If “location, location, location” is the life’s blood of the real estate industry, then lead generation is the bone marrow. Its importance cannot be overstated. It’s simple. If you don’t generate real estate leads, then you will fail. It is also important to note that relying on buying leads from sites like Zillow will quickly eat up any profits you generate. At up to $60 per lead, you will wind up in the poor house before securing your first commission.
As an example, consider that the average return on good real estate leads is about 4 percent. That means that you will get four sales per 100 leads. Your typical commission on a home is 3 percent after splitting with buyer’s agent. So, let’s say you sell four homes for an average price of $150,000. That’s a total of $600,000. You and the listing company get 3 percent of that, which is $20,000. The company will take part of that for overhead, and you will likely pay 30 percent of what’s left for you in taxes. Then, you might have your own overhead to pay. Those 100 leads cost you $6,000. You can easily see how it will become a state of diminishing returns very quickly.
You might think, “Well, I will sell more than four homes a year, so I will be all right!” The sad fact of the matter is that 20 percent of all available real estate agents make 80 percent of the sales, so many agents, particularly rookies, will only sell between four and six homes a year.
What does all this mean? It means you have to generate your own leads rather than buying them from other companies. Is it hard, sometimes frustrating work? Yes, it is. But, it is absolutely necessary for the development of a thriving real estate business.
SEO and Real Estate Lead Generation
Because there is no John Williamson to hand you promising leads, unless you do your homework, you’ll wind up like Shelley Levene instead of Ricky Roma. SEO is the key to generating the best real estate leads.
What is Realtor SEO?
SEO stands for search engine optimization. It’s a method of using well-researched keywords, strategically placed in documents on the internet, to attract the attention of people interested in the topic for which you are attempting to generate web traffic. In our case, that means people interested in real estate.
What Is a Lead?
Leads are simply people who might, or might not, buy or sell a piece of property over which you have authority. Because they will have contacted you for information, to place an offer, or “just to think about it,” they are no longer considered “cold prospects.” Calling leads is much more profitable than cold calling.
Lead Generation Basics
Real estate lead generation is not about browbeating leads, getting in their collective faces, or hard selling them all the time. It is best for you to take lead generation slowly as a long-term project. The idea is to make contact with each lead, talk to that person, gradually get to know that person, and develop a long-term business relationship with that person.
Developing such leads is as important as it is because even if they don’t actually buy or sell a home through you, they might, if you’ve done your job properly, refer people who do buy from or sell to you. Generating and tending leads is like raising orchids. It’s painstaking and can result in disaster at the first wrong move. But, done right, it yields incredibly beautiful blooms. The referrals you get are the seeds of new orchids.
Cultivating new leads means calling to check up on them after a while. See if their needs are being met. You can invite them out for coffee to talk about it. It’d also be a good idea to remember their spouses’ and kids’ names, their birthdays, their anniversaries, and other information about them. If you have to keep a “virtual Rolodex” with information about each lead, do it. It adds a personal touch to all of your business interactions.
You have to know where to look to find leads too. It really isn’t as difficult as it seems. They are, after all, all around us. You can find them on social media, through website forms, and checking real-estate listing websites.
How SEO Connects
People who look up real estate transactions online usually enter the same keywords into Google as others. These might include “homes for sale,” “cheap homes for sale,” or even “top-rated real estate agents.” A simple way to find out what people are looking for is to go to Google and enter “real estate deals in [insert your city name here].” Let’s say you live in Eau Claire, Wisconsin. Once you enter “real estate deals in Eau Claire, Wisconsin,” scroll to the bottom of the page. That’s where the related searches are listed. A couple in this case include “homes for sale Eau Claire WI,” “Eau Claire homes for sale by owner,” and “condos for sale in Eau Claire WI.” These are all examples of keywords to include in your website copy.
Of course, real estate SEO is more complex than that. The most important club in the SEO bag is the concept of backlinks. Backlinks are links from other, high-ranking webpages that connect back to your website. The emphasis here is on “high-ranking.” Google and other leading search engines will give your website more credence if there is a high percentage of high-ranking websites linked back to you.
That doesn’t mean that you have to have dozens of links back to your website. In fact, having four or five top performers linking back to you will be far more impressive than a whack of small fry doing the same thing. By being selective in the backlinking process, you also cut down on the possibility of spam. Spam will show up on Google’s algorithms, too, and it is a veritable “website killer.” Be extra cautious about links you accept. Do your research into the real estate companies who want to backlink to you.
