By far, central to every successful real estate agent’s business is the ability to generate their own leads. This sales reality should not be underestimated. Each Agent has very personal financial goals in mind for their real estate business. Successful Agents make considerable time investments to learn the dollar productive activities of real estate. Figuring out what tools to use from an array of tools (we call these the tactics) is critical. Agents should gravitate towards tactics that fit their business budget (everyone is different). Some Agents have real money to invest in various marketing, some don't and will need to boot-strap it. Either way you can make it.
The simple truth is that 20% of the Agents sell 80% of the real estate. Real Estate Agents are on the front line every day handling the dozens of closes required for every transaction. Typically there is no buffer between you the Agent and the public at large. Agents must be able to absorb the daily rejections while continuing to lead generate, plus the inevitable transaction conflicts that occur in every real estate deal. Before I hire any Agent, I ask a simple question, "Can you take the punch?" The "punch" euphemism refers to rejection. Most Agents are not prepared for this. Remember if you have a 300 batting average, you make an out 2 times for each hit. Real Estate is just like that!
The key is to focus on the dollar productive work, and not get bogged in the day to day "fires" that inevitable arrive everyday. It takes a decision to join that group of top producers (the top 10%) and work everyday until you get there. Real Estate is a business where you'll make exactly what you're worth. Make a commitment today to be top producer. Here's the good news, all those agents in the top 10% of producers, they all started at the back of the line. If they could make it, so can you!
The amount of Agent income is directly attributable to the amount of leads an Agent can generate. The more leads generated – the more business opportunities — more business conversations — more qualified buyers and sellers to work with — more face to face interactions — more closes. It seems simple, but it takes planning and discipline — especially regarding time management. New Agents often grossly underestimate the number of daily leads required to achieve a specific income goal.
You should ride the horse in the direction you're going. What I mean is work to your strengths in the beginning. Many Agents who I have encountered think that they need to know everything about a particular subject or lead generation method before launching to the public. It's the dreaded "paralysis of analysis". You do not need a "perfect plan", just a good plan, and get started on it right away. If you're strong with social media, go that route first. If you have the gift of gab, meet as many of your family and friends face to face (we call this your warm market). If you're quick on your feet, working Expired and FSBO listings can yield big returns. A great mentor/coach/Broker will help you get there faster.
In the beginning, don't try everything — go in your natural direction, over time you'll add and subtract the lead generators that provide the best return for you. It is my opinion that new Agents should allocate 80% of their time prospecting and generating leads. As your business grows, this time can be adjusted as your referral base grows. Remember there is no perfect plan. The key is to make a plan and make lead generation a habit — a daily habit for the rest of your real estate career!
What's your real estate recipe? In the beginning of your career the reality is that you have no real estate credibility. This is why your warm market (family and friends) is so crucial to getting out of the gate. Unfortunately many agents have trouble generating income in the first 6 months. Real estate does not provide a safety net. If you're tenacious enough to sign a deal in the first month it still on average takes 45 days to close it. That's 2.5 months before getting any income! (But you have bills to pay!) Many Agents do not account for the "slow start" and the lag time for closing. This is the silent Agent killer derailing otherwise promising of starts.
Here is a logical and typical order lead generation tactics of a new Agent with moderate financial means, blend these to you strengths:
Your Warm Market: This is the most under-utilized lead generator in most Agents (new and experienced) tool box. Why is this? It's simple, it's the fear of rejection. We are all human. Salespeople always want to make a good impression and they want to be viewed as knowledgeable, if not the expert. New Agents perceive the lack of requisite knowledge and experience as a reason not to not reach out causing procrastination. This fear prevents some from breaking out of their comfort zone. The lack of confidence is internal to the individual. The reality is that your family, friends and familiar vendors want you to succeed and want to help you. All you need to do is ask for their help! Your warm market knows that you do not know every detail and they don't care! Your inexperience is already baked in... the truth is (if you're likable) the people closest to you are going to react to you "emotionally"... they are typically willing to take the leap with you... All you need to do is ask!
Most sales decisions are made emotionally, not logically.
Expireds and FSBO's: Highly skilled Agents can generate enough high quality leads from Expired and FSBO listings to make a tremendous amount of money. Very few Agents however have the discipline to set aside the daily time required to make this type of lead generation profitable. This is a low cost method of generating leads. It's repetitious and requires a strong gut. When you're calling on Expired and FSBO's (for sale by owner), this group of Seller is already presupposed to certain attitudes towards Real Estate Agents. Expired sellers already had a prior negative experience with an Agent who could not sell their home (what's going make you different?) FSBO Sellers are typically adverse to using Agents to avoid paying the real estate commission.
