How to Generate Leads in Real Estate

I want you to think of lead generation as pulling different levers. If you're not selling at least 24 houses a year, you probably should only be pulling one or two levers. If you're trying 5, 10, different lead generation strategies, that may be why you're not selling as many houses as you want to be selling.

Even if you're selling a hundred plus homes a year, then you probably should be only pulling maybe three or four different lead generation levers.

One of the biggest reasons my first year in real estate was that I didn't sell as many houses as I wanted because I was trying to pull too many levers. I was trying Open Houses and lead generation on Craigslist and Facebook.

I was trying expireds for semi-owners, single prospecting, and going to networking events. I definitely did not sell as many houses as I wanted to. 

However, once I started pulling just two levers, about six months into my real estate career, I finished my first year with over 20 listings, which propelled me to sell over 36 houses in my second year. 

Generating Seller Leads

Let's talk about listing lead generation levers. There are a couple of different ways you can generate leads for listings, and some are very low cost or free, and some are paid. 

Let's start with the low cost or free lead generation activities: 

Your fastest, quickest, and cheapest way to get listings is to be expired listings and for sale by owners, and it's just a fact. 

There's nothing you can spend money on to get you to a listing faster than expireds and for sale by owners—the reasons for expired listings and sale by owners want to sell their house. 

An expired listing was just on the market, failed to sell, and that's why they're now an expired listing. So that's an opportunity for you to reach out and list that property now. They want to sell their house! 

Same with for sale by owners. A lot of for sale by owners don't know a good real estate agent, that's why they're a for sale by owner, and some for sale by owners try it for a little bit and then hire an agent. They want to try it out on their own before they decide to hire an agent and spend that money on commission. 

Expireds and for sale by owners are sellers w want to sell their house now. Why would you be avoiding them? 

You want to subscribe to my YouTube channel and hit the alert bell because I'm going to be coming out with more videos about how to go about actually generating these leads and what to do once you get the leads. AJ's Agent Attraction 

If you want to get started with expires and FSBOs, you will want to sign up for a service like Vulcan 7, REDX, Mojo Dialer, or Landvoice.

There are a lot of different tools you can use. But basically, you want to find something that will make your time more efficient. You want a service that will locate the phone numbers, and you want some dialer system. That way, you can make more contacts per hour. 

Circle Prospecting 

While we're on the prospecting topic, another great way to generate leads, for low cost or free, is circle prospecting. With circle prospecting, the simplest ones are just listed calls or just sold calls.  

That's simply reaching out to the neighborhood where you just listed or just sold a property, or this could be a listing in your office, if you don't have any listings. And you simply just call around the neighborhood and say, "Hi, this is AJ Mida with XYZ Realty, and I just wanted to call you because we just listed a house at 123 Main Street."

 That's the intro, and then there's a series of questions that you want to go through to determine their motivation on when they might want to sell their house. 

My favorite way of circle prospecting though, is using a new buyer script, or hot buyer script, I like to call it. 

What you do is, you use, if it's your buyer or maybe somebody in your office has a buyer, you call every neighborhood in your city that's in that price point, similar style home. 

These types of calls are so simple to make. You simply say something along the lines of, "Hi, this is AJ Mida with XYZ Realty. I'm calling because I have a buyer looking to purchase a home in your neighborhood. By any chance, do you know anyone thinking about selling?" 

They're probably going to say no, so then you say, "Great, by the way, when do you plan on moving?"

 And if they're thinking about selling, they're going to tell you because you have a buyer in hand that might be interested in purchasing their house. You're going to get tons of leads this way. That is my favorite circle prospecting strategy there is. And it's so simple. 

Direct Mail

Now eventually, you want to start enhancing your prospecting with marketing. One great strategy is farming neighborhoods with direct mail, which will cost, of course. 

You'll want to mail them at least two times, at the very minimum, one time per month. Starting with at least a farm community of 500 homes is ideal. You'll need to be consistent, and that's the key. 

 Sometimes you may not see a return on your investment for 12 to 18 months out, so this is not NOW business, but you want to start doing some marketing behind your prospecting at some point. 

