Leads are the lifeblood for anybody who makes a living selling something. For a real estate agent, leads are the first step in a process that seeks to convert leads into prospects, prospects into clients and clients into closed sales. Closed sales turn into hefty commissions. Because real estate sales commissions can involve substantial sums of money, selling real estate leads is a big business. Just about everyday I am approached through either email or telemarketing by a variety of people trying to sell me leads. But where do all the leads come from?
When I first got into the real estate business 30 years ago, leads literally walked in the front door or called on the phone. I worked in a well located office on a fairly busy street and many people interested in buying real estate walked in off the street to make inquiries. Agents were assigned desk duty for several hour blocks during the day and the duty agent got to talk to whoever walked in or called in asking for information. The number and quality of leads depended a lot on the location of the office and the reputation of the company, but in general, the amount of desk time versus the number of good leads was not a great trade off. Experienced agents developed their own lead generation systems that relied heavily on personal networking – meeting, greeting, handing out business cards, running ads with more emphasis on the agent than the property and asking everyone you met if they or anyone they knew was thinking of buying or selling real estate.
Sphere of influence leads are still the best. A referral from a satisfied client who passes your name along to a friend or relative is about as good a lead as it gets. The referral contacts you because they are ready to buy or sell and the good word put in by the satisfied client gives you the edge. Many times the client will only contact one agent in a situation like this, so a good agent ought to be able to convert a very high percentage of these types of leads into paying business. It takes many years to build up a good referral base, but once established, it can keep a good agent busy.
At the other end of the spectrum are the leads that the telemarketers and email spammers are trying to sell me daily. These are on line leads that come from someone visiting a web site and putting in some kind of contact information. Many agents try to capture these leads from their own web sites, usually by making visitors register in order to access information. One common way to do that is to offer an MLS search feature on a web site with the first few results given freely, but with a pop up registration required to go further than that. The leads for sale generally come from web sites offering something free (home valuation, insider information, etc.) in return for an email address. The web site then sells these leads to one (exclusive leads) or several (non exclusive) agents who have agreed to purchase a set number of leads every month, usually based on the zip code the web site visitor has inquired about. As you might guess, conversion rates on these leads tend to be quite low. I recently asked a telemarketer what sort of conversion rate their leads typically provide and he quickly assured me I should expect to close at least 5% of them. When I asked him where that figure came from, he said his sales manager. When I asked where his sale manager got that figure from, he was lost for words. I suggested he call me back when he had verified data to confirm that rate. I am still waiting
Another source of generally poor quality leads are sites like Zillow, Trulia, Realtor.com, etc. These sites aggregate listing data from brokers and other sources and sell agents placement next to search results. Click the button asking for more information and your contact info will be sent to several agents who may know absolutely nothing about the property or area of interest. They sell subscriptions again usually based on zip codes and promise to deliver agents a certain number of impressions (your face and contact info will be displayed next to someone else’s listing) per month. Audited figures verifying the numbers they claim tend to be difficult to come by, but of course they are very nice people, so would have no reason to lie about such things. Impressions are supposed to lead to contacts that lead to sales, but at a rate that nobody seems to know.
If you are reading this, you are probably interested in buying or selling real estate. If you want to be a lead, let me know. Send me an email or call me on the phone. I don’t buy leads, so you got here by searching for something I offer or because someone told you to check out my website. You are an organic lead, the best kind of on line lead there is, and I would be delighted to discuss what your needs are and how I can help. Because I don’t buy leads, I can offer unique programs saving my clients money while providing them the highest level of service and guidance possible. That works for me and will probably work for you too.