As you rise in prominence online, others might contact you to backlink to them. This is a prime and fertile ground for you to generate and cultivate new leads. Do the same kind of research on the real estate companies that want you to link back to them. Linking to the wrong company can be as killing as letting spam into yours.
A word of caution: Steer clear of “black hat SEO.” That’s the practice of exploiting the technical aspects of the internet to drive traffic rather than relying on human interaction. Usually, people buy links full of stuffed keywords regarding real estate, and the links go to pages full of nonsense or unrelated content.
It’s an even bigger website killer than spam. It’s not illegal, but it will get you banned from Google or other search engines, which will be a death knell for your web presence and, by extension, your real estate business. There is no “easy way” when it comes to SEO. Sure, the processes are easy enough, but they take diligence, savvy, and creativity to bring to fruition, and that takes time.
Real Estate Google Adwords
Successful real estate marketing companies leverage the power of Google Adwords to their best advantage. You spend real money to get the keywords you want here, but it’s on the up-and-up and not like black hat SEO. You bid on these keywords in an auction, and the highest bidder gets access to the particular keyword upon which the bidder bid.
For example, let’s say a person entered “homes for sale.” Before this moment, several real estate marketing companies will have entered their bids for the term “homes for sale.” If Google sees that search term, or terms that are closely associated with it, then it will trigger an auction.
Each entrant into an auction has two attributes that Google recognizes: maximum bid and quality score. Your quality score is the score Google assigns to your website. Google multiples your quality score by the amount you bid to generate your ad rank. You can readily see that, unless you want to spend large amounts of money, you will have to have a high-quality website to bid effectively.
Let’s look at an example. Suppose there are three companies looking to do real estate lead generation. Call them A, B, and C. A’s website is poor and only has a quality score of two. B’s website is stellar and has a quality score of eight. C’s website is middle-of-the-road with a quality score of five. If B bids $20, B’s score will be 160. To equal B’s score, A will have to bid $80, and C will have to bid $32. Let’s say A and C don’t bid that much, and B wins the auction.
Further, let’s say that A bid $40 and achieved a score of 80 and that C bid $30 and achieved a score of 150. Google uses these statistics to determine how much you pay. Remember, your bid is you maximum bid. If you win the auction, you will almost always pay less than your maximum bid. Google then applies the following equation:
Your final price = (the ad rank of the person just below you/your quality score) + $0.01. So, in our example, B’s price would be (150/8) + $0.01 = $18.76 instead of the maximum bid B made of $20. By having a great website, B saved $1.24 on that one impression. That’s $1,240 saved on every thousand auctions, and each time B wins, B’s website is listed very highly on the Google results the searcher looking for “homes for sale” sees.
By contrast, a Super Bowl ad, which lasts only for 30 seconds and isn’t specifically targeted to people who are interested in your product, would set you back $5.2 million. That’s a far cry from spending 20 grand to reach 1,000 people who have already shown interest in buying or selling a home with you as the agent.
Different Adwords Options and Text Techniques
You can configure your Adwords to boost your sales, leads, or website traffic. Enterprising and wise real estate professionals do a combination of all three. You may have all the real esate leads you need right now, but boosting your website traffic might yield a fresh crop of leads later down the road.
When creating your ads through Google Adwords, you need to create dynamite text that speaks directly to the people you want to reach. Getting your ad in the right place is great, but how will it fare if the text is all wrong? There are some general rules of thumb.
1. Make Them Feel.
By appealing to their emotions, you create a visceral response. Most people act on emotion instead of logic, so focusing on that is a good way to attract them. For example, speak to the homey characteristics of the possible properties that interest your prospective home buyers. If you’ve done the right kind of information collecting, you already know what those characteristics are, and they might be something like “great place to raise a family,” “spacious family room for game night,” or similar. When you design your website copy, ask yourself this question: Why would someone search for keywords that apply to these particular characteristics? Build your copy around that reason. If it doesn’t match, rewrite the copy. It will be time well-spent.
The second question you should ask yourself is, “What do these people think they deserve from me?” When you compose the copy, be sure to make potential customers feel as if your services and the homes to which you provide them access are both something they deserve. That kind of emotional connection is at the heart of almost all successful business relationships.
