So, how do you get real estate leads? Well, that’s the $1,000,000 question, literally. Us agents often hear that the broker who makes the most amount of money is the one who can get their phone to ring more often than their competition. Is that statement true? We will get to that.
Where Can a Real Estate Agent Find Leads?
Let me use an analogy: When I started pyvt, I cared little about how much traffic the website got. However, I did try a few methods to drum up traffic, such as posting an article to social media, and ranking for keywords on Google.
Posting a hastily crafted article on Twitter or Facebook lead to a quick spike in visitors, which soon dropped to none. Writing thoughtful and honest articles on the real estate blog lead to few visitors at first, but over time, many stopped by; far more than the number of visits from social media.
Here is the point: The best ways to get real estate leads are not methods that are going to make your phone ring off the hook right away. It takes time to build a personal brand.
It’s not all about the numbers too. I would much rather one call from a seller who is ready to list their $2,500,000 home, than 50 from tire kickers. In other words, quality over quantity.
Let’s go over a few ways to actually get leads.
#1 Sphere of Influence
As real estate agents, we often hear this phrase thrown around. I’ve always thought it’s a bit funny, like who’s behavior am I influencing? I’m not a celebrity. I don’t have a following.
However, having a sphere of influence (SOI) is probably the best way to grow and sustain your real estate business. Understandably, few agents and managing brokers truly understand what that entails. Numerous new agents are told to make a list of 100 people they could target as clients; like friends, coworkers, etc. So, their list might come out like this:
- James Smith, 6 Dale Street
- Kenny Fitzgerald, 26 Cool Street
- Billy Jones, 14 Fun Street …. and so on.
Then, once an agent gets to 100 names, they are encouraged to add 50 more every three months. The idea is that after a while the list will be so large that every time the agent sends out a postcard or email newsletter, they will get calls left and right from clients. The idea is spot on, but the execution is poor.
Remember when you were a kid and made a snowman. Sometimes you just kept rolling a ball of snow until it got huge. As you rolled it along, it started picking up twigs, dirt and grass. And by that time, you were supposed to add the top two balls of snow, you were so tired that you just slapped together a few mounds of messy slush on top of the base. That’s kind of like what having a bad sphere of influence is equivalent to: A Frankenstein-looking immovable mound of dirty snow.
How to Set up a Real Estate Agent Sphere of Influence
A useful sphere of influence is like a jolly snowman made of three or so beautiful spheres of snow. Here is a better way to visualize a real estate sphere of influence:
First off, it’s a sphere, or multiple spheres. But, it’s broken up into three core sections:
- Referral Network – People who can refer you clients to work with, and will very likely buy or sell a home with you.
- Client Network – People who are likely to buy or sell a home with you.
- Longshots – People who may or may not buy or sell a home with you.
Here is why separating your sphere into three lists is important: Every time you send out a postcard, it costs about 60 cents. If you send out 24 a year, that’s $14.4 per client.
Does it make sense to send out a postcard to your past clients? Well, if the average homeowner moves every 8 years, that means it will cost you $115.20 (14.4*8) per client in postcard costs for each person in your referral network alone. If when they buy and sell real estate there is a 60% chance they use you as their agent, and if when they do you pocket $5,000 in commission, that’s a good deal. In other words, spending $115.20 for an 60% chance at getting $5,000 is a bet that will make you rich.
Plus, some past clients (who you have a good relationship with) love you so much that hopefully they will refer their friends looking for homes your way too. Consequently, past clients should absolutely be targeted the most aggressively.
The problem is, some people, such as members of your local church, may only call on you to buy or sell real estate 10% of the time. Still, $115.20 is an ok deal when $5,000*.10 = $500. In other words, spending $115.20 to get $500 will push up your total marketing cost per client, but that’s a fair deal. It gets better if you can count your marketing costs as tax-deductible. Check with your tax professional on that. Ok, but how about your local politicians, whom you expect to call you only 2% of the time? That does not justify the expense.
In reality, you must determine on your own what the odds are of each person on your list working with you, giving you a referral, etc. It takes time to perfect this practice, but it very important.
After you create, or reorganize, your list, separate it into various levels of contact. Those you send postcards, emails and call during the holidays will be in the highest-level, while those you send the periodic email to will be in the lowest. In other words, the highest-level clients will be those you spend the most amount of money and time advertising towards. Therefore, you can start with multiple spreadsheets and make them look something like this:
Postcard list: Jim (level 1), Mary (level 1)
Email list: Jim (level 1), Mary (level 1), Bob (level 2), Gary (level 2)
Less frequent email list: Joe (level 3), Tim (level 3), Phillip (level 3), Claudia (level 3)
In other words, whenever you send out a postcard, your most expensive form of advertising, it would go out to those on level 1. A regular email? Those on levels 1 and 2. Less frequent contact? Level 3.
