Real Estate Leads (How To Get Real Estate Leads)
Real Estate Leads
The 2018 national association of realtors® profile of homebuyers and sellers digital report shows 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.
Real Estate Lead Generation
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. Take a look at my article an indepth Sierra Interactive Review and Analysis.
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.
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. These portals have also diluted the leads to be able to sell to more agents. You used to be able to get enough leads back in 2010-2013 be successful with $2,000 a month and now it's $4,000+
Overall I highly disliked all three and invested a fair amount of money to have a good read on the results.
How To Get Real Estate Leads
I have proven with over 9 years of experience that you can generate your own real estate leads with your own website using SEO and Google advertising. The second half of this article will show you how you can use online leads to break into the high end real estate market in your area.
Real Estate Lead Conversion
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?
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.
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 is to 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.
How To Break Into The Luxury Real Estate Market
Anyone can transform their business to work with high-net-worth individuals (HNWI), typically defined as someone who has at least $1 million in liquid financial assets.
Back in Minneapolis-St. Paul, I was an affordable housing lender, originating mortgages in emerging markets for individuals with low to moderate income levels. After relocating to San Diego, I had no personal network. However, with a strong digital-marketing strategy I became a top producer in the luxury real estate market.
Over the past five years, (this article was written in 2015, numbers are very different now) I have grossed more than $2 million — thanks to 100% online lead generation. These sales have included significant and record-breaking sales in the luxury markets of Del Mar, La Jolla, Laguna Beach and Rancho Santa Fe.
An Emerging-Markets Specialist to a Luxury Real Estate Agent
In early 2009, I was the No. 1 lender with Lake Area Mortgage for the Minnesota Housing Finance Agency. There, I originated loans in emerging markets for low- to moderate-income buyers. Essentially, a couple earning $12 an hour each could purchase a $120,000 single-family home and make a down payment of $500.
Although helping hard-working families buy their first home was fulfilling, I was frustrated and bored originating 25 to 35 loans a month.
In the midst of the humdrum, there was finally one specific event that reassured me I needed to get out.
Here’s what happened.
In order to qualify for the Minnesota state down payment programs, the buyer has to underwrite at least $500 directly from their payroll deposits.
In most cases, this involved getting a bank printout signed and stamped the day payroll hit, because by the time the actual bank statement was due, the funds were no longer there. This required coaching the buyer on exactly what was required.
In this particular instance, the buyer’s fax arrived directly from the bank, signed and stamped by the banker the day before our scheduled closing with a balance of $488 — $12 short. I then had to call the buyer’s and seller’s agents to explain there’d be a delay in closing until the buyer’s next paycheck.
The reason for that $12 discrepancy was a charge to Little Caesars Pizza the evening prior.
Luckily, the buyer was paid weekly. But still, this was the beginning of the end for me as an emerging-markets specialist.
Why Luxury Real Estate?
Working with high-net-worth individuals (HNWI) or ultra-high-net-worth individuals (UHNWI) requires the highest level of service and sales expertise.
I’ve talked to many agents across the country in the past six years, and I recognize some communities simply don’t have multi-million dollar homes. But think of it this way: There’s always a gated neighborhood, a street, a lake or a golf course where the homes are more high end than the rest.
I can remember when I was originating $150,000 home loans and was envious of those originating $350,000 loans — double my commission rate. At that time, I had not yet figured out how to break through the glass ceiling.
Now, I often get asked, “Doesn’t branding yourself as a luxury real estate agent turn off possible middle-tier price points?”
I believe you can always sell down, but it’s almost impossible to sell up.
As an example, compare Neiman Marcus to JCPenney. You won’t find many Neiman Marcus shoppers venturing into JCPenney. However, shopping up is possible, if, say, someone is looking for a special gift.
You’ll also notice Neiman Marcus has a more upscale store design, the store associates are dressed better, and the overall service is more personal. The standards are higher.
The key here is to learn the luxury lifestyle and what’s considered quality service. By studying these skills, you can apply them to all aspects of your business — even if it’s not exclusively luxury.
That’s why we sell both luxury homes and homes with middle-tier price points.
This has become important to our business model as the luxury home is often considered a discretionary purchase. Oftentimes luxury homes in San Diego serve as a second residence or as an investment. Because relocating to San Diego is not necessary, we’ve lost clients to other warm-weather markets, including Florida, Hawaii, Arizona and other parts of California.
5 Tips To Help You Break Into Luxury Real Estate
If you’re looking to tap into the luxury real estate market like I did, here are a few tips that’ll help you get on the right track.
1. Learn Luxury
It’s important to learn luxury brands beyond the obvious mainstream travel destinations and dining options and to elevate the level of your perspective.
One of the best ways to learn luxury is to follow influencers on Twitter and Instagram.
I purposely mute Twitter followers who don’t teach me new things or are a brain drain. I want my feed filled with news, luxury purveyors, influencers and technology. I follow high-end home design, architects, interior decorators and builders.
If you want to dig your nose in some books, I recommend Dr. Stanley Thomas’ books: “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy,” “Selling to the Affluent,” “Marketing to the Affluent” and “Networking With the Affluent and Their Advisors.” These books will begin to reshape your thinking and understand the mindset of a HNWI. Additionally, I recommend Selling Luxury Homes by real estate agent Jack Cotton.
