Converting Internet Leads In Real Estate
The 2017 national association of realtors® profile of homebuyers and sellers now reports that 95% of all buyers use online websites to look at real estate through some stage of their search process. With a shift to digital over the past decade mediums such as radio, TV, bus benches, print, and direct mail have become less and less effective, and more cost prohibitive with a lower rate of return. Before you begin investing money in internet leads, you must create a lead funnel or you should save your money.
If you need to get your own website yet, I have a DIY real estate website tutorial. Check out my article on REDigitalUnicorn: How To Create a Website in WordPress Step By Step.
Real Estate Lead Conversion Statistics
The average real estate agent’s conversion rates for online leads is abysmally low.
Having said that, these statistics usually don’t consider the agent’s market, experience level and the quality of leads. The quality of leads, especially, is integral to converting your online leads.
In 2015, Inman reported that internet lead conversion for real estate dropped to 0.05 percent — with a return on invest at negative 32 percent. That means real estate teams were losing money in an attempt to generate online leads, and experts expected this negative trend to continue.
However, I’ve built my luxury real estate business on online leads. How?
First, lead quality begins with the medium you’re working with — for example, on a website — and ends with the user’s experience on the landing page. You’ll want both to be strong.
Second, consider how you’re securing your internet leads. This is key.
You can buy real estate leads through portals like Zillow, Homes.com and Realtor.com. Also consider companies like zBuyer, HouseHunt or Homegain. Depending on your market, you can sign up as a referral agent on HomeLight, Movoto, Redfin or Estately.
These portals charge a 30% referral fee at time of closing, but there’s no risk to try it out.
The lead providers listed above are securing leads through organic SEO traffic or by running display or search ads on search engines or social media platforms.
Display ads are the cheapest way to advertise. These are the ads that interrupt the user by appearing in a banner or in a column alongside a webpage. However, I found that the quality of display ad leads for luxury real estate prospects to be poor because there was no initial intent. This means the people who saw the ads had no intent to buy a home; they might have just been daydreaming.
The ads presented on Facebook, Twitter and Instagram would also be considered display ads because they’re placed in front of a prospect who might not be intentionally searching for real estate.
A search ad, on the other hand, shows up when an intentional search is performed with matching keywords, like “San Diego luxury homes for sale.” These searches are the most expensive, bidding upwards of $35 per click in competitive high-cost markets. Keep in mind a click is only a visitor — not a lead. A click could also be coming from your colleagues, competitors or the SEO guys who are trying to sell you their services.
In 2012, $1 million-plus leads were running at $35. Then, in 2017, that same lead cost $350 to $450.
The effectiveness of Zillow, Trulia and Realtor depend on your market and the price point of the area. In the high-end area I experimented with for Realtor, the prospect thought they were inquiring with the listing agent and had limited interest speaking with another agent. Zillow and Trulia are beauty contests, both based on the profile photo and how many five-star reviews you have.
Overall I highly disliked all three and invested a fair amount of money to have a good read on the results.
Establish A Real Estate Lead Follow Up System
Once you have a lead, know that conversion involves courting your prospect over a period of three months to more than five years.
It’s imperative to understand that you’re not the only one spending this time with prospects; only 3 percent of your leads will transact in the first four months — and not necessarily with you.
Also understand that an online prospect has given their contact info to many sources including Zillow, another local colleague’s website or a rebate agent site like Redfin. The buyer on my most significant sale told me she had 14 agents texting, emailing and calling her. Four months later, I was the only one still communicating and conveying competency.
The first 45 days are the most critical time to make a connection. Every time you communicate with a prospect, it’ll help solidify your relationship. For that reason, you cannot be sloppy, lazy or unintentional with your lead follow-up system.
The customer relationship management (CRM) platform I use is Follow Up Boss. I tell everyone that it’s the CRM for dummies because it’s so easy to use. It has saved me more than once when I unintentionally dropped the ball with new leads.
For example, in the summer of 2016 I sold a $3 million house in La Jolla, thanks to the Follow Up Boss immediate text to phone that goes to a new lead. I’d been sick and was sleeping at 2 p.m. when the prospect started texting me back from the auto response. Thankfully, it wasn’t a long nap, and I was able to respond back to the buyer’s texts in time.
Another time one of my prospects answered my buyer drip email that asked, “What is your budget and time frame?” This prospect ended up purchasing the most expensive house I’ve ever sold, thanks to the buyer and seller lead campaigns we have set up with a short message and open-ended questions.
Altos Research is another way to stay in front of your prospect with its “How’s the market?” feature. I’ve had leads respond to this newsletter and ignore all other communications. The newsletter in printed format gives you something very professional to hand out during a first-time buyer meeting or on a listing presentation.
Enter all leads immediately into whichever internet data exchange (IDX) solution you are using and guestimate their budget and search parameters based on what piece they were captured on. The daily new listing updates are the most basic way to try and get a response.
However, for prospects looking for very specific property, it’s not a good idea to put in an automated IDX drip because they could become angry if you are sending them listings they already told you they don’t want. Instead, set yourself up on an multiple listing service (MLS) alert so you can immediately see a fresh listing and review it for relevancy before forwarding.
High net worth individuals (HNWI) are successful people who are very busy and have a social schedule just as complex as their business schedule. They often do not respond courteously to your emails, texts and calls. For that reason, get used to being ignored. However, they do see your emails and will let you know when you can be of assistance.
One of the best ways to communicate with an uncommunicative prospect isto comment via email regarding the listings they look at. Your IDX should have a way to show when a lead opens your email and views a property. I find that these confidential remarks often provide great magnets such as trustee sale, very motivated seller, seller has found replacement property or seller will entertain all offers.
