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PART TWO.
Top Lead Sources Ranked From Worst To First: #31 to #24…
#31: Distressed Property.
-Currently ineffective simply because there’s very little opportunity here. This is called ‘fishing in a lake with no fish’!
Distressed property includes:
-Notice of Defaults
-Short Sales
-REOs
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- Foreclosure Rate: As of the first half of 2023, 0.23% of housing units in the U.S. were in foreclosure (approximately 1 in every 434 homes).
- Preforeclosure Stage: Data on preforeclosure rates is limited, but not all properties in preforeclosure proceed to full foreclosure. Homeowners still have options during pre-foreclosure. They can sell the home or obtain a forbearance or loan modification from their lender.
- State Variances: States like Illinois and New Jersey had higher foreclosure rates, around 0.25% (1 in every 397 homes). To find out how much foreclosure activity is in your market, use Foreclosure.com or RealtyTrac. You can also search your MLS using Foreclosure or Short Sale as a search criteria.
Note: If a buyer prospect asks you to find them a foreclosure or to look for distressed property, find out WHY. Dig deeper. Are they just ‘looking for a deal’? Are they looking for a fix and flip?
Overall, using our six filters, this lead source ranks lowest because there isn’t much to be had. Yes, some companies will take your money, promising a huge supply of leads because of a ‘100% increase’ in distressed property, but remember, this means going from .25% to .50 %. In other words, less than 1% of the market.
Spending time and money on this ‘spoke’ could make you broke while you wait for results!
#30: Buying Buyer Leads
Examples: Zillow, Realtor.com, OpCity, Market Leader, Homes.com, etc.
Using our filters, how do we rate this lead source? Very low. Why?
Buying buyer leads is:
-Unnecessary due to the abundance of free buyer leads using other methods (which we’ll discuss this week).
-Expensive
-Unpredictable
-Not yours exclusively.
-Not guaranteed to transact at all, with or without you.
#29: Billboards, bus benches, grocery cart advertisements, and urinal cakes.
-Expensive and ineffective.
-Contract with monthly expenditure required.
-Zero prequalification of anyone looking at such advertising.
Bus Bench Advertising:
Average Cost: Approximately $250 per bench per month. (creativeoutdoor.com)
Billboard Advertising:
Average Cost: Around $850 for a four-week period on average but can vary greatly and are much more costly in downtown big cities. (mediatool.com)
Grocery Cart Advertising:
Average Cost: Between $800 and $1,500 per store per month. (trueimpactmedia.com)
#28: Geographic Farming, known as ‘geo-farming.’
-Very expensive in time AND money and highly ineffective.
-Every Door Direct
-Smart Zip
-Analytics-based mailing to theoretically motivated homeowners.
Note: just because someone has lived there for 25 years and the house is paid off does NOT automatically mean they’re ready to sell.
-Could they even buy the home they’re already IN at today’s prices?
That said, if you personally have a good presence in a neighborhood or zip code, it may make sense for you to farm that neighborhood. First, do your research to see how many sales actually happen and whether it’s worth committing to a monthly or bi-monthly campaign. This is where one of our coaches can help you make that determination.
#27: Facebook Advertising
- CPC (Cost-Per-Click): Typically ranges from $0.50 to $2.00, depending on the market and competition.
- CPL (Cost-Per-Lead): Often ranges from $5 to $15, though it can vary based on targeting and ad quality.
- Monthly Budget: Most agents start with $500–$1,500/month for Facebook advertising.
This rates pretty low on our list because you’re spending money before you make any money and could get zero results while you’re figuring out the best methods. Testing out multiple ads, monitoring results, and ‘tweaking’ can cost you valuable time and money.
Leads Per Month: An agent could expect to generate anywhere from 20 to 50 leads per $500 spent, depending on the cost-per-lead (CPL).
Lead to Appointment Conversion: On average, 5% to 10% of leads from Facebook ads convert to appointments. Example: With 50 leads generated, you could secure 2–5 appointments.
Appointment to Transaction: Depending on your sales skills and lead quality, 30%–50% of appointments may convert into a closed transaction.
This leaves a lot to chance: your ability to create compelling enough advertising to get those leads in the first place, your speed and skill of follow-up, the buyer’s ability to transact (pre-qualification), and the possibility that the lead is yours alone.
#26: Branding using Social Media platforms.
(TikTok, Instagram, Facebook, etc).
-While this is entertaining and fun to create, it poses as work but is ineffective overall.
-Should be used IN SUPPORT OF your core business, not INSTEAD OF.
–Did someone go there to learn about real estate, or did they go there to watch cute kitten videos? What was their intent?
That said, there are some specific things you SHOULD be posting on your social media that support your business. Refer to our podcast about this and your daily coaching sessions in Premier Coaching.
#25: Cold Doorknocking.
-Cheap or free, but only randomly effective.
-Good place to build confidence and skills for no expenditure.
-‘Cold’ doors are the least effective. Knocking door by door with no reason to believe the inhabitants are a) the owner, b) wanting to sell, c) don’t have an agent in mind already.
-If you’re going to doorknock, make it as effective as possible. For example:
-Knock your own neighborhood to build your center of influence. You know your own neighborhood best, so this is a confidence builder and gets you used to having ‘IRL’ real estate conversations.
-Knock before your open houses, inviting neighbors (future listings).
-Knock on specific neighborhoods that your highly motivated and qualified buyers desire. Use our ‘Wanted’ Postcard, letter, or flyer from Premier Coaching.
-Realize it typically takes an epic amount of contacts to get results, but you may get some random wins along the way.
-Not predictable or duplicatable.
-Costs you lots of time.
#24: Networking Groups.
These produce random, unpredictable results but can give you a few extra transactions now and then. They’re lower on the list because they take so much time and consistency to work. You should still do them but do more of them and more consistently if you expect results.
-BNI
-Chamber of Commerce
-Entrepreneur Groups
-Investor Groups
–MeetUp.com groups
REAL ESTATE LEADS, LEADS and more LEADS: Question: What is Tim and Julie Harris’s favorite PROBATE LEAD PROVIDER? Simple, ALL THE LEADS
