a couple of ways of getting business.

    1. The one that appears easiest requires spending money (and yes, I can hear the screams out in CyberLand that viral marketing doesn’t cost anything) on marketing/advertising as you constantly try to be the agent that people contact when they have a need.

    You’re constantly on the prowl for your next deal and when the phone doesn’t ring enough you drop some more mail and/or buy some additional type of advertising.

    2. The one that has a lower cost of customer acquisition is to leverage your contacts/database with frequent targeted contact that encourages them to share the great experience they had with you with their friends, family and neighbors.

    In Keller Williams (full disclosure – that’s where I hang my license) we’re taught to have many contacts a year (33 of them) and only a few are an actual phone call. Most use the mail or email – all in an effort to be top of mind with the client.

    Which works better? Both do. Or neither do. It all depends on which one will the agent utilize consisitently.

    In my experience their are long term agents that focus on one or the other and there are long term agents that utilize some form of blend of the two.

    Relationships with clients don’t factor into it (my definition is a relationship involves primarily SOCIAL interaction).

  10. John Cannon

    March 12, 2010 at 1:54 pm

    I think you need to define “relationship” to really answer that question. People in these comments keep talking about “having a beer” or “having dinner” with someone as having a relationship. I believe that if I know who you are, or know someone who knows you, then we have a relationship. We can skip over some of the stuff that you have to do on a cold call, and just get down to business. I’m a loan guy, and when Realtors who have worked with me recommend me to clients, they do so because they’ve worked with me before.

    I think if you have a chance to work with someone that you know, even a little, it’s better than working with someone you don’t. That doesn’t mean you get a “pass” in that situation. If you don’t do a good job, you can still lose that client, and the referral source.

    My past clients know that I care about them and will do anything I can for them, but we don’t have to talk about our kids once a week to show that. I send out emails every month or so just to remind them that I’m still in the business, not to further some kind of “relationship.”

    So in answer to your question, I think it helps, and probably more now than ever.

  11. Steve Simon

    March 12, 2010 at 4:52 pm

    Car sales & real estate sales have more than one or two similarities. The high ticket, infrequent nature of both provides much more focus on the product and related costs than the deliverer of the service.

    In 24 years of teaching real estate license law ( while doing everthing from consulting to holding office) I have seen many propel themselves forward in spite of their persona.

    The two things that I have seen over & over in the winner (I have taught over 25,000 real estate students) are an intense desire to succeed and the ability to persist…

  12. Missy Caulk

    March 14, 2010 at 9:40 am

    If you don’t build relationships with past clients in some way, why is it hard to move and start over in a new location and have the same amount of business?

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