The Secret Gold Mine of Home Seller Prospects
It's not a secret that property listings, and therefore home sellers, are the holy grail for real estate agents. Why? It's simple – when you have 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 smart real estate agents soon discover that having home listings generate more home listings, and so on and so on.
So, the burning question for agents isn't "why" do I want home listings, but rather "where" can I find home sellers?
Let's face it. Many real estate agents spend a lot of money on lead generation for home sellers such as flyer advertising, digital marketing, websites, SEO, online ads or social media promotion — with the ultimate goal of finding "active sellers" ready to list their home today. In reality, the problem is that every agent is competing with every other agent, brokerage and real estate website on the internet at the same time 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 only 1% - 4% (at best) 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.
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?! First the facts. You need to recognize the fact 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 insight that is often overlooked by agents and can provide a huge marketing advantage and higher "lead" conversion rates without spending anything on advertising or lead generation. Combine that obvious fact – that every home seller is a homeowner –with the statistical fact that 11% of people move each year and you have the basis of our home seller lead generation system.
Remember this – 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, so what if you could find and connect with homeowner's 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.
Understanding the Real Estate Cycle
1st Quarter – The Home "Honeymoon" Phase
Starting at the 12 o’clock position the words “buy/sell” is the point in time when our client just purchased their home with us (Yay)! The deal is now done and time moves on, clockwise around the cycle. Once our clients leave our services and they begin living in their brand-new home. For the first quarter portion of the Cycle, our clients usually love their home which is great. They are putting their own stamp on it with renovations, additions, upgrades, or whatever, but they usually like the home you sold them. 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 (from 3 o’clock to 6 o’clock) 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 (from the 6 o’clock to 9 o’clock position) 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 ensuite bathroom, or scraping their frosty window 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 Real Estate Cycle (9 o’clock to 12 o’clock) 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”
The Frenzy – Inside the Fourth Quarter
Unfortunately, for most of us, when our clients enter the fourth quarter and don’t know who they will use as an agent to list their home. Recall the fact that even though 88% of buyers say they would use us again, only 11% actually do! So what do our clients typically do?
Typically, at this point our clients usually get two or three real estate agents to come in and give them a value for their property. They find these real estate agents through a friend of a friend, park benches, ads on the radio, or other marketing material…these clients, our past clients, are now other people’s leads.
If we are lucky, perhaps they also call us, as we were the last agent who they bought from, but at that point is that most people do not have an in-depth relationship with [See Relationship Marketing Link]. Further complicating life for us is the problem, that too many real estate agents overprice as a motivating “carrot.” Many of us have seen this
type of strategy in practice and we know what comes next for the homeowner if they chose to work with this agent: a swift price reduction.
Clearly, if we run our business the as described above our business isn’t sustainable. Our clients become other agents leads and our deals fall away. A sustainable business is one that if built in recognition of the cycle and knowing how to not let your business fall victim to it. By employing the relationship marketing tactics you learned in the previous guide, you are able to educate your clients throughout the entire real estate cycle so that they can make their selling decision with confidence, having a pre-established range of values that their home will likely sell for. Knowledge for the homeowner is power!
Value is your secret weapon to sustainability.