The Real Estate Seller Lead Gen Landscape has Metamorphosed

Tristen Ahumada (That guy from Lab Coat Agents) and some other smart folks created a new Real Estate News site. He was kind enough to ask me to contribute something on Real Estate Seller Lead Gen to Kirbly This a a republication of that post from last week. Check out Kirbly for your RE news fix.

Under all is the land. Yet outside forces are altering everything we stand on and all we can see – even beyond the horizon. This is a truly remarkable time to be in Real Estate because in changing times there will be huge winners. In the past we’ve seen that those winners pivot quickly and appropriately – months ahead of their competitors.

Real Estate Teams that are crushing it in this current market are currently cheating the system. They are utilizing an old school strategy combined with today’s Artificial Intelligence to dominate the competition.

In most states, 50% of agents didn’t do a transaction in 2023, and those that did multiple transactions outside of their referrals are frequently stuck on a hamster wheel. They buy leads, invest in working them, close a small subset and then repeat. Month after month this continues as they run in place not able to escape the hamster wheel nor plan an exit.

But this still is not the bulk of transactions. The bulk of transactions are with a select few that dominate.

With the one two punch of the DOJ/NAR diminishing the value of seller leads, and the SEC ruling to reduce spam leads must be sold 1:1 rather than one to many – the lead landscape has shifted dramatically in 2024.

The One Two Punch

-DOJ/NAR – Much has been written about this situation, but the consensus seems to be that working buyer leads will require a work-around, making it more difficult to ensure compensation. This will take a while to shake out – so from this standpoint buyer leads are a bit risky currently while all of them sit in purgatory.

–SEC & Spam – The Government wants to reduce SPAM and I’m a big fan of this in theory as a consumer. TLDR: Leads may not be bulk sold going forward. They must be sold 1:1. As an example: If Bob the Buyer clicked on a zillow listing, and requested more information, that lead would be sent out to more than one realtor.. Sometimes more than 20 real estate agents. (see also mortgage and title etc) However, now – they can only sell a lead to one person, so they will inevitably raise the price of that one lead to compensate for the lost revenue from the 19 others.

What was an almost “even” playing field in 2023, will soon be forgotten. The metamorphosis of the rules is ongoing. Yet we can already see that seller leads have won the evolutionary battles, and now stand a far superior lead option and will become more valuable going forward.

The Cheat Code

Many nerds will remember the cheat codes of early video games. They opened up invincibility, extra or unlimited lives or cool new tools and levels. Learning the recipe for a cheat code was awe inspiring. Implementing the cheat code instantly transformed you, leveling you up on another tier.

In real estate the secret, you already know to be true. Buying is better than renting. Top teams that are crushing it know this and use this cheat code. They get off the hamster wheel (or significantly reduce their spend) renting leads.

Inorder to make up for it – they own their own database. Owning is better than renting. They leverage data they own (their databases) in order to find SELLERS in their own Geography.

The Success Formula
-Detox your data (remove duplicates, bart simpson and other realtors)
-Repair and append your database (fill in the blanks)

–Buy a Geo Farm (must have name, phone, email and physical address)
-Market to this list for 6 months (offers of value: Invitations to events, neighborhood market stats, relevant seasonal content and eventually a CMA)
-Slowly reduce your lead gen rental budget

This is not easy nor quick to do on your own – but highly effective long term. The upfront time-cost is offset by reduced spend on leads in the future. I know many people have paid a VA to do data clean up and data entry very successfully.

Again – cutting off lead buying cold turkey is not the recommended strategy – but rather ease off the throttle as your new self generated leads begin to flow over time.

Transactions are Actually Abundant

I’ve looked at hundreds of realtor databases over this quarter. The best closing ratio I’ve seen is 11% inside a database. IE: 89% of the transactions in a database, were with another agent. This is Millions of dollars of sell side commissions – lost to the competition. You don’t need more data – you need to focus on those people that are in your own database.

The Easy Button

The easy button here for Real Estate Seller Lead Gen, is that Revaluate can do most all of the above, with a white glove service – AND it leverages AI to identify likely movers so you can be more efficient with your marketing efforts. Revaluate will do a FREE database grade and audit AND tell you how many transactions were in your database in the last 12 months.