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Do real estate lead generation companies work?



Do real estate lead generation companies work?


Real Estate Marketing 101 -- generate new prospects by marketing your services or products.  The easiest way to do this is through advertising, but it can be expensive. The alternative is generating leads from social media sites like Facebook. There are many different ways to market using these platforms, and some of them offer better results than others.

In order to find out which ones provide the highest quality at lowest price point we researched several popular online lead generators that allow you to advertise your properties directly via their websites. Our goal was to determine what kind of traffic you get with each service, how much they charge per lead, and how long it takes before someone calls you about one of your listings. Here's our findings:

What is a good cost per lead on Facebook for real estate?

Facebook Advertising - $50-$150 max bid/day (depending upon location)

Cost Per Lead = $12-20

Average Response Time = 1 week

Lead Quality = High

Customer Satisfaction Rate = 87%

Best For : Those who don't want to pay high commissions. Also great if you have multiple listing agreements already set up with agents.

Worst For : If you need immediate responses because you're trying to sell quickly. You'll also want to check your local laws regarding selling property without an agent attached to your ad since there may not be any compensation available.       

A couple weeks ago I wrote an article discussing why I think Facebook Ads are so important in today's market. In short, my opinion is that Facebook offers both marketers and sellers access to highly qualified buyers looking to make a purchase decision right away. Because of this, I believe these ads are ideal for those buying as well as those selling. While I've seen prices ranging anywhere from $50-250+ per day depending on where you live, I found that the majority of people were paying between $75-125 dollars per day. This number isn't too shabby considering the amount of traffic you receive when running these campaigns, especially compared to other methods such as Craigslist or newspaper classifieds.

As far as response times go, I did notice the longest time being around 2 months but the vast majority of advertisers reported getting answers within 7 days. To me this means that anyone interested enough to click on your link will likely be ready to buy, making this option very appealing to potential homebuyers. Finally, although it varies somewhat from state to state, the industry standard seems to be offering 85%-87% customer satisfaction rates. With all things considered, I would say Facebook has been proven effective even though the competition is stiff!        

If you'd prefer not to use Facebook then please continue reading...

For Real Estate Agents & Brokers: RealeFlix

Realeflix allows users to create custom Facebook pages specifically designed to promote REOs, FSBOs, and rentals. Users simply choose a category of homes (such as Single Family Homes), upload photos, write descriptions, add amenities, and publish their page. Once published, visitors can comment, share links, and interact with the posts just as if they were commenting on the user’s personal profile. It doesn’t matter whether the visitor comes from Facebook or another website – once he sees your post, he will see your call to action. All content is optimized to attract organic clicks to your site and increase conversions.        

There are two main differences between RealeFlix and traditional Facebook advertising. First, instead of targeting a specific demographic and geographic area, RealeFlix only targets homeowners searching for rental, foreclosure, or sale opportunities. Second, unlike regular Facebook advertising, RealeFlix does NOT show sponsored stories. Instead, visitors must opt into the program to view advertisements.

According to statistics provided by RealeFlix, here are some interesting facts about their customers:

· Their age range runs from 20-80 years old.

· They spend 5 hours per month browsing the platform.

· 80 percent of viewers watch videos during their visit.

· 60% of viewers follow businesses on Twitter.

· 57% of viewers followed businesses on Instagram.

· 43% of viewers follow businesses on LinkedIn.

· 30% of viewers follow businesses on Pinterest.

· 28% of viewers follow businesses on Tumblr.

· 23% of viewers follow businesses on YouTube.

· 21% of viewers follow businesses on Google+.

To summarize, RealeFlix provides a unique opportunity for renters, owners, investors, loan officers, lenders, mortgage brokers, and title agencies to easily connect with potential clients.        

Here are some quick tips on setting up your account:

1.) Create your own Facebook Page or fanpage rather than joining an existing FanPage.

2.) Write a compelling description that describes exactly what your Facebook Business Page is about. Make sure to include keywords relevant to your product or service.

3.) Use clear graphics and images to engage visitors. Don't try to overcomplicate your presentation.

4.) Post updates frequently and keep your message simple.

5.) Ask questions and let visitors respond to your posts.

6.) Be consistent and build relationships.

7.) Keep track of analytics so you know what works.

8.) Share "likes" with others. Encourage referrals.

9.) Respond promptly to comments.

10.) Interact with followers. Answer questions. Give helpful advice. Offer free information.