2. Logic Has a Place Too.
Even though most purchases are made through emotion, some people approach their buying and selling logically. Many of those rely on emotions too. Balancing the two is tricky. As you’re appealing to their collective guts, you also have to show that you’re on the ball. That involves anticipating their real estate questions, wants, and needs and inserting text that answers those items without the leads having to ask them or declare them.
Secondarily, try to anticipate the reasons why your leads wouldn’t want to sell or buy homes through you. Provide text on your website that addresses those objections before the potential customers raise them. One of their most popular questions is, inevitably, “How much?” They could mean the cost of the home they wish to buy, how much their home will fetch, and what your fee and commissions are. Include statistics regarding both the real estate trends in the area and your ability to maximize either their purchasing power or sale price, whichever is applicable.
3. Take Advantage of Expanded Text Ads.
Once you have your website running on all cylinders, you want people to notice your well-placed ads and click through to your website. When Google eliminated the right-side text ads in searches, businesses could work with more space. That’s why you now get 45 more characters for your ads that appear in your leads’ Google searches.
An added advantage of this change is that the ads now appear the same on both desktop and mobile platforms. Sure, they’ll word wrap based on the size of the screen, but there won’t be two versions anymore. In all cases, they are more visible than the standard ads. Wordstream also notes that real estate agents who use these Expanded Ads close 12 percent more on mobile platforms than standard ads. That will mean a huge chunk of change in your pocket if you close five deals instead of four.
Social Media and Lead Generation
Social media aren’t the kings of lead generation the way they once were, but they are still valuable channels from which you can gather leads. The chief technique at play here is pay-per-click advertising, or PPC. PPC is sort of like the internet version of highway billboards. Instead of people searching things out, they instead see them as they surf the internet, interact with friends and family on Facebook, tweet, or any of the other methods of online communication.
The way it works is simple: You pay Facebook, Twitter, your email provider, or search engine every time a user clicks your ad to go to your website. The amount a business pays per click varies widely, depending on the industry. In real estate, clicks will usually cost from $1 to $4 per click. If you get lots of clicks, then you will have to have a fairly large PPC budget. With that many clicks, however, one good lead who buys a luxury home will offset your budget and then some.
Remember, your return on leads is usually 4 percent. If you get 1,000 clicks at $4 each, you spend $4,000. Let’s say you get 2 percent of those 1,000 people to come to you for a real estate transaction That’s 20 people. If 4 percent of them close on a home, that’s one of 20. If you sell that home for only $250,000, your 3 percent commission is $7,500. You just spent $4,000 to make $7,500. Assuming you pay 30 percent of that in taxes and overhead, you still clear $5,250, making your profit $1,250. That number goes up as the prices of the homes you help people buy and sell go up. So, PPC is a terrific tool for real estate agents.
On social media, by necessity, the ads will be short on text and long on images. By creating visually stunning ads that showcase your best properties, you increase the likelihood that a Facebook user looking for a real estate deal will click the ad. If the user likes it enough, that user might share it too. If that happens, even if you don’t generate a lead then, you might in the future because everyone on that user’s friend’s list will see the ad too.
There was a shampoo ad in the 1970s where the lady in the ad said, “I told two friends, and they told two friends, and so on, and so on …” This sharing on social media is the 21st-century equivalent. Real estate agents of the past would be very happy to have that kind of quick real estate marketing back in the day.
One of the added benefits of social media PPC is the “free lead.” Let’s say a Facebook user is happily surfing away and sees your ad. Further, let’s say the user doesn’t click the ad and, later in the day, remembers the gorgeous home that was featured as a photo in the ad. Even though that user didn’t click through right away, that user could go to Google later and enter your business name or “real estate agents of [your city].” The user will find you organically instead of reaching you by clicking. You gained that person’s interest even without a click and, basically, for free.
As your real estate business grows, so will your PPC campaign. Instead of paying per click, you might advance into “cost per mille,” which is “cost per 1,000 impressions.” You will have already developed a large traffic stream across many channels when you advance into this area.
Social Media Ad Tactics
Facebook provides you with a veritable smorgasbord of ways to classify people through interests, preferences, age groups, and “likes.” You can tailor your ads to fit these various demographics and be sure to be giving the right information about the right properties to the right group. The old advertising adage of, “You don’t pitch Geritol to teenagers,” applies here as well. If someone likes split-level ranch houses, don’t show that person Victorian homes.