You don't want to start with this if you're looking for listings now. The Marketing behind prospecting is a long-term play, and you should have a budget in mind. Say, $3,000 to $4,000 sitting there to keep investing in your farming. So you don't just, three months in, say, you know what, this isn't working, I give up. 

You want to have that money allocated because it is a long-term commitment when you're farming neighborhoods. 

You can also generate leads on Facebook, using ads like, "Find Out What Your Home is Worth, click here," something along those lines. But still, a lot of times, you're getting a deficient quality lead because they just want to know their home's worth. 

They're not necessarily a seller right now. But that gives you a reason to reach out and give them an idea of what their home might be worth. Some tools are automated that you can use to do this as well. 

 Just know, the pipeline for that type of lead will be much longer than expireds and for sale by owners. Same with circle prospecting, the pipeline for that will also be much longer. 

Those are just a few ways you can generate seller leads. There's a lot more, but those are some of my favorites, which will get you started. 

Generating Free Buyer Leads

Now let's talk about generating leads for buyers. These are your buyer levers. Again, there are two ways to look at this—low cost and free or paid. 

Open Houses

Let's start with low cost or free. My favorite for this is going to be open houses. 

Now the key with open houses is putting out a lot of signs. You might see in your community the typical open house, done by realtors, has five signs if they're doing an excellent job and some balloons. 

You don't want to hold just any house open. If your community's average sales price in your target area is $250,000, then don't be holding open houses on homes at $500,000 plus. 

You're not going to get the traffic you're looking for, and also, do not hold open houses out in the middle of nowhere. No one will see your signs to get to the open house. And they're not going to want to come because it's in the middle of nowhere. 

So, you want to find an open house that's around the average sales price in your area, and that's close to major intersections. 

And like I said, lots of signs, 15, 20, even better, 25 to 30 signs for every open house you do. You can get these low cost when you order in bulk. 

A great website for that is www.buildasign.com.   

Open houses are your Now Buyer Leads. These people, yeah, of course, some are just out looking for fun, but, on the other hand, a lot of them are looking to do something right now because they're going out of their way to check out open houses. 

As a new agent, holding open houses is a very low-cost option. You just need the cost of the signs, and sometimes you can even borrow those from the agent that might be letting you hold their listing open. 

So, focus on these first, but don't do them sporadically. Again, this is all about consistent effort. You're going to want to hold an open house open at least once every weekend. Do that for an entire year, and I promise you, you're going to be closing some homes, and you're going to be successful in real estate. 

Using Facebook and Craigslist

The second free or very low-cost way I want to discuss is generating leads on Facebook and Craigslist. 

Now you might be thinking Craigslist, are you kidding me? The first buyer I ever sold a house to was from Craigslist. 

But let's talk about Facebook first.

There are online garage sales in pretty much every city around the country. You want to post great listings that will get a lot of traffic on them in these Facebook online garage sale groups.

You're going to want to search your city. So let's say online garage sales, Charlotte, online garage sale, Morrisville (and these cities I worked in.) And just see what you can find and ask to join every group.

Then you're going to want to post consistently, multiple times a day. It's essential to post when people might be looking, maybe around lunchtime and in the evenings, and on weekends are great.

Then post a link of that listing to your website, and you want your website to be able to capture that lead.

What I mean by capturing the lead is, when they go to your website, and they look at that first property, once they go to look at other properties, which they're going to want to do, is a box is going to pop up, we call this a lead capture box. It will say, "Hey, to continue searching on my website, put in your name, number, and email." Something like that. That way, once you get that lead, it will automatically go into your phone or your email if you have a good CRM system.

That's very important, you're going to need a good CRM system when working with buyers. 

Now it's the same thing with Craigslist. That same house you're posting in those Facebook groups goes over to Craigslist and posts the exact same house. 

These are both great strategies, and they're going to generate leads. The key to these is the lead follow-up and speed to lead. When that lead comes in, make sure you call them within the first five minutes. And then, if you can't get a hold of them, call them again right after. Many times, people pick up the phone the second time. 

