An effective real estate lead generation strategy in 2023 reflects the change in the market as buyers become more scarce and sales volumes do not keep up with the rate of new instructions.
In this environment, the average cost of leads rises and the quality goes down. Estate agents and brokers need to be vigilant and agile if they are to optimise their marketing dollar or their businesses will be throttled.
What makes a good quality real estate buyer lead?
Generating real estate leads of low quality is just going to waste your money and time, so let’s look at how we can assess lead quality.
There are 4 questions to ask when measuring lead quality of buyers in real estate to understand the cost, conversion rate, value and the time required to convert them.
Monitoring these measurements is vital if you are to optimise your real estate marketing expenditure and your time.
What is the cost of a real estate lead?
The cost per real estate buyer lead goes from free to tens of thousands, depending on the source. Cost is not always related to quality. For example, the best lead is yesterday’s happy customer and that cost you nothing.
Calculating lead cost is easily done with real estate software automations. Leads enter the system automatically either because of API connections or emails from third party systems that are processed through an automated email reader. UTM links can also be identified by a good CRM and each lead is exactly and automatically tracked all the way back to a specific advert, for example.
When you enter your costs and subscriptions into the CRM system, it will automatically be able to calculate the cost per lead from each source. Which means you can compare each source by the cost per lead and you will know where your cheapest and most expensive leads come from.
How many real estate leads convert to sales?
Over time, as leads flow through your real estate pipeline and become sales, you will see the statistical difference in quality from each source. Naturally some sources will have a better ratio than others, so you will need to work with fewer prospects to convert one to a sale.
This conversion rate in real estate lead generation is so important because the end result is how much you earn per hour! Optimally, you want to spend as little time as possible talking to people who are not going to convert. That’s wasted time.
Again this is something that can be automatically calculated by your real estate software, allowing you to compare the lead conversion rates from each source beside each other.
What is the value of a real estate lead?
We all know that the higher the lead value, the more expensive the sale and the higher is our commission. The lead value is an important factor in assessing lead quality but it does not mean that a high value lead is better quality for you.
The real estate market has a huge range of property prices and because of geography or market targeting you may be aiming at a particular market sector and that may define the value of your ideal leads.
If you are selling luxury then you need high value leads, but if your portfolio is at the lower end of the market then these leads are worthless to you.
Within a good CRM, you will be able to see what your website visitors are searching for and how well that matches your property portfolio.
How long does it take a real estate lead to convert to a sale?
The buyer journey in real estate can be a long one. From the initial idea of moving to comparing areas, sorting out finances, researching schools, jobs and a myriad of other things that life puts in the way it can make the process take a long time.
When the time to convert is small, the lead is higher quality in real estate lead generation because you spend less time on them and they have a greater chance of converting.
Throughout that period you will need to nurture that lead and a good real estate CRM will prove invaluable. Eventually it may turn into a sale, but statistically it is less likely than a lead which is at the end of their buyer journey.
Some lead sources will generate leads at the end of the buyer journey and if you have a good website, you will be able to adapt your SEO strategy to target those leads.
Why do lead quality stats vary across real estate agents?
No two real estate agents have the same lead quality statistics from the same source in real estate lead generation because the content and lead management process will be different.
For example property descriptions, photos, advertising copy, website design and branding will all affect conversion rates as buyers will be more or less likely to click on them. This has an impact on the cost per lead.
Speed and quality of response is the next factor because a lead is most likely to be lost at this stage. Old style auto responses get ignored so systems that can create advanced templates help to keep the prospect engaged. These templates can grab data from the enquiry as well as the listing they enquired about which means responses can be creative and very personalised.
Estate agents with antiquated CRMs or (heaven forbid) working on spreadsheets will retain fewer leads and have a lower lead conversion rate. A lot of time will be wasted as multiple systems will be used to manage listings and marketing.
Realtors using advanced systems that track and automatically chase leads will obviously have better lead retention and therefore a higher lead conversion rate. A system that centralises marketing and sales activity is ideal.
There is a big difference between those who use a contact and property management system and those who do not as these systems go a long way to helping to manage and retain your precious leads, so it is important to make the most informed decision when choosing estate agent software for your real estate agency.
The human factor is also important in lead retention, and technology helps to keep teams organised and on track with pipeline processes and managers to see easily where improvements or training is needed.
What are the 12 best sources of real estate leads in 2023?
According to the National Association of Realtors 92% of buyers begin their property search online and with QR codes and websites, even offline advertising is pushed online for greater conversion rates.
The best way to manage and monitor multiple online lead sources in order to optimise your marketing budget and time is by integrating your real estate CRM into each marketing channel.
Despite this, real estate agents lag behind other industries in terms of their online presence. So let’s take a look at real estate lead sources this year, both online and offline to see how they fare.
1. Is a real estate website worth it in 2023?
A good, fast and well structured real estate website, designed to convert and compete well in relevant Google search results will bring the highest quality and cheapest leads in real estate. This sort of website is your most valuable marketing asset.
Most of the lead sources below will directly channel leads through to your website, so a good website is needed to convert these visitors into enquiries.
Conversely a bad website will just cost money and lose leads with very little chance of featuring well in search results. Most IDX websites and just about all of the shelf property websites unfortunately fall into this category.