Each person, regardless of the level they are on, should have an included street address, email and phone number. This is because you may choose to reclassify some clients over time. You do not want to have to look for an old email address years after you added a contact.
After a while, your Level 3 list will be huge! After all, it should be the BIGGEST sphere. But important to note, you won’t waste money on your Level 3 clients, as the bulk of your business will come from Level 1. Of course, every once in a while, a person who was completely off your radar will ask to use your services. But, over time you will realize that having an organized sphere of influence will be worth its weight in gold.
To manage your new sphere of influence, you can start with an Excel spreadsheet or Google Sheets. Once your lists gets big enough, you may want to export them to a client relationship manager (CRM) to simplify the process and gain more insight into how your clients are reacting with virtual campaigns.
#2 Expired Rental Listings
Wait a minute, everyone knows about going after expired listings. It is pitched as one of the best ways to get real estate leads. Yet, few seem to find much success going after expired listings. That’s because everyone is going after them.
Here is a novel idea: Go after expired rental listings.
In reality, owners of rental properties are far more similar to you: They are numbers-oriented people and are always looking to do a deal. If someone can bring them an offer that makes sense on paper, they will sell.
For example, say you have 100 people in your sphere of influence, and 20 of them are past clients who own properties. Many of those property owners are investing in the stock market, yet a few will be looking for other forms of investment. Send out a postcard to those 20 homeowners letting them know you are capable of working with investors, and that rental properties in your area have a cap rate of X (X being whatever the average cap rate in your area is). After you gain a few leads (It will take some time), start reaching out to expired rental listing owners.
Remember, a rental property owner will have a set minimum rental price in mind, say $2,400 a month. But, they have likely not given selling a serious thought. Simply call them and say, “I have an investor looking to buy a X-cap property in the area. Are you willing to sell?”
When you do this, a rental property owner will know that:
- You know your stuff – You mentioned cap rates, that shows that you know the basics of investment properties.
- You are working with a serious client – A rental property owner, likely an investor him/herself, may find working with another like-minded individual appealing; more so than finding a new real estate agent, or a tenant from Craigslist or Zillow FSBO.
It’s that simple. Try it out.
#3 The Big Picture: How to Get Quality Real Estate Leads
Instead of sharing another creative way to get leads, let’s take a second to step back. I have been in real estate for a few years now, and have assisted a top performing team sell about $65,000,000 of mostly residential real estate. Cue the jazz hands, I know. I have met agents who have done double that, and many who have sold just a home or two. In fact, I have even met some who have not sold a single home at all.
What is the core difference between successful and unsuccessful agents? It certainly isn’t hustling or hard work. In other words, just because you work 12-hour days does not mean you will get many leads and become a successful agent. After all, even the largest mound of dirty snow is never going to look like a very successful snowman.
In reality, the number one skill that separates successful agents from unsuccessful ones is the ability to work smart, or think creatively. That means thinking outside of the box.
That’s where big brokerages fail their agents. Yes, many national firms give their agents some basic tools (such as a limited CRM). These software programs will help a few agents lay the foundation of a successful real estate career. However, many of these tools are often dead on arrival, stripped down and dated long before they are available to you as an agent.
Instead, I suggest all new agents find out what is working for brokers in socioeconomically similar markets. Perhaps, set up a small online business group, with four or five agents in comparable markets. These days, with Zoom and Microsoft Teams, that is easy to do. Remember, think creatively and validate every new idea. Any marketing tactic that can be automated is an added bonus, because there are only so many hours in a day. The process takes time, but you will discover new methods to find leads that work.
Conclusion – Best Ways to Get Real Estate Leads
Real estate sales are not easy. However, simply by thinking of new ways to get real estate leads, you are already focusing on the right area to expand your business. Remember, growth is usually exponential. Before long, you may find yourself a top performing agent. Lastly, make sure to follow all ethical requirements and laws when reaching to prospective real estate leads. Everyone’s time is important, including your own, so don’t waste it.
If you would like a longer list of places to find more real estate leads, check out pyvt’s resources page. I share my thoughts on many of the common, and not so common, places and tactics to find leads. Now, get out there and find your next client!