I also got subscription passes on iTunes to prior seasons of Bravo’s “Million Dollar Listing.” If you ignore the made-for-TV drama and instead watch the different scenarios between potential buyers and the agents, you might feel more prepared for your first interactions.
Overall, learning more about these topics will give you conversation starters for future prospects.
2. Consider Your Online and Offline Image
Online: Next, here are a few tips on how to build your online image.
Know that high-end clients almost always check you out online prior to the first meeting. Be prepared with consistency, and optimize your profiles across all social media.
An easy way to ensure consistency is to use the same professional headshot.
Your photo is your No. 1 marketing message, and many agents don’t take it seriously. Their photos are outdated, out of focus and not presenting them at their best. Spend the extra couple of hundred dollars on a top headshot photographer. Make sure your outfit is tailored, and even use small clips on your sleeves and suit jacket if there’s extra bulk.
I’m also very cautious regarding whom I’m connected to on social media. Can you imagine losing a client because someone you are “Facebook” friends with posts inappropriate things? Then your prospect judges you adversely based on that?
So now you might be wondering: How do your brand yourself if you’ve never sold a “nice” home? Prior to selling my first luxury home, my about me section read simply, “I specialize in selling luxury homes.” Then, enhance your luxury image with earned credentials, certifications and affiliations, which can also help boost your self-confidence.
Additionally, be sure to maintain your website and to write articles. You can also try to get published by sending out press releases. Make sure that your press release is of interest to your intended audience — and not about you. If you write about how awesome you are, your article will die, and no one will care.
I wrote an article “Skyrocketing of Ultra-Luxury Home Sales in San Diego for 2013,” which led to a quote in Unique Homes Magazine and in our local San Diego Premier. I’ve also had two local spots on San Diego Fox 5, thanks to evening anchor Jenn Karlman noticing an article I wrote.
I found the following paid real estate affiliations, trainings and designations helpful when I was starting out:
- The Institute For Luxury Home Marketing
- Luxury Home Council
- NAR CIPS Certified International Property Specialist
- Jack Cotton’s Luxury Agent Academy
In terms of wardrobe, you’ll want to first splurge for the most expensive pair of shoes and belt you can afford. You can build everything else around that. Sometimes you can find used items in excellent conditions at luxury consignment shops.
Your car is also important, depending on your market. If you can’t afford to buy a new car at first, know where to get a rental car for when you have a VIP client.
3. Break Into Digital Marketing
To break into the luxury San Diego real estate market with no personal network, my plan was to take advantage of digital marketing.
I’m also a very strong believer in intentional marketing dollars versus vanity marketing dollars. Intentional marketing dollars will bring in a direct response — humans with email addresses and phone numbers.
Vanity marketing dollars, on the other hand, might make you famous in your town. However, calculating a rate of return at the launch of a real estate business is more difficult. Examples of vanity marketing are bus benches, grocery carts, billboards and “Call Me I’m Awesome” magazine ads.
4. Google Page One Rankings
One large misconception real estate agents have regarding websites is that if you buy a site that’s already nicely designed, you’re good to go.
In reality, organic traffic is earned, and it takes hundreds of hours of work.
There are leading real estate website designers selling websites for $5,000 to $20,000. Sure, they are gorgeous, but with no organic footprint, their value is truly insignificant.
It’s more advisable to build a basic template site for $1,000 to $2,000 and invest the rest of your budget in professional copywriting, videos and photography. After your organic traffic begins to take hold and after you close your first sale, upgrade the design aesthetics.
Start by building out pages for long-tail lifestyle keywords. These are three- to four- word keywords that are specific to what you’re selling.
5. Learn Emotional Intelligence
There is a two-step process to successfully closing high-profile real estate transactions.
The first step is procuring the lead or prospect. Many agents have these prospects in their sales funnels thanks to online lead generation, but they fail to make it to the finish line.
The second step involves lead conversion — but not in the traditional sense. An agent could follow all the right steps through the lead-nurturing process, have their scripts memorized to perfection, but still fail.
Colleen Stanley’s book, Emotional Intelligence for Sales Success speaks about the Emotional Intelligence Quotient (EQ) relating to sales.
EQ is the ability to identify and control your own emotions and other’s emotions. I think high EQ is the predominant differential for sales agents that sell consistently in the high end. In managing a high-profile sale, you have two super egos on either side of the table that both want to win — and are used to winning. And depending on the other party’s broker you’re negotiating with, you may have another adversarial party.
More often than not, the seller states emphatically that they don’t have to sell. This essentially means, “I’m not motivated by your quick cash, quick close offer for less money.” You have to navigate home inspections where the buyer expects every small deficiency repaired or credited with a substantial repair credit.
Unemotional intelligent real estate agents negotiate with their real estate commissions, have difficulty accepting delayed gratification and can’t adapt quickly to the prospect.
How These Tips Lead Me to Significant Sales
In the fall of 2012, I remember touring 2984 Sandy Lane in Del Mar, listed at $18.995 million on the Weekly Caravan.
I can remember sitting on the oceanfront deck thinking to myself, “Wouldn’t it be amazing if I could sell something like this?”
In November 2014, that dream became a reality when I sold the most expensive on-market home in San Diego County for $15.995 million.
Around 140,900 adults worldwide can be classed as UHNW, with personal wealth of more than $50 million, according to Credit Suisse Group AG’s Global Wealth Report. This puts into perspective the number of opportunities you have to meet and transact with an UHNWI through an online marketing plan.
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