11.) Pay attention to SEO. Optimize your webpages for search engines.

12.) Link back to your webpage whenever possible.

13.) Utilize RealeFlix'S Social Media Plugins. These plug ins display your latest status update, photo gallery, blog, video feed, etc., next to every piece of content posted by friends and fans.        

If you decide to join RealeFlix after reading this guide, you should expect the following benefits:

· Ability to send messages straight to your target audience.

· Ability to customize your landing page to match your brand image.

· Access to RealeFlix'S proprietary algorithms for improved relevancy.

· 24x7 support team assistance.

· Exclusive discounts from partners.

· Free training.

Bottom line, while it might seem like RealeFlix requires a lot of effort, it really isn't. Creating a Facebook Page and updating regularly shouldn't take more than 15 minutes per week. Plus, you won't have to worry about annoying your family members or neighbors because everyone gets notified when you post something new. As far as costs go, the first year starts off at $99/month, and subsequent years fall under $49/month. That said, you could potentially save money by bundling together multiple subscriptions. Just ask one of their representatives about signing up for a multiyear plan.        

For Sale By Owner Owners: Zillow Group / Trulia

Zillow and Trulia offer similar options for buyers and sellers alike. However, due to the fact that they cater mainly towards non-real estate professionals, you will probably end up seeing less commercials promoting these options than you do with Realeflix above. Both Zillow and Truliacommunities are made up of mostly private individuals whose primary interest lies elsewhere. Still, they're worth exploring if you're serious about finding a buyer for your house.        

When it comes to pricing, Zillow charges $199 per month whereas Truliacosts per person per month starting at $14.95/person per month. On top of that, they offer various plans including a monthly unlimited plan, quarterly limited packages, and yearly unlimited packages. Although Zillow is slightly cheaper than Trulia, the latter tends to be slightly faster when responding to inquiries. Trulia, however, has a larger database of active searches. At least according to the numbers presented below:        

One thing to consider when deciding which company to use is to look at the ratio of hits versus views. According to data collected by Similar Sizemodo, the average hit rate for Zillow is approximately 6%, whereas Trulia boasts a hit rate closer to 14%. So, if you're planning to list your house for sale yourself, Trulia seems to be a viable choice.            

Also, keep in mind that neither Zillow nor Trulia automatically display featured listings unless specifically requested to do so. Therefore, you will generally need to contact either company separately if you wish to feature your property.        

Another difference between these two companies is that Zillow focuses solely on single-family homes whereas Trulia includes condos, townhomes, mobile homes, recreational vehicles, and RVs. Another benefit to note is that Zillow's community section gives users the ability to learn more about neighborhoods, schools, crime reports, and events near their desired neighborhood. Lastly, you can always request a customized report from Zillow which details everything about a particular address.        

Real Estate Lead Generation Companies are businesses that provide agents with pre-qualified buyers for their listing or buyer's agent services. They can be an invaluable resource in growing your business because they help you avoid wasted time by screening potential clients so you don't have to waste it yourself. Leads also allow you to focus 100% of your efforts toward selling homes while taking advantage of other avenues like referrals from partners working within different industries. With such a wide range of options available, choosing which service to use becomes even more difficult. Here we'll look at how each company charges its members, what kind of results you should expect, and whether it might fit into your overall strategy.

What is lead generation worth?

When considering any type of outside income stream, cost effectiveness is usually one of the top priorities when looking at all possible revenue sources. If you generate $100 per month through this source but only end up spending $50, then your ROI will not be as favorable as if you spent 50% less. Real Estate Leads are no different, yet many people fail to realize just how valuable these resources really are until after they've been using them for awhile. The average person spends about 2 hours every day online searching for things (and sometimes paying out of pocket for those items). This means there are literally millions upon millions of searches happening everyday. Most of those searches revolve around finding information related to something that would benefit someone else, specifically homeowners who are currently in need of home improvement contractors. In order to make sure our customers find exactly what they're looking for, we filter down thousands of listings to bring you the highest quality local candidates. By doing this, we keep customers happy, save them money, and most importantly, help them get qualified prospects calling us instead of wasting their time!

