Online leads ain’t what hey used to be. During my recent trip down to the National Association of Realtors (NAR) conference, I attended a session on leads. It got me thinking about the many calls I have received over the last few years offering to participate, at an exorbitant cost, in a company’s lead generation system. They all claim to have the best traffic and referral sites in the city.
The truth is that leads are a fickle creature. I can say with accuracy that the strength of the leads that I have encountered over the years has varied from extraordinarily weak to weak. The truth is that some leads do pan out and are worth pursuing. It could be that my conversion technique is just not good enough. But if you look at the graph, there are currently over 12 leads than deals. That’s a lot of leads. While this is a US graph, I think it is fair to say that a similar graph shape exists in Canada.
So, if the numbers are true, then one could infer that a majority of people are going on to lead generating sites, filling out contact information but are not getting contacted by an agent. If they don’t get a reply they try another site…and so on and so on. The science behind lead traffic (and there is a science) is well documented. Here are some interesting facts compiled from a recent NAR survey;
Quick follow up is a must. You have a better chance of converting if you can respond within the first 30 minutes.
In order to convert a lead to a client takes 6 touch points. Consider that you only have a 10% to convert that lead to a client after one follow up. 2 follow ups increase your chances to 30%, 3 to 40%, 4 to 50%, 5 to 70% and 6 follow ups give you a 90% chance.
After that 6th follow up you will need another 46 interactions to get to a closing.
You are 164% more likely to qualify a lead between 8-9am and if you are more likely to succeed if that contact is made on a Wednesday or Thursday.
Finally, it is important to act fast and be efficient because 67% of buyers and 70% of sellers work with the first agent they connect with.
Of course keeping in touch with your clients is paramount to future success. Do you need proof that a great CRM tool will work for you? consider that within a year 70% of homeowners don’t remember who they worked with and only 12% of buyers or sellers will use an agent from a previous transaction. It is interesting to note however that if you keep in contact with past clients you are 85% more likely to get a referral or recommendation for futures services.
Statistics to live by. Enough said.
I had an interesting conversation with one of the agents in my office yesterday. He is a strong producing agent who is feeling rather frustrated with all the multiple offers going on. Since January he has been in ten such scenarios and lost all ten. If it weren’t for his listings I’m not sure I would be able to talk him off the ledge. Multiple offers seem to be the focus of a lot of discussions around the office (see today’s article in The Star on winning a bidding war, http://bit.ly/HBlh7b ) and while we often talk about Buyer fatigue, the new malady might just be Agent fatigue.
I might just have the answer for winning more offer presentations. It is so simple yet so genius. Sell your clients a FSBO property. Let’s face it, Agents stay away from FSBO’s. They’re not supposed to, but we all know they do. At our company we devote part of our training to dealing with private sellers because, while still a very small segment of the market, agents will come across them from time to time and need to know how to negotiate with a private seller. We should also recognize that, for the most part, FSBO’s aren’t flying off the shelf. Personally, I’ve passed the same three large round blue and green directional FSBO signs for the last 2 months. (Interesting how FSBO’s don’t need to adhere to city bylaws regarding open house signs isn’t it?). It reminded me of an interesting situation one of my agents had a few months ago. She had been working with a buyer for a few weeks and after several failed offers they found the perfect home for sale being offered privately. My agent talked to the sellers and managed to organize the showing with her clients. The house was for sale for $749,000 but her research showed that it was easily worth $850,000 and that under normal conditions (read; massive bidding wars) the house could reach into the $900k range. The sellers said they were trying to get a bidding war going. The instructions clearly stated that all offers were to go to the Seller’s lawyer. My agent’s clients were interested in the house so she called the lawyer to ask if there were any offers registered. His response was “yes, we have an offer on the table for $745,000”. Fabulous. Well it turned out perfectly for one buyer. Sadly it was not ours. That’s a story for another day. The point of this is to illustrate that it is not always in a Seller’s best interest to go it alone.
Let me state unequivocally that I am not against people selling homes themselves. There are lots of situations where involving a Realtor just doesn’t make sense. In a 2010 NAR survey of buyers and sellers, about half of the FSBO sales typically occur when the seller knows the buyer. Here are some other interesting points from the survey;
• Over 60% of all FSBO’s sell for 10% or more below the market than if they had they had sold after obtaining the services of a Realtor®
• Over 65% of FSBO’s end up in some sort of litigation or legal dispute ending up in court or arbitration and costing them more than the expected savings of selling on their own
• Most FSBO’s take longer to sell than if they had listed with a Broker
What’s the take away here? While the NAR report talks specifically about a very difficult U.S. real estate market, there are some interesting things to talk about with potential FSBO sellers and buyers; namely pricing and future litigation. Remember, if you are offering on a FSBO or mere posting listing it is extrememly important that you offer no advise to the seller. To do so puts you in an assumed multiple representation role. If the Seller asks “what should I sign it back at?” your response should simply be ” I am representing my client and as such I cannot offer you any advise”.
Naturally I would love to hear any stories you might have regarding your experiences with dealing with FSBO’s or mere postings.