As market conditions slow, transforming from a “speed-based market” to a “skill-based market,” lead generation will likely be key to tens of thousands of less experienced agents staying in the industry or washing out.
Adam Wiener, the president of real estate operations at Redfin, and Michael Lane, the VP and GM of ShowingTime, addressed the future of online lead generation during a panel on Wednesday at the 2022 Gathering of Eagles conference.
While most established agents and brokers acquire leads through referrals and repeat clients, newer agents with smaller marketing budgets turn to online sources to help generate leads and close deals.
A 2021 survey by the National Association of Realtors found that over half of respondents said that social media was their top lead-generating technology tool and 53% said that social media was the most valuable technology tool in the business. The most popular social media app among the random sample of realtors surveyed was Facebook, with 90% of respondents reporting they used the app, followed by Instagram at 52% and LinkedIn at 48%.
“For newer agents that don’t have a high close rate or who are just starting, they don’t have a ton of money to spend out of pocket on advertising expenses, so meeting clients online can be a great tool,” Wiener told conference attendees. “It is a great way to jump start your business.”
While meeting clients online can be a great way to generate more leads, it’s a challenge to weed out the casual home searchers from the serious buyers.
For both Wiener and Lane, getting buyers to commit to a house tour is a great first step to taking the relationship into the real world.
“The first home a buyer tours is most likely not the one they will buy, but it is a golden lead generating opportunity for agents,” Lane said.
Agents today have to adapt to consumers’ expectations of instant gratification. Today, when a homebuyer clicks a “schedule a tour” button on a brokerage website or on a listing aggregation platform like Zillow or Redfin, instead of seeing a completely open calendar, searchers can see exactly when a home is available for touring and if other tours are scheduled. According to Wiener, this has resulted in fewer showings being booked, however the number of completed showings has remained that same. Wiener concluded that the more casual home searchers are getting weeded out.
Another strategy Wiener said Redfin has utilized to find more qualified leads, is to ask users a series of questions about their home search and whether or not they would consider working with a Redfin agent. While this has reduced the overall number of leads generated by Redfin agents, Wiener said the number of sales has remained steady.
“It is getting rid of those spurious clicks and helping agents use their time more efficiently,” Wiener said.
For brokerages or teams lacking the manpower or technology power to create an online survey like Redfin’s, Lane suggests calling clients who book home tours before actually going on the tour to get a better sense of where they are in their home buying journey.
Although most lead generation is focused on home buyers, both Lane and Wiener told attendees to not ignore lead generation opportunities with home sellers. They suggested finding a happy medium between the online algorithm-generated price estimates and the full, in-person sales pitch. At Redfin, Wiener said this means offering them a Redfin Now cash offer estimate, but he said that there was no one right way to go about doing this.
“We need to make it a more frictionless experience for sellers, so no one feels that their time is being wasted,” Lane said.
At the end of the day, both Lane and Wiener said that balancing the friction of lead channels for consumers with the cost to serve clients will be key for agents and brokers who wish to improve their close rate.