There are websites out there collecting real estate inquiries and selling it back to us. These are leads they originally got from our own listings—so why should we handsomely pay websites like Zillow for our own leads?
I spoke to a Zillow representative recently about their conversion rates, which are between 1% and 5%. You’d need 20 leads just to convert one. Zillow sells on a lead-by-lead basis, and those 20 leads cost over $1,700 in my market for one conversion. Our average house sells for at least $150,000 and a commission rate of 3% would be $4,500. Am I going to pay $1,700 for a possible $4,500 commission? This is a decent return on investment if you don’t have any leads.
However, I prefer to go directly to the consumer for my leads. I have a strong database of clients from throughout the years; I nurture these relationships and stay current on marketing techniques. Through this, I naturally receive business instead of having to buy it.
Don’t forget the power and importance of referrals, especially those from a friend. Compared to referrals from those who know you, paid leads from sites like Zillow are relatively weak. And for me, the price of one conversion out of 20 is simply not worth it.
I don’t like paying for leads. However, if a Realtor I know sends me a referral, I want to pay them a decent fee. I believe 25% is a good amount for a decent referral. If it’s not a good enough referral, I will pay less. We don’t want to find ourselves paying to service a client.
What has worked for me is simply staying in touch with my clients, my friends, and my family. By nurturing my sphere of influence and turning potential customers into paying ones, I have no need to pay for a lead from websites like Zillow.
If you have any questions about real estate or would like some more information, give me a call at (405)-722-3232. I’d be happy to help you.