By utilizing a reputable Real Estate Lead Company, you know that your phone calls won't go unnoticed nor will your message be passed over without being read. Most brokers rely heavily on Real Estate Leads to stay afloat during slow times, so it makes sense why they'd want to pay for them. However, although they can certainly seem pricey at first glance, the benefits far outweigh the costs. When compared to traditional methods, they offer a huge return on investment and often require a smaller upfront fee than others. On top of that, some may charge additional fees depending on where you live. For example, if you live in Florida, you could easily end up shelling out hundreds or even thousands of dollars before ever getting a single call back. There are plenty of great lead providers across the country, but here are three popular ones.

HomeGain [Broken URL Removed] - Homegain offers two types of membership plans, both of which include access to high quality data. You can either sign up for the "Basic" plan ($19/month) or "Premium" plan ($29/month), though Premium does come with extra perks like priority service, unlimited email support, and automatic upgrades. Both plans give you full control over your list selection and delivery preferences. Basic subscribers receive 1 new candidate daily, whereas premium users receive 3 new candidates daily. As long as you choose Direct Mail, you can select which markets you wish to target and the amount of days you prefer between sending. Members aren't required to send out large batches of mail, however it generally takes 7-10 days for a response. Also, unlike other services, you can track responses directly inside your account.

Coldwell Banker Residential Brokerage - Coldwell Banker Residential Brokerage is known for having one of the largest databases of Real Estate Agents worldwide. Their website is easy to navigate and gives you quick links to various sections including search tools, education, and training. Like Home Gain, they offer several plans. You can join for free for basic member features, or upgrade to the Gold Membership ($199 annually) for advanced functionality. To qualify for Gold, you must purchase a minimum number of monthly subscriptions, typically 10. Once you reach Gold status, you can enjoy added benefits, increased exposure, and enhanced member privileges.

In addition to the above mentioned companies, there are numerous other reliable Real Estate Lead Providers throughout the US & Canada. Some examples include PropertyShark, REALTOR.com, Trulia, Zillow Group, and Redfin. It comes down to personal preference and budget since everyone has unique needs. Whatever works best for you, make sure to take advantage of a legitimate Real Estate Lead Provider!



How much do Realtors spend on lead generation?

As previously stated, the price point varies greatly among Real Estate Lead Generators. While some companies may charge upwards of $1,000+ per month, the majority charge somewhere between $250-$499 per month. Depending on your current situation, budget, goals, etc., you may decide that spending slightly more now is better than saving later when you see little to no returns. Others simply cannot afford the luxury of dropping another $500-$1000 per month onto advertising expenses. Either way, below are listed two of the leading Real Estate Lead Providers in terms of affordability and success rates. Keep in mind that prices vary widely for each provider, and may change frequently due to fluctuations in market conditions.

REAL Trends - REAL Trends provides affordable packages starting at $49.99 per month and ranging in price accordingly. Its Pro Plan includes everything except Referral Credits, which requires a separate payment. Each package allows you to upload multiple MLS Listings simultaneously, create customized postcards, and utilize the built-in mailing system. Your prospect pool automatically updates itself, ensuring that you never miss out on a hot deal again. Although the site interface isn't very user friendly, it is still functional enough to complete simple tasks.

ZILLOW - One thing to note about ZILLOW is that it seems to be mainly targeted towards sellers rather than buyers. Since nearly half of all residential transactions involve the sale of a property, this makes sense. What doesn't make sense, however, is the fact that ZILLOW charges $59.95 per month for Buyers' Agency representation. A little expensive for buyers, right? Luckily, ZILLOW does provide some value for your money. First off, it is definitely easier to navigate than REALTORS® Association websites (which tend to be cluttered with unnecessary information). Second, it has one of the larger databases nationwide, making it ideal for targeting specific areas. Lastly, it supports a variety of advertising formats, allowing you to pick whichever option suits your style.

Regardless of which provider you ultimately choose, remember that advertising your business via social media platforms is extremely effective. Even if you are unable to devote an entire week to Facebook Ads, consider creating a Facebook Business Page to promote your offerings. Another fantastic idea is to implement Google AdWords campaigns. These sites are designed to show ads exclusively to people interested in particular keywords. Therefore, the goal is to rank highly in organic search results whenever anyone enters said keyword(s). Be wary of "pay per click," however, as these ads quickly become too costly to continue running.

How much do Realtors spend on leads?

