Real Estate Leads
EVERYTHING REAL ESTATE AGENTS NEED TO KNOW ABOUT LEADS
Online & Traditional Leads and Your CRM
How to Categorize Real Estate Leads
Leads, leads, leads.
Every agent, well actually everyone in sales, should want more leads. That’s because the more opportunities you work with, chances are the more successful you will be. And for Real Estate agents, more success means more commission checks which I think we can all agree is a good thing.
So what’s a lead and where and how do you get them?
Think of a lead as some information that leads to a sale. In Real Estate we often get online leads (which is mostly what this post is about) but also get leads the old fashioned way by first communicating with someone in person, on the phone, via text or email. This could be through your sphere of influence, a referral, meeting someone at an Open House, door knocking, or cold calling. Or maybe people just call you because you are an influencer or advertise extensively.
INTERNET REAL ESTATE LEADS
Online leads are leads that we get when someone registers on a website, fills out an online form, requests more information, etc. Sometimes this happens on a website we control directly or our Brokerage website. Other times the lead may come through sources who provide leads for a split of the commission. Let’s consider the latter to be indirect internet leads and the former to be direct online leads. or put another way, if you are paying a referral fee (in addition to your Brokerage split, that’s an indirect lead. If your only costs are those you incur (plus your split), that’s a direct online lead.
CONVERSION RATES
If you really crush it with internet leads, you might have a conversion rate of around 3%. Most agents are closer to 1% and some fall in the 2% range. I’ve known a few superstars who get closer to a 5% close rate.
What this means is that even if you are great at online leads, out of every 100 you get, on average maybe 2-3 will turn into sales. That means you are dealing with a lot of prospects who may never transact with you - or anyone else (even though I can say that the correlation between people who provide real info and those who buy or sell is very high). So determining what to do when you get these leads is really important.
Let’s look at a good way to categorize internet leads you may be receiving starting with the least useful and going up the food chain to the best ones.
Let’s take a look at some ways to categorize the internet leads you get and best practices in following up.
CATEGORIES OF REAL ESTATE LEADS
Tag these in your CRM
TRASH: These are registrations with no valid contact info. Bad phone number or emails. Before you decide a lead is trash, check out social media. If you can DM them with something like “I think you registered on my website but the contact info was wrong. Are you interested in buying (selling)…..” If not response then yeah - trash. You might ask why are you even tracking them? If you are paying for leads, best to know how many junk leads you are getting.
ARCHIVE: If you have valid contact info, nothing is happening in the near term, but there is an opportunity in the future, consider these to be lower priority archived leads. You might drip email them, text or call them once a month just to stay in touch.
Best to have had some sort of interaction with these leads before they are archived. A conversation might go something like, “I see you visited my website and looked at homes for sale. Are you in the market to buy?”. If the lead responds that they are moving to the area, thinking of downsizing whatever but not until next year, that’s who you archive.
I did not pick “next year” arbitrarily. That’s because leads inside of a year are handled differently as noted below.
WATCHERS: These are those Buyers and Sellers who are “watching the market” in anticipation of doing something maybe 6 months from when they register. A lot of leads we get fall into this category.
There’s a lot of money to be made effectively working with these prospects and moving them through the sales cycle. The challenge is to stay in touch but to not be too sales-y or intrusive. That’s an entire blog post in and of itself.
NURTURE: These leads have self defined as being in the 3-6 month time frame. You might have a relationship with them and they may or may not have committed to using you are their agent. Typically there is some life milestone that is affecting their time frame. They may be waiting for a bonus or to retire. They may have kids moving out of their home or be expecting new family members. You want to stay very close to these until you have a signed agreement.
HOT LEADS: Yes, these are the ones we all want! They are ready to go. If they are Buyers, they have their pre-approvals done, preferably but not always with a lender you trust. If they are sellers they are ready to or already preparing their home for sale.
A lot of coaches will tell you to include everyone in a 90 day timeframe as a “hot” lead. I’ve found that’s not quite good enough.
I do consider everyone in a 90 day timeframe to be “hot” but within hot leads I also look at 7-14-21 day leads. Here’s what I mean.
If a prospect is ready to write an offer if you show them a listing that checks all their boxes in the next week, they are a 7 day lead.