So, that's what you're going to want to do, and remember, speed to the lead is vital, and if you don't get a hold of them, follow up is where the fortune is made. 

Paid Ways to Generate Buyer Leads 

 Let's talk about some paid ways to generate leads for buyers. 

Pay-per-click

Pay-per-click advertising is a great way to do that, both on Google and Facebook. Now you have to remember, when you're generating these types of leads, the buying cycle is much longer than, say, an open house lead. 

For example, someone's scrolling Facebook, they're looking at their friend's cat and looking at some funny video that they see on Facebook, and then boom, "Search for homes in this price point, in this area, click here." 

 So now they "click here," and now they're searching for homes. They're probably not buying a house right now, but they saw that ad, and it was interesting enough to where maybe they were thinking about, six months to a year down the road buying a house. So they want to start looking now. 

 Buying cycle for these types of buyer's leads is typically 6 to 12 months out, and you have to remember, because I hear agents always saying, these leads aren't good, no, these leads are good, you just have to have the proper expectation. A pay-per-click lead, as I said, is going to take a lot of time, 6 to 12 months out to convert. 

 When calling pay-per-click type leads, I want you to remember that the conversion rates are extremely low, and it's essential to have the proper expectation going in. 

Out of every hundred leads that you generate, you should only expect to close between one to three. That's the reality of it. 

If anyone tells you more than 3%, they don't know what they're talking about because that does not happen. If you're outstanding, you're looking at about 3%. If you're average, 1% to 2%. 

 Remember that, so if you need to close, say, one to two homes per month from these leads, you're going to need about 100 per month, and in most markets, the average price is going to range anywhere from $10 to $20 per lead when generating these types of leads. 

Zillow and Realtor.com

All right, everyone's favorite topic. Zillow and realtor.com, love them or hate them, they work. You got to know your conversion rates, and it's expensive; there are contracts. 

 If you're brand new to real estate, I do not recommend getting into these contracts with companies. 

Never enter into any long-term commitment with a company that you don't know 100% works. 

The way you know it 100% works is you talk to somebody that's your mentor and ask them for their advice. I wasted $5,000 on realtor.com my first year on this pilot lead program they had that was exclusive to me, and I think only three leads came in. It was a complete waste of money. 

 Always ask somebody before spending any money on leads. It would be best if you had a mentor. 

 With Zillow and Realtor.com, again, you just need to know your conversion rates. 

 Say, for example, you want to start generating leads with Zillow. You're going to enter into a contract with them, anywhere from six months to a year, and you will have specific zip codes. They can be costly, ranging anywhere from 100 - 200 plus dollars per lead. 

 However, with these types of leads, it's kind of like an open house, like, this is Now Business a lot of times because they're inquiring on a specific property. The psychology of the buyer when reaching out is entirely different. 

 They're inquiring about a specific property, which means they're closer to buying now, whereas pay-per-click type leads are just searching for random homes. 

What I've seen for Zillow as a good conversion rate will be anywhere from 10% to 15%.

So if you get 10 Zillow leads, you should be converting about one. Maybe if you're newer at it, one out of every 15. So the conversion rates are much, much better with Zillow. 

Again, speed to the lead is key; you got to reach out, call them within five minutes ideally, then follow up, follow up, follow up. Follow up, again, is where the fortune is made in real estate. 

 Zillow is just like Realtor – in some markets, I see Zillow getting better results, in some markets, I see Realtor.com getting better results. 

Where Do I Start?

 The number one question I get on this topic is, AJ, where do I start? Well, it depends. It depends on, do you want to be a listing agent or buyer's agent? Do you have a budget? Do you not have a budget? 

 If you want the most control of your schedule, then absolutely go towards the listing levers. If you have zero to little money, then go after expireds, for sale by owners, circle prospecting. 

 If you're okay working with buyers and have money, start with some pay-per-click advertising because it's cheaper. 

 I hope this has helped you streamline your lead generation process and has given you some guidance as to which direction is best for you.