This question gets asked quite frequently. How often depends largely on the size of your practice. Larger firms, especially those that sell properties professionally, almost always invest in Real Estate Lead Generation Companies. Smaller agencies often struggle to justify the expense unless they manage to obtain a certain volume level consistently. Let's break down the numbers. Generally speaking, Real Estate professionals earn anywhere from $20-30 per transaction. Assuming that each transaction consists of 5 contacts, this adds up to roughly $150 per client. That's a pretty good rate, but unfortunately, it tends to decrease significantly as your turnover increases. After five years, your net profit margin drops to approximately $70 per client. So let's say you had 100 active deals last year. At this rate, you'd end up losing $70x100 = $700. Of course, if you were to increase your turnkey sales percentage from 40% to 45%, you would start seeing greater profits sooner.

Now let's compare that to the approximate annual operating costs of a typical Real Estate office:

Purchasing Agents salary + commission ($40k x 0.25%) = $10k

Office Space rent ($15k x 6 months)/ 12 )= $90

Utilities($6k x 8 weeks)=$48

Telephone Service ($5k x 14days)= $70

Marketing Salaries ($3k x 4 employees) =$12k

Total Annual Costs=$212.50

The bottom line is that purchasing agents actually make more money than Real Estate Agents, despite the latter's higher overhead. But what happens when you factor in the commissions paid to buying agents versus the lack thereof for Real Estate agents? Well, that explains why many small offices hire a third party lead generator to handle the bulk of their marketing duties. And according to the National Associaiton of Realtor®, 87% of Real Estate Agents use lead generators.

If you're looking for an easy way to increase your sales volume during this recession, generating quality prospects may be the solution. By using one of many online lead generators, you can quickly connect with targeted buyers who are ready to buy homes right now -- without having to do any marketing or cold calling yourself.

But what if you don't want to use these services yourself? Do they actually help generate more clients for Realtors and brokers? Are they even effective at all? If not, how much should you pay for them? Is there value in outsourcing lead generation?  Let's take a closer look at some popular options out there.

Are lead gen companies worth it?

Lead Generation Companies (LGCs) have become increasingly common as technology has allowed realtors and agents to reach more potential customers than ever before. They range from free websites that offer simple lead capture pages where visitors enter their contact information so a broker or agent can call them later, to full-service providers that will send emails, calls, and postcards to current homeowners, prospective sellers, or anyone interested in buying property within your area. There are also LGCs that focus specifically on generating clientele for certain types of professionals such as attorneys, CPA firms, mortgage lenders, etc. Some only provide referrals while others attempt to sell home insurance alongside other products. Many rely heavily on data collection tools like cookies and IP addresses. And most charge anywhere between $5-$20 per month depending on whether they require personal information beyond name and email address.

The question we need to ask ourselves when considering which type of service to choose is "What am I trying to accomplish?" The first step in answering this question is making sure our goal is realistic. For example, does someone moving into an apartment really need life insurance? Does every single homeowner want to hear about new listings each time you log on? How often should we send a postcard? These questions must be answered honestly because the answer impacts both the amount of effort required to maintain a relationship with your subscribers, as well as your overall success rate.

A good rule of thumb is to find the company with the lowest price tag but highest customer satisfaction rating. This will ensure that you get exactly what you paid for and won't end up feeling ripped off later. Of course, cost isn't everything. You'll still need to decide how useful those monthly plans are for your particular needs. But if you're just getting started in real estate, it may be easier to go with something less expensive until you gain experience and build your own subscriber list over time.

Is Starting a Lead Generation Business Worth It?

Starting a lead generation business sounds great but is it worthwhile? Here are three things you should consider:

1. Time Commitment: Will you devote enough time to successfully run the business? Most people aren't willing to make this sacrifice. Real estate businesses typically involve driving around neighborhoods, showing properties, negotiating contracts, preparing paperwork, maintaining a website, and doing follow ups. All of these tasks could easily consume 40 hours a week! That means you'd probably spend 4 weeks of solid, focused work on your campaign every two months. Even if you were able to manage multiple campaigns simultaneously, you would be working 8+ hours a day instead of spending time with family and friends.

2. Money: What kind of budget are you going to set aside? Marketing costs vary widely from industry to industry, but let's say you plan to spend $500/month total on advertising expenses. A typical ad might include 1 print advertisement running once a quarter and 2 billboards running twice per year. At this rate, you'd end up paying $100 for 3 months' worth of ads. Obviously this figure doesn't account for other marketing efforts such as direct mailers, brochures, social media, etc., but you get my point. Unless you've got deep pockets, there are better ways to invest your precious funds.

