The Secret Gold Mine of Home Seller Prospects.
Why Home Sellers vs. Home Buyers?
It's not a huge secret that property listings, and therefore home sellers, are the holy grail for many real estate agents. Why is this? If you have active property listings you have a reason to promote your listings (and yourself) through yard signs, print flyer advertising, schedule open houses, post property listings on your website and MLS/IDX listings all over the internet such as Zillow, Trulia, Realtor.com and many more. So savvy real estate agents soon discover that having active home listings helps to attract more home sellers and generate more home listings. A cycle that many real estate top producers have built their business success on.
In contrast, if you are actively working with a potential home buyer under a buyer brokerage agreement there's no public advertising, promotion or inherent marketing activities that are associated with this.
Where Can I Find Home Seller Prospects?
Now you know "why" home listings are important to growing a successful real estate business. But your next burning question probably is — "where" can I find potential home seller leads?
Let's face it. Many agents spend a lot of money on real estate lead generation to find potential home listings such as flyer advertising, digital marketing, websites, SEO, online ads or social media promotion — with the ideal goal of finding "active sellers" ready to list their home today. However, too often these methods of real estate marketing don't provide a great return on monetary investment and can result in precious lost time chasing leads that don't convert to a loyal client or a sale transaction.
Why don't the typical methods work? The problem is they are competing directly with every other agent, brokerage and real estate website on the internet to try and find the same, relatively small, pool of "active sellers" looking for a REALTOR® to sell their home right now. This is why the lead conversion rate of most real estate lead generation techniques are very, very low and typically require spending $1,000's of dollars in advertising or lead generation EVERY MONTH to produce any new clients that actually close a deal.
It's pretty clear to see why the only agents that actually win out in the highly competitive game of online real estate lead generation have the largest marketing budgets and automated systems in place to help convert new leads. But it's not a realistic option for an average or new real estate agent with little-to-modest advertising budgets.
The good news is, there is a better way.
Why Pay for Home Seller Leads?
For most real estate agents, especially new agents, they can't afford a massive monthly marketing budget that is needed to compete with top producers using traditional advertising or online real estate lead generation methods. But, before you throw in the towel – there is a better way to generate home seller leads for free and any agent can do it.
Great how do I get started?! Here's how.
First, we need to recognize that every potential home seller "lead" is always a homeowner first. Not a revolutionary, mind-blowing concept, right? Maybe not, but it is a key customer insight that is overlooked by most agents and can provide a huge marketing advantage and higher "lead" conversion rates, without spending anything on advertising or lead generation.
Second, let's combine the previous fact (every home seller is a homeowner) with the statistical data provided by the National Association of REALTORS® (NAR) that approximately 11% of people move each year, and you have the scientific basis for a simple home seller lead generation system that any agent can use. Put it another way, if you talk to 10 homeowners, statistically speaking 1-in-10 will move this year.
Remember, home ownership is a "cycle", not a one-time event. In fact, according to the 2016 Census by the U.S. Census Bureau, the average person will move 11 times in their lifetime (that's 11 potential cycles of a buy transaction and a sell transaction, or 22 in total). That means every homeowner will eventually sell their home. So what if you could find and connect with homeowners before the sale — and before any competition or other lead generation system even has a chance? Oh wait, you can and it's free. That's what we'll show you how to do in this blog series using a simple system (and a CRM if you have it).
To get started, let's take a look at the "real estate cycle" from the homeowner's perspective.
What's the Real Estate Cycle?
1st Quarter – The Home "Honeymoon" Phase
This is the point in time right after a home owner has purchased their home. The transaction deal is now done and typically the real estate who helped them buy the home will leave the picture as soon as the homeowner begins living in their brand-new home. For the first quarter portion of the home ownership cycle, our clients usually love their home. They are putting their own stamp on it with renovations, additions, upgrades, or whatever, but they usually like the home they purchased. Just like a relationship with a significant other, this time is the "honeymoon phase" where the home can do no wrong!
“In today’s world, meaningful differences between businesses are rarely rooted in price or product, but instead in customer experience.”
~ Jay Baer, "Youtility: Why Smart Marketing Is about Help Not Hype"
2nd Quarter — The "Life Changes" Phase
Life continues to move on, entering next quarter of the cycle where a change starts to occur in our clients lives. Perhaps they now have more kids than bedrooms, or the kids moved out to go to college, or our clients want to upgrade or downsize the home. No matter the change, the home that our clients bought is beginning to no longer hold the same utility it did when they first bought it…the home can start to make mistakes.
3rd Quarter – The Home "Frustration" Phase
Entering the 3rd stage, all the above factors start to multiply and our clients begin to recognize that they may need to make a change. They are sick of bumping into each other at the one sink in the en-suite bathroom, or scraping their frosty car windows because the garage is full of toys. For some clients this quarter moves quick, for others they are slow to react. No matter the client, the inconveniences eventually become too much and they shift into the fourth and final quarter.
“According to one survey, selling your home is more stressful than being fired from your job, breaking up with your spouse, or becoming a first time parent”
~ DailyMail, 2014
4th Quarter - The "Deciding to Sell" Phase
The final stage of the home ownership cycle is the time when our clients begin thinking about, and eventually deciding to put the home up for sale. According to most, this is the most stressful time of the cycle and likely the worst time to be making crucial last minute decisions about renovation and maintenance priorities. The ultimate decision to sell the home is generally a time of significant stress and pressure.
“Moving is the third most stressful event in life, behind death and divorce”
Statistics show us that most home sellers entering the fourth quarter don't know who they will use to list their home. In fact, in a survey by the National Association of REALTORS® they found that even though 88% of home buyers (at the time of home purchase) say they would use the same real estate agent agent next time, only 11% of people actually use the same agent for their next transaction. So that means 9 out of 10 home sellers will be looking for a new agent to list their home.
Mining Your Seller Gold Mine
So by re-focusing "lead generation" marketing efforts to "relationship marketing" — by connecting with homeowners, providing value and building client relationships with people before they enter the 4th quarter — you can virtually eliminate the competition or need for expensive lead generation tools to find home sellers.
Even better — by keeping in contact with your past clients and SOI after they purchase a home you can increase your repeat clients by up to 8X for their next home. Remember, the average person moves 11 times in their lifetime, so that's 22 transactions if you are their "go-to" real estate agent for life. Building your database and using a real estate CRM (client relationship management) can help keep your clients organized and help you keep in contact throughout the home ownership cycle.
A sustainable real estate business is one that is built in recognition of the home ownership cycle, and knowing how not to let your business fall victim to it. By employing the relationship marketing model you learned in this guide and by keeping in touch — providing value and educating your clients about the value of their home investment throughout the entire real estate cycle — you can help make their selling decision an easy one when they are ready to make their next real estate move.
Value is your secret weapon to sustainability.