To find out what you need to know, you should use the Audience Insight tool. You enter interests and various keywords and then press “enter.” The tool will parse these and will provide you with statistics regarding groups of people who are interested in the combination of keywords you entered. It will also sort by age group and gender. When you build your Facebook ads, ensure that they are shown to the demographics the tool recommends. When it comes to real estate data, you could enter terms like “low closing costs,” “favorable interest rates,” “luxury homes,” “good schools in the neighborhood,” and the like.
The Custom Audience Editor lets you target people who have had some form of contact with your brand in the past. One such group is “people who have visited your website.” You can tailor content for these people specifically in an effort to entice them back to your website.
If you have collected leads’ email addresses or phone numbers through your information gathering, you can use the Customer File option as well. This lets you send relevant real estate content through Facebook and through email. It’s not spam because these customers have already indicated interest in buying or selling homes and might have already shown interest in you too.
One of the interesting facets of the Customer File tool is the Lifetime Value extension. With this neat feature, you can create a “lookalike” client. You input data from a group of your clients, such as whether or not they performed a real estate transaction, how much they spent, what you expect them to spend in the future, and demographics information.
You should include all lead and client types, even ones that were part of a negative experience for one reason or another, because the Facebook software will parse them all together to create the most realistic lookalike possible. Then, the Customer File tool scours Facebook to find people whose demographic information, location, and self-professed real estate interests align with the client properties of the lookalike.
Data Mining on Facebook to Find Potential Leads
One of the most powerful information-gathering tools on Facebook is the Facebook Pixel. You use the Pixel tool on Facebook to create a small snippet of code that you then install on your website. The Pixel is like a backlink to your Facebook ads and your Facebook business page. The Pixel places and follows cookies in the browsers of potential leads and clients and relays that information to you.
The Pixel will even track your potential clients across their devices to see how they interact with your website in multiple channels. Further, it stores that information for future reference, which allows you to contact the potential client at a later date. You can drill down quite far using the Pixel. For example, let’s say your customer checks out a house from a certain neighborhood on your website by clicking through a Facebook ad that showed a picture of that house. For whatever reason, that person decided not to act upon it.
Six months later, a very similar house in an equally good neighborhood comes up for sale. With the data the Pixel gathers, it can retarget that potential client by showing a photo of that new house. You don’t even have to tell it to do it. It just does it on its own. That client may be interested in buying a house now, so the Facebook Pixel acts like a miniature real estate marketing firm at your beck and call.
Nothing Is More Crucial Than Information
As you can see, generating leads is all about gleaning information about people and using that information to good effect. A successful lead generation campaign will use all of the tactics above to get that information, collate it, and act upon it. With only about 4 percent of leads panning out, the more leads you have, the more deals you will help your clients close. In stark terms of reality, more leads equals more cash in your pocket.
Building a Team
Although the thought of the “lone wolf” real estate agent against the world has a bit of charm, most successful agents build a team. Having such a team reduces the stress on each member because the whole team can work for each other’s benefit. If “Joe the Realtor” generates a bevy of good real estate leads for new agents and gives a few of them to each of his team members, the whole company will benefit.
The more the team generates quality leads and closes deals while providing world-class customer service to its clients, the more that those clients will refer future clients to the business. With the power of the internet at its disposal, the team can consist of real estate professionals from anywhere in the United States, which gives the business the chance to branch out into different markets.
Because team members must be dedicated to one another to succeed as a group, each member has a vested interest in seeing others, including newbies, succeed. Therefore, real estate teams are fantastic training grounds for developing skills and techniques and “learning the ropes.” When you are an experienced team leader, you become a mentor to your charges too. You can teach them not only the “tricks of the sales trade” but also the “tricks of the lead gathering trade.”
Remember the 80/20 trope? When you have a team of go-getters committed to each other’s success, that’s a lot of the “80 percent” that you are getting for your team. If you’re running a crackerjack team and still doing your own work, it’s not unheard of for you to be making seven figures consistently if you focus on both your real estate seller leads and your real estate buyer leads.
Being able to generate real estate leads at scale will enable you to build a real estate team or brokerage. This is the end goal, as you will be able to earn money passively. Working less and earning more is always the goal.
The Final Word
As you can see, lead generation has come a long way since the days of pounding the pavement knocking on doors. If your business has the scope, the entire United States is reachable through various online techniques and information gathering strategies. You have to be internet savvy to make best use of these techniques and strategies, so it would likely be a good idea for you to take a class in that subject or hire a real estate marketing agency.
Although the preceding are quite a few methods, there are still more to explore. Use your imagination and be creative. Good luck!