Similarly for home owners, will they accept an offer that meets their criteria in the next 7 days whether their home is listed or not. Or are they ready to sign a listing agreement.
Likewise for 14 and 21 day hot leads.
Often when I am explaining this to agents and say something like “I focus the most on 7 day leads” the intent is misunderstood. I am not saying I drop them after 7 days. just that those are (obviously) where I put most of my efforts.
A major mistake most agents make is how they work with leads through the life cycle. So let’s discuss….
THE LIFE CYCLE OF REAL ESTATE LEADS
Leads to Prospects to Clients
Real Estate Can Be A Long Sales Cycle
QUALIFY: Someone just registered on your website or filled out a sign in form at your open house. Congratulations. No what?
You have to qualify them.
You will often hear about “speed to lead” and that is relevant in many situations, particularly if you are not getting “exclusive” leads. (And I am skeptical as to how exclusive any of those really are.)
Ostensibly, an exclusive lead would be someone who has registered on your website or requested specific information from you. I am making this distinction from lead services that send the same lead to multiple agents.
If you have a “speed to lead” model, which many of the large teams utilize, you have to call that prospect immediately whether it is 5 AM or 11 PM. The logic is the prospect is on your website, has just registered and focused on real estate.
I’ve also found that a lot of prospects can be put off if you contact them too quickly because they are just browsing and looking for info online. That’s why it is so important to have auto responders. Many agents also use AI chat which can give you a good idea of who to contact and when. Someone who asked a question via chat and then registered is probably worth contacting immediately.
Don’t give up if you can’t make contact quickly. It may take 5-10 attempts using different media - phone, text, email. Initially YOU (or your assistant) should try to make the contact directly and not use automated texts or DMs. Just keep it real.
Here’s what you might say following the IFQ format: Introduction, Statement of Fact, Question.
“Hi, this is (your name from your brokerage).
You registered on (name of website) to (whatever it is they were doing).
I’m calling (emailing, texting) to find out if the information you got was helpful.
You should have a number of questions that you can use. If they checked a home value you might ask if the value was in line with their expectation. If they looked for homes, you might ask if they are happy with the current inventory level, or how they feel about prices. The best questions to ask here are entirely open ended. (For more on the IFQ structure, read this article about scripts.)
Once you develop your own protocol for handling new leads, make sure you follow your system the same way all the time.
Qualifying is the first step and you simply can’t skip it. It is an important piece of…
MOVING LEADS TO PROSPECTS
I consider a lead to be someone who has expressed an interest and that you may know something about like they want to buy or sell in a certain area, price range and time frame.
The lead becomes a prospect when they move to becoming “likely” to use your services. How does that happen you ask?
Once the lead is interacting with you on a regular basis and exchanging information, they are now a prospect and someone you may actually do business with in the future.
By that I mean that a potential Buyer registers on your web site, or signs in at your Open House and you QUALIFY them, and send them listings or show them properties in person, they move from being a lead to a prospect. For Sellers that may be that they registered for market reports or signed up for updated AVMs on your site (at which point they were leads) and then you visited their home and gave them some ideas for preparing to sell. Now they are a prospect.
At a certain point you hopefully pass another milestone with them and…..
YOU HAVE A CLIENT
If we’re talking about Buyers, a client is someone who:
Has signed a Buyer - Broker agreement with you, or
Has had an offer you wrote accepted and you have opened escrow.
You can also have past clients who may do business with you in the future. Or not. Keeping your past clients in your sphere is a topic for another blog post. Just make sure that your closed sales and clients stay in your database and CRM.
“All leads are internet leads.”
Well, not exactly - but sort of. Many agents are still getting leads….
THE OLD FASHIONED WAY
Old School and Traditional Real Estate Leads
Open HOUSES, REFERRALS, SPHERE OF INFLUENCE, Door Knocking, etc
Yes, you can still get leads the old fashioned way but to convert them into paychecks, you really want to follow the same protocols as with the leads that have registered on your website or capture page with one difference: get them to sign up.
You might be asking why I say that all leads are internet leads. That’s because EVERYONE you meet, whether in the real or digital world will look you up online.
That’s why crafting and maintaining your online presence is so critical to your success. I covered online reputation in this post.