Agents must be strong in their ability to counter typical objections to set an appointment on the spot (during the call). Agents must have an infrastructure at the ready to get the daily, new arrivals of Expired and FSBO Sellers. Locating Expired Sellers is quite easy from the MLS. The tougher part is getting their accurate contact information There are several programs available to Agents to reverse directory the Seller for their most current phone numbers and emails. Follow-up is key, certainly you are not going to speak with all sellers the first time (wrong numbers and no answer) are common. There are many outlets such as Zillow where agents can locate FSBO's. The process of lead generate, contact, follow-up, present, qualify, and close repeats itself over and over again. A great database and follow-up system are no brainers success in all lead generation.
Facebook: Entry into the electronic social media via Facebook is generally easy and more cost effective than other electronic methods. Agents will need a Facebook Business Page, your personal page will not suffice. In order to properly utilize Facebook, Agents will need a website. The website is place where all your advertised properties will originate.
Most Agents rely on Facebook messaging when responding to your post or paid advertisement. This is not the best method to capture leads. Facebook and the Agents website must work hand in hand... the Facebook ad generates the lead and your website receives the lead. The secret sauce is what happens next, you'll have to contact us directly for that! There is an expense to adverting on Facebook.
An investment in a website and all the components attached is a primary "must have" item to be effective with Facebook. The other routine cost is for posting the advertisement. Aside from the initial heavy lifting to get started... Facebook its a fun and potentially profitable way to market (depending on how well you follow-up)!
Zillow and Realtor.com: These lead sources are more costly per lead. The advantage is that you do not need your own website to capture the lead. Essentially you're using Zillow's and Realtor.com's websites. The disadvantage is that you're using Zillow and Realtor.com's website! What you are doing when advertising on these sites is buying zip codes in the hopes that the customer chooses you among other competitors in the zip code. Most of the time the customer is choosing you by luck! (not the best way to select an agent). If you are the lucky one, and get selected, you'll find that each system has its own idiosyncrasies.
The lead flow is much smaller with these generators, but the conversion rates are higher. In the end, you're buying back you own leads by abdicating your lead generation to Zillow and Realtor.com. A better bet bet is to propel your brand through your own website and drive your traffic to your website through the social media platforms.
Google Adwords: Also known as Pay Per Click (PPC). This platform is the most time consuming to set up and the most expensive to run. Typically there's a much longer incubation period from generated lead to closed sale. A great follow-up system is a must! The prerequisite for Google Adwords is an Agent website and the "know-how" to build out your marketing campaign(s).
The learning curve for Adwords is steep. To successfully build out these Google systems Agents must allocate large blocks of time to learn how to do it and later, the time to build the campaign. An option of course is to hire it out. I can tell you these 3rd party Adword designers do not come cheap! Google Adwords should be for experienced Agents that are making real money and have the support staff to do proper follow-up and close.
Open Houses: I'm not the biggest fan of open houses, but done well they can generate leads. Open houses are a very low cost lead generator (you just need to invest time, lots of time!) Open houses can make sense where the demographics make sense — well traveled streets where there a large density of homes are the best candidates. Remote areas are a much tougher draw. Most top producers do not have the time to do open houses, but they do have what the Rookies don't, the listings!
It can be a productive partnership between an experienced Agent to allow a Rookie to "sit" the open house. It satisfies the demand of some Sellers to have an open house while giving the new Agent the opportunity to generate leads. Win-Win. A good open house takes a ton of preparation (advertising, signage, food, obtaining visitor contact information, follow-up, pre-qualification, and close).
Other methods: (cold calling and door knocking). Nothing wrong with any of these. These old-school methods can work, but they're not for the faint of heart. Both are self explanatory. Cold calling requires a phone list, the quality of these paid lists are often suspect. A good call call ratio would 1 closed sale for every 100 contacts made (contact means talking to an actual person, not just leaving a voicemail).
I door knocked early in my career and was quite successful. When door knocking, you never know what you're going to run into. There's a lot of nice people, but there's also a lot of irritable people!... Also, be prepared for the vicious neighborhood junkyard dog... I had to outrun several of these sweet creatures!
Be armed for all types of objections. If you have the ability to cold call or door knock, its likely you'll make a lot of money in real estate. There's absolutely no substitute to getting out in the field, meeting the home owners, and handing every objection possible. You'll find when you're out prospecting, meeting the public, you'll run into all kinds of buying and selling opportunities.
At JWR, we are always available to help our Agents. Ask our Communication Coordinators, they are professional lead qualifiers (They have qualified thousands of leads)! Here at Joe Wiessner Realty, we love-love-love to assist our Agents in shaping their lead generation actions. We will help, really help! Here's to a great new beginning.