Real Estate Lead Generation & Conversion

Posts Tagged ‘cost of real estate leads’

What do you want from Google?

In my last post I stated that when doing Internet marketing for real estate you don’t want to be found for a very popular search term.  I stand by that statement with two exceptions:  1) You might do this if you are building a brand, like you would at a very large brokerage firm, or 2) You might do this if you have a lot of under utilized resources on your payroll and you don’t want o fire anyone.  Either way optimizing for very popular search terms will not result in a positive return on your investment in the short term.

Before I go into why, let’s discuss “very popular search terms.”  Clearly “Chicago real estate” (with 31.1 million results) or “Las Vegas homes for sale” (with 9.7 million results) qualify as very popular search terms.  What about “Bethesda real estate” (with 869 thousand results) or “Homes for sale in Traverse City” (with 159 thousand results)?  Probably yes, still quite popular.  Even a search for “Granby CO homes for sale” with only 30 thousand results looks pretty popular.  These search results can seem very daunting for those of us with pretty small marketing budgets.  On the other hand I would suggest that this is not where you want to compete anyway.  These simple search queries “,city. +  real estate” are the targets of all the internet aggregators like Zillow and Trulia but this is not where you want to be.

Let’s now switch our focus to “How prospects use the internet.”  We have examined user behavior and classified searches into three phases:

1)       General Searches, like the ones mentioned are the place where many prospects begin their research process. To position your website to be found for this type of search will typically require the largest investment.

2)       Searches for specific locations (subdivisions, in a specific school district, etc.) or Searches for features (waterfront, granite counter tops, etc.) and

3)       Searches for streets or specific addresses

Now let’s build a profile for a typical visitor that comes to your site from each of the Three Phases of Search:

General Search Visitor: This person has typically just started their quest.  They are early in research mode.  They often don’t even know what they are looking for themselves.  Someone searching for a home in Chicago by typing in “Chicago homes for sale” still has to decide on the best area, features, etc.  The one advantage of connecting with a visitor at this time is that they probably have not engaged a real estate agent yet.  If they do give you their information at this time and you are able to set up an appointment you should expect to show this customer a lot of properties before they are ready to make an offer.  Of course there are always exceptions to this rule.   I’m just not sure I would spend the money on SEO to find those exceptions.

Visitor Searching for Specific Locations and Features: At this point your visitor has an understanding of what they want and where they want it.  They are still looking but are now zeroing in on what they feel will be their perfect home.  For example someone looking for “the Links at Poplar Creek” Hoffman Estates has done enough research to know where they want to live and here’s the best part – your website will be competing with under 6,000 other results on Google.  Another actual search example: four bedroom double bay window houses for sale in Birmingham brought a customer to our site. Search visitors in Phase 2 have enough information to be ready to make an offer when they find the right property.  Now is when the guidance and support of a real estate agent is most needed and will add the most value.

Searches for Streets or Specific Addresses: These visitors are in buy mode.  They think they know exactly what they want and have their wallets out and on the table.  The fact that they are still searching on the internet is an indication they still need an expert to help them close the deal on the perfect home.  But these visitors are so far down the search process they are the ones most likely to already be working with an agent.  We can not read people’s minds,  sometimes people start with a narrow focus but then broaden their search parameters.  For example the search: Hazel Drive house for sale in Petoskey brought a visitor to our site that spent the next 18 minutes viewing 45 different pages.  And the visitor that searched for: 9107 East Starhill, Lonetree then spent the next hour and a half viewing different homes listed on our site.  BTW only 21 websites showed up for this search.

Okay now we know what Google wants and we know what we want from Google, next we discuss how to match this up and achieve SEO success with your website.

The question of how much should a real estate broker or agent pay for Internet leads is a frequent topic of conversation.

The answer is “it depends”. The quality of  leads vary dramatically from lead generation firm to lead generation firm. In addition to the charge from the lead generation firm, there are the costs incurred and time involved in working the leads. For a low quality lead that is being resold to numerous real estate professionals and that has a liklihood of closing of under 0.5% (1 out ot 200), one dollar may be too much tp pay. On the other hand, a fresh lead that is requesting a showing of a specific property on a specified day may be worth over $100. 

Ben Roberts, TheExitPro, has researched the cost of leads from a sampling of the top lead generation firms. With his permission, his research is being republished here. We are  publishing an except from Ben’s article on the prices of some of our competitors in the lead generation space in part because we are very confident that the quality and the pricing of the leads Broker Dynamix  provides to our clients compares favorably to the lead generation service  of these competitors:

Realty Generator (market leader) – $15-$30

Is generally on a small brokerage basis and pricing starts with $1500 a month ‘maintenance” plus whatever PPC advertising you’re going to do through them. I will say, their system does work but it takes several months to see leads coming through the funnel turn in into closed business. A 12 month contract is required for a minimum of $18,000 without advertising. You’re paying some major bucks in the meantime so make sure you have cash in reserve. You can also drive the price per lead down if you can drive your own traffic to the site via organic search.

GetMyHomesValue.com -$225-$400 (per month) Average is 4-7 quality clients a month

GMHV is a service that calls it’s lead generation efforts referrals… that’s fine I guess since that’s what they are. They give their clients exclusive access to a zip code or designated area for a monthly fee. The contract is month-to-month. They claim 4-7 quality leads per month but some agents get as many as 60 quality leads.

HouseValues.com (market leader) – $30-$50

HV (I had HV in 2006 so I know this one intimately) provides similar lead generation as GMHV but they don’t ‘vet’ their leads the way GMHV does. Leads are sold in blocks with a guaranteed minimum ($99 gets you 3 minimum, etc). You can get HV in a 6 or 12 month contract. Let me know before you sign up (if you do) and I can make a $250 referral off you… which I will promptly send to you in the form of a cashier’s check. There’s sticking it to the system

Lead to Realty – $49.95 ($39.95 for EXIT Agents)

At least LtoR spells it out. $40 bucks. That’s what they charge EXIT agents for a lead. Converted or not. You can return leads based on your ability to contact, the lead working with another agent, or they aren’t buying or selling. That’s not bad. They have 18 different ‘landing pages’ that target specific buyer and seller targets like Luxury Buyers, Foreclosures, Tax-Credit, etc.