You can also email property videos, 3D tour links and any inside information you know about the complex, neighborhood or community. Maybe it’s a condo complex, and litigation was just settled the month prior.
Lead Follow Up Process: The Importance of Snail Mail
If you acquired your leads by back-dooring them with forced IDX registration, your conversion to closing will be much more difficult than if you earned their call or email based on a piece of content you wrote.
I’ve found snail mail makes a significant difference in conversion. Oftentimes, you can Google your lead to find their current home address or work address if they didn’t provide it in the sign-up form.
Realtors Property Resource is an invaluable resource that cross-checks home ownership nationwide. If you find they own a home worth $2 million in Dallas, you know you’ve got a qualified prospect.
When sending snail mail, I buy high-quality Papyrus cards that come with a gold hummingbird seal. Do you think the Zillow agent or Redfin agent are sending this type of marketing in the mail? I sold a house in 2012 for $2.875 million after the lead picked up the phone and called my business card that was included in her handwritten notecard.
I also found the Institute for Luxury Home Marketing materials useful. There, you can find elegant business card jackets for your cards, Crane brand executive-size letterhead and envelopes with the ILHM logo, and metallic foil logo seals to add to your marketing materials.
Real Estate Lead Conversion Phone Scripts
If you’re following up with a call, make sure you’re high-energy and ask many open-ended questions.
It might help for you to stand up or pace back and forth to keep your energy level up. If you need to see an example of high energy, watch any Tom Ferry video on YouTube.
I do not use a script; however, my natural conversation has become a habit, thanks to years of practice.
Here are a few prompts to help you along.
I always assume the lead’s name when they pick up the phone, unless, of course, a male answers and your lead name is female. This is better than always asking “May I please speak to John?” or “Is this John?”
Say: “Hi John. You were looking at homes for sale today in San Diego, and I’m just calling to see how I can help you further.” I find it’s important to convey you are a no pressure salesperson and to keep the initial call very low key.
The typical response is, “Oh I’m just looking right now,” or “We are just starting to understand the market.” A great agent response would be: “What’s most important to you on your wish list? Horses on your own land, schools, golf course, ocean views or a gated community?” You’ll choose what’s appropriate for your area. This is typically enough to begin a light conversation.
Next, you’ll want to ask: “What do you think your budget may be?” I’ve found this language is the best way to discover price range. Also consider asking, “Are you all cash?” This is a very flattering assumption to make.
You can also ask, “If you found the perfect home, are you ready now?” This question helps you discover timing and the best follow-up plan based on the prospect’s timeframe.
You also want to confirm the correct email address, spouse or partner name and the best phone number. It’s also advisable to try to get their mailing address to send them info on area country clubs, private schools, tennis clubs, horse boarding, area maps — whatever you can pinpoint in your conversation.
One of the most common immediate objections I receive is: “I already have an agent.” When I first began and was still getting my confidence I would say “Oh, OK, I’m sorry to hear that,” and hang up.
Now I say: “I appreciate your loyalty. Over 80% of our clients already have a real estate agent in mind when we begin working together. I have one of the most successful real estate teams in San Diego. Due to the amount of business we do, our relationships with the other brokers in town are very strong, and we constantly get a heads up on pre-market property. It has helped many of my clients gain access to properties not on the MLS, pre-market pocket listings. Why don’t we agree to keep an open mind?”
This accomplishes a couple of things. First, you just planted a seed of doubt that maybe the agent they think they’re working with isn’t as dialed in as they could be. Second, it could help get a sale.
On a Saturday morning in August 2013 around 11 a.m. a lead came in. It was the fiancé of a very prominent big-brand CEO. She stated they already had an agent and had been searching for over a year now. After my objection statement, I got her to share her wish list and budget.
After the call ended I got on the MLS to match parameters. I called her back and said I’ve found two properties — one for $3 million and one for $10 million, which fit everything you’ve just shared with me. She was very hesitant and uncomfortable but said, “OK, we’ll look with you today, but if one of these two properties are the ONE, you’ll have to pay a 50% referral fee to our agent.”
I then found out her agent was out of town. After looking at two properties, and a sunset second showing, I co-sold the second most expensive trade in downtown San Diego in 2013. When the agent returned from his vacation, he was understandably very upset. The day after the close of escrow he called me and said, “I don’t know exactly how this happened, but I’m putting your check in the mailbox now.”
Sometimes in the luxury real estate market you are on the right side of things, and other times you end up empty-handed.
The second most common objection is: “I’m just starting my search. We aren’t ready yet.”
Essentially they are trying to get you off the phone. In response, celebrate the long process that is to come enthusiastically: “Many of my clients are just in the preliminary stages of researching homes when we first meet. I am happy to help you when the time is right for you.”
This immediately softens the prospects defenses as they realize they you aren’t trying to push them into buying today and a fact-finding conversation can resume.
Need More Information on Real Estate Leads?
You may find a couple of our other articles helpful:
- Instagram Tips For Real Estate Agents
- Pinterest For Real Estate
- How To Create A Real Estate Website
- How to Break Into the Luxury Real Estate Market
- How To Transition Into A Career in Real Estate
- My Real Estate SEO Strategy
- Real Estate Marketing Unicorn
- Best Way To Setup Google Adwords
- How To Attract High End Real Estate Clients
Would you like to learn more digital marketing, SEO, search engine marketing for real estate, and how I use this method to close high-end buyers and sellers? Request to join my new Facebook Group Luxury Real Estate Sales – Breaking Into The High End
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