To help our agents here at Relevate to be as efficiently successful as possible, we’ve scientifically studied all the ways residential real estate agents have ever tried to get clients. There are five ways of getting clients that our research revealed as just pretty terrible.
This article is about the five best ways to generate leads... FOUR ways that are pretty darn good, and ONE way that blows every other approach out of the water. So, if you want to know how to get clients in the most efficient ways, you are in the right place.
Before we start, I’ll tell you two things:
First, I have personally tried every one of the five worst and five best methods on my way to selling over 750 homes in my 17 year career, so I’m sharing real life experience here, and..
Second, my background before real estate was in operations research and process improvement, applying math and science to business. In fact I wrote two books on the subject. Our analysis of the worst five and best five ways to generate leads in real estate was not based on opinion, it was based on calculating the return-on-investment of each method … in other words, we compared the time and money agents must invest, versus the take-home income the agents receive, using each method.
Let’s jump in. The least awesome of the five BEST ways to generate leads in residential real estate is only for hard-core salespeople, but it can definitely generate business, and that is…
5. Cold Calling For-Sale-By-Owners and Expired Listings
This strategy isn’t for everyone because most people don’t enjoy cold calling. Especially calling people who either think they don’t need a real estate agent (in the case of FSBOs) or who have just recently been disappointed by an agent (in the case of expired listings).
However, these are sellers who definitely want to SELL. It’s easy to get these lists to call, there’s great software to help you make these calls, and there are tons of great strategies and scripts you can use to help you be effective at this strategy. You just have to be the type of person who can make yourself sit down and do it.
By the way, my favorite thing to say to expired listings when they say “My last agent only charged 4%,” is to say “Okay, but they didn’t sell your home, right, and If you could go back in time and agree to 6% and get your home sold in two weeks, would you do it?” and normally they say, “Well, yeah.” And then you can tell them: “Well, now you have that opportunity.” Go get ‘em.
Many agents have built their businesses by using the 4th best way to generate leads…
4. Hosting Open Houses
In some markets, open houses are very popular, whereas in other markets open houses are rare. They are fairly rare in our area. However, they can still be very effective if you choose the right ones (which means above-average price ranges and lots of traffic) and market and manage them using the best possible approaches.
To get these opportunities, I suggest you market yourself as the “Open House Agent” to other agents in your firm, and even make a brochure other agents can use to sell your Open House services to their sellers. You may even be able to do Open Houses for agents at OTHER firms, if the right agency paperwork is signed and permissions are granted.
Open houses certainly take a lot of time, and mostly on weekends. But there is no doubt they can be effective for agents to meet new buyers.
The 3rd best way to get clients in residential real estate is called …
Farming is also known as “Neighborhood Targeting”. This means choosing a neighborhood and mailing to and interacting with everyone in it regularly, showing your real estate ability and demonstrating specific knowledge of the neighborhood from your research. The idea is to work hard and consistently to get a few home sales in the neighborhood and position yourself as the obvious choice for any homeowner who is thinking about selling.
Meeting you in person will multiply the effectiveness of this strategy ten-fold, so I would absolutely add door knocking to this strategy. This involves going door to door with some small gift, like a nicely-printed recommended vendor list, and asking homeowners who else they recommend, and then mailing the new list to everyone you visit.
I also recommend making videos showing your knowledge and insights about the neighborhood’s sales history, and sending postcards with QR codes to residents so they can easily watch the video. You’ll also need a nice webpage for people to visit when they consider interviewing you to sell their home.
We’ve now arrived at the top TWO ways to generate leads in residential real estate. Our research revealed that the 2nd best method of getting clients is…
2. Social Media
Using social media for lead generation can work reasonably well. Level one is to post consistent and professional images of yourself and your real estate ability, mostly on Facebook and Instagram.
By FAR the most important posts will be testimonials from happy clients with PHOTOGRAPHS of those happy clients standing near your SOLD sign (whether they were the buyer or seller), because their photo shows FIRST that the testimonial is very real, and SECOND that the clients are 100% putting their personal stamp of approval on you.
Level two of the social media strategy is short videos and reels on YouTube, Facebook, and Instagram. These don’t take much effort and will really help people know you better. Level three is long-form videos on YouTube… These take another level of equipment and editing, but can be very effective.
One point to consider here… don’t feel you need to create ANY branding for yourself beyond your name and your beautiful face. It will cost you time and money, and will actually HURT more than HELP (regardless of what branding experts say). Check out this video or article about this point.
We have now arrived at what our research conclusively proved to be the most efficient lead generation method in residential real estate by a wide margin over every other method, including the second place method, social media. And the #1 method of generating leads is…
1. Working By Referral
This is the method for which we’ve developed extensive systems and support at Relevate Real Estate. Because when we compare the time and money agents need to invest in this method to the take-home income results, it just blows away every other method of lead generation for residential real estate agents.
Here is evidence of the number of referrals received by some of our agents from our internal scoreboard:
Laura, at the top of the scoreboard, has only been in real estate for two years, but she bought in completely to our referral system and did everything right. As you can see she received 119 referrals last year. Not bad right? You can also see Ashley received 81, Adrienne 77, and so on. The best thing about referrals is that once you get going, this sounds insane if you’re used to other lead generation methods, but it’s true, that two-thirds of them close. How’s that for efficiency?
A big point to understand is that there is a very big difference between doing business by “word of mouth”, which means “doing a great job and hoping people refer” versus “working by referral”, which means “doing a great job and teaching and reminding people to refer”. That’s a 5x difference in terms of the results you get.
Another key point is that you do not need to have done any real estate work for a person in order for that person to be willing to refer you. If you do this approach right, you’ll get just as many referrals from people you’ve never worked with as from people you have worked with.
That means you can work by referral as a brand new agent. There will be a lot of work to do to build your initial sphere of influence, but we teach agents how to do that all the time, and while it’s not easy, it’s definitely doable.
The steps to success working by referral are:
FIRST, qualify people to be on your referral team by explaining to them that you do business by referral and asking if they would be willing to refer you;
SECOND, send these referral team members marketing material each month showing your character and competence. At Relevate, we develop these campaigns for our agents because, why not? If they all need to send something really good each month, why not share the cost and effort of planning, designing, and printing? Of the twelve campaigns, two normally take the form of in-person events, and two are small gifts hand-delivered to the clients’ homes by either their agent or our team.
THIRD, call behind the marketing material to say “Hi” and ask for referrals, and
FOURTH, send hand-written personal notes after each conversation.
In addition, we support our agents to incorporate social media as an “icing on the cake” to stay in touch and remind people of how good they are at real estate and that they love referrals. However, it is surprising how many of our agents are super successful doing business by referral, and hardly ever post anything on social media.
Check out this super interesting analysis of data comparing working by referral to buying leads from Zillow. It shows a 5x difference in take-home income for the same effort. A huge difference!
Which Lead Generation Method is Best for YOUR Business?
So, between this article and the five WORST ways to get clients as a real estate agent, we’ve reviewed all ten lead generation methods commonly used by residential real estate agents.
Tell us in the comments, which of these methods have YOU tried, and which do you use regularly now? And did you have a better, worse, or different experience than our research revealed? Has this article got you thinking about stopping one method or starting another? I would love to hear your thoughts.
And meanwhile, if you are an agent in the Triangle Area of North Carolina area and you’d like to visit with us to learn more about Relevate Real Estate, click HERE to set up a time to talk with us.
See you soon!