3. Value: As mentioned earlier, you should pick a provider that offers high customer satisfaction ratings and low prices. When selecting a company, search for reviews by former users rather than relying solely on the positive testimonials provided by the owner. Also check out forums and blogs related to your niche market. See which ones seem to receive the most complaints and why. Chances are, the majority of unhappy customers didn't know how to properly evaluate a lead generator. In fact, many complainers are likely partaking in false advertising. So keep your eyes peeled for signs of trouble ahead.

Once you understand what you expect from a lead generation program, determine what features matter most to you. Then compare providers side by side and see which ones fit your requirements.



Do lead generation companies work?

With so many different lead generation companies available today, choosing the right one is harder than ever. To simplify the process, here are five factors to consider when deciding whether or not to sign up with a specific provider.

1. Reliability: One thing you shouldn't overlook is reliability. After all, your newsletter is crucial to reaching new clients. Don't settle for an unreliable service simply because it's cheap. Test out the company's servers, software, phone lines, etc. Try sending them an important message and see how long it takes for them to respond. Ask them to explain delays in delivering messages, especially after placing orders. Pay attention to areas where they mess up frequently and try contacting support staff to resolve issues. Look for evidence of negative feedback left behind by previous customers. Finally, read reviews posted on third party sites like Yelp and Angie's List.

2. Support: Customer service matters! Make sure the company responds promptly to inquiries, provides helpful answers, follows through on promises, and resolves problems efficiently. Keep track of deadlines and always communicate clearly. Be wary of companies that promise 24 hour response times yet leave customers waiting days upon days.

3. Tracking Tools: Find out beforehand which tracking tools will be used. Although most providers claim to use unique codes to identify individual readers, chances are that hackers will eventually discover loopholes in their system. Check to see whether they utilize encrypted tracking methods. Ask about future updates and changes. Find out how many emails sent vs. opened rates. Track the number of unsubscribes and bounce backs.

4. Privacy Policy: Read privacy policies closely to avoid being caught red handed. Watch out for clauses allowing advertisers to share your private info with affiliates and unrelated parties. Legitimate programs will disclose this information upfront.

5. Data Sharing: Never give out sensitive financial details such as credit card numbers or Social Security numbers unless absolutely necessary. Avoid signing agreements promising to transfer data outside of your control. Beware of companies that collect too much information and then fail to delete outdated records. Always opt out of e-mail lists whenever possible. Learn about the terms under which data collected will be shared.

Keep in mind that no lead generation provider is perfect. While some may lack certain key features, others may fall short in other areas. Therefore, it's vital to weigh all aspects of a given program carefully before committing to it. Consider taking advantage of trial periods offered by some services to test drive various offerings before settling down with a permanent subscription package. With diligence, you can learn valuable lessons along the way that will benefit you for years to come.

Is there money in lead generation?

So far we've learned that starting your own lead generation business isn't necessarily profitable since it requires dedicating lots of time and energy. Now, let's discuss whether or not there's actual money to be made.

As previously stated, lead generation companies tend to fall into several categories including referral partners, mailing houses, website builders, and digital publishers. Referral partner programs usually require users to fill out forms so they can pass along their contact information to local realtors in exchange for a small commission fee. Mailing house providers rent space on postal boxes and distribute promotional materials such as flyers and coupons. Website builder companies allow individuals to create customized webpages with templates. Digital publisher services produce newsletters filled with content relevant to a user's interest.

Depending on your target audience, one strategy may be worse than another. For instance, if you specialize in selling luxury condos, a referral partnership may not be appropriate since condo owners are already familiar with your brand and wouldn't feel inclined to refer you to their neighbors. On the other hand, targeting non-luxury residents may prove difficult due to limited availability. However, regardless of category, you should aim to maximize conversion rates and reduce spam as much as possible.

It goes without saying that the bottom line ultimately determines profitability. If you're unable to profitably convert traffic into subscriptions, you're unlikely to earn back your investment. Just remember that converting traffic into leads involves building relationships with prospects, not pushing product placements. Your ultimate objective is to develop rapport and trustworthiness so that potential clients seek out your services voluntarily. Once you establish credibility, you can begin charging higher fees.


Author

Mathieu Picard

CEO, Anyleads, San Francisco

We are the leading marketing automation platform serving more than 100,000 businesses daily. We operate in 3 countries, based in San Francisco, New York, Paris & London.

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