A website is an asset and lead generator. Unlike other online assets such as social media pages, this is yours and not subject to the whims of Facebook etc
A good website requires an initial investment in building it and a long term investment in SEO, most agents do not have a long term view and opt for a cheap off the shelf solution.
2. Are buyer leads from property portals worth the money?
Portals all around the world like Zillow, Realtor, Rightmove and Idealista continue to grow in popularity with buyers as they have come to dominate Google search engine results and provide an effective route to market for real estate agents. Cost works out better with more listings, as does general return on investment.
Instant leads at a medium cost. These are great real estate leads for new agents because you can set a budget, advertise properties and get leads right away. Generally speaking the leads are of reasonable quality. A good CRM will be able to feed your selected listings in real time to your chosen portals, so after setting up this can require no additional effort at all.
Subscription based model and a competitive environment because the lead has also likely contacted other agents. Speed of response and good systems are imperative.
3. Is PPC and online advertising worth it for real estate agencies?
If you are optimising a new website, then it will take time to feature in search results and leads will be scarce. Pay per click advertising on platforms like Google, Facebook, Instagram and linkedin can help to fill in the gap.
Instant leads and you can set a budget.
It has become increasingly difficult to cost effectively advertise and there is a steep learning curve. It can be outsourced but this will require a minimum budget and suits longer term campaigns. You will need a landing page to convert the lead.
4. Does email marketing work in real estate?
If you have the website, then email becomes a great lead generator as prospects save searches to get property matches emailed and subscribe to your newsletter to keep an eye on the local market. These early stage buyers may not be ready to enquire about a specific property but they want to have their feelers out.
A good CRM will manage the entire process of email marketing as well as track what each user is viewing on the website when a link is clicked.
Low effort as property matching is entirely automated with the CRM, almost zero cost and increasingly effective as the list grows.
Although property matching is effortless, free and automated, newsletters need quality content which can take some time.
5. Does social media posting generate leads in 2023?
We already covered advertising but organic use of social media like linkedin, Facebook and Instagram by manually posting, liking, sharing and interacting with can yield success. The key is to build a community and this means nurturing and interacting.
It’s free and if you get your messaging right, goes a great way to building your brand. If you spend your time hanging out on social media… why not?
It’s very time consuming. Possibly addictive. Ideally needs a dedicated team member.
6. Do real estate lead generation services work?
In some countries lead generation services exist. These work in a variety of ways. Some are managing PPC advertising such as Boldleads. Others promote you to users of their own websites such as Zillow Premier Agent. Most are more focused on finding sellers rather than buyers.
Often you are tied into a contract, there is a minimum spend and buyer leads may be of mediocre quality.
7. Are collaborators a good source of buyer leads?
Some real estate markets around the world rely very heavily on collaborators, other agents who introduce buyers, particularly in international real estate. Property listing feeds from your CRM are sent directly to their websites and in return they send you leads. This can even be done directly without an MLS system in between.
Low effort but leads will tend to be of good quality, depending on your collaborator. You only actually pay for the lead when a sale is made.
The eventual cost may be high as normally these arrangements are based on splitting the commission when sold.
8. Does real traditional real estate marketing still work in 2023
Have printed newspaper and magazine ads, billboards, flyers, TV and radio commercials had their day? Actually they haven’t but the key difference is that because the world learned how to use a QR code during Covid, prospective buyers can easily jump from print to your website where they are converted into direct enquiries.
Local advertising gets your brand noticed as an additional benefit. Lead quality can be high.
As well as the cost of the advertising, there will also be production costs in creating the advert. You will need a good website to convert leads.
9. Is it worth looking for lead referrals?
Offline referrals from lawyers, accountants and other professionals are good quality leads but in themself may be expensive if some commission has been promised. Nevertheless these are good links to make and can be further exploited online.
Guest blog articles and links back to your website boost real estate search result rankings, they are great for SEO if you use them.
Showing recommendations on your website brings your brand credibility and gives prospective buyers confidence to enquire.
These are good alliances to make, even if they do not generate many leads directly, they can help your online marketing.
Leads can be expensive but they are only paid when a sale is made.
10. Are open houses… still getting leads in 2023?
Holding an open house is a cheap method of gaining leads and publicity, it is not very common for homes to actually sell at an open house. If a sale is made then there may be a high cost as commission may be split between two agents.
Can be good publicity.
Can be very time consuming, lead quality can be low. If a sale is made, cost may be high if commission is shared.
11. Do exhibitions and events generate real estate leads?
Depending on your real estate market, exhibitions and similar events can be excellent lead generators although quality can be diluted by dreamers and buyers at the very early stages of their journey.
In the second home, investment and holiday home markets, these are certainly effective for buyer lead generation but a good CRM is an absolute must if you are going to keep track and not waste a lot of investment.
Can provide a large quantity of leads
Exhibitions can be expensive when all the travel, accommodation, stand building and other costs are taken into account.
12. Is an office or shop window still worth it for real estate in 2023
The most traditional method for any real estate agency is to have an office with a window displaying homes for sale and rent on window cards. And to some extent this still works. QR codes still play a part because when you are closed they can still enquire about a listing. If your office is only there for marketing and lead generation purposes, then it may be difficult to financially justify on a cost per lead basis. Nevertheless and office in your area is a big sign of credibility.
Good quality leads face to face
You need a prime location and that can be expensive.
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