I talk to real estate agents all the time who tell me, “Man, I got 100 online real estate leads and 40 of them suck.” Ask any veteran of the real estate business how many cold calls they had to make back in the day to get just one good lead and you’ll understand that 60 real estate leads, received passively via the Internet, is amazing. Especially when you consider that you only have to close one of those leads to cover your costs. If you’re closing four or five, you’re kicking butt. Let’s take a look at why that is.
Suppose I sell you 100 online real estate leads, at $20 a lead. You’ve spent $2,000. Now, a typical agent commission is going to be somewhere in the range of $6,000, right?
All you need, then, is for one of those 100 online leads to move through the funnel and pop out the other end and you’ll pocket $4,000. That’s a pretty nice return on investment.
So, why do so many agents think that online real estate leads “suck”? Because they don’t result in instant deals. It’s pretty basic psychology and something all of us – even those who aren’t in real estate – can relate to.
People want to make money, but people are lazy. So we gravitate toward those prospects that are very close to buying or selling a home. The problem with this is that people who are weeks or a month away from buying a home are typically already working with a real estate agent. Sure, you’ll get lucky now and then and snag someone who is looking for a real estate agent, but do you want to continue to build your real estate business on luck?
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If you want to grow your business, you need to reach these people before they pick an agent. That is the place your typical online real estate leads are going to be – about six months out from pulling the trigger on their real estate deal.
So, when you hear NAR statistics, like “88 percent of consumers are researching homes online,” keep in mind that these consumers are doing so before they pick up the phone to contact an agent. These people are very early in the buying or selling process and this is where you want to grab them.
Once you have these leads, don’t expect them to magically move through the funnel, and don’t expect them to move through it on your timetable. If you concentrate on converting them, you’ll most likely have more than one eventually come through, and, for each of those, you’re in the money.
Now, if you don’t work on converting them, you need to take responsibility. Internet leads don’t suck, but your lead conversion system probably does. Agents who get leads and don’t work them and then complain that the leads are lousy are the same as people who have gym memberships and don’t work out and then complain that they’re overweight.
Your lead conversion system should be lean and tight and consumer-focused. Think of the psychological aspect of the process from the consumer’s side. What have they done? They’ve registered on a website to look at homes. A day or two later an agent calls.
Take the scenario one step further, remaining in the consumer’s shoes: You’re six months out from buying a home and in walks an agent with guns blazing. That’s probably going to turn you off, right? In this case, does the lead suck or is the agent taking the wrong approach?
To be successful with Internet leads requires several adjustments, both in your expectations and in how you manage online real estate leads.
Adjust your expectations so that you realize you need to work online leads just as you would any other type of lead. If you don’t, they’ll sit at the top of the funnel, and yeah, they’ll suck. Then, get a grip on your lead management system. Once you do both, your business will start to take off.