Superstar Lead Conversion Playbook & The 3 S’s of Lead Conversion

In the real estate industry, one of the most common topics of discussion and debate is lead conversion, particularly when dealing with leads generated online. Agents may vehemently defend this method or that piece of software. But many forget to return to the fundamentals of real estate lead conversion and to reexamine the systems they have in place for capturing and nurturing leads.

In Episode 30 of #OfficeHours, we examine the Superstar Lead Conversion Playbook and the 3 S’s of Lead Conversion. Catch what you missed from the episode below.

Now let’s take a look at the fundamentals of real estate lead conversion, including the 3 S’s. Once we have those basics covered, then it’s time to invest money into lead conversion tools and strategies.

Back to the Basics: The 3 S’s of Lead Conversion

Breaking down real estate lead conversion into three S’s is a simple way to remember a critical component of your sales funnel.

These are the 3 S’s of lead conversion:

  • Sources – Where buyers are coming from. To maximize sourcing, you need to know where your leads are coming from and establish a strong, authoritative presence in those places.
  • Speed – The importance of responding quickly to communications with leads. It’s not always about having the perfect script or even being the best real estate agent for the job.  Being first and fast is more important than being best.
  • System – The tools and processes that convert leads to sales, from initial contact through follow-up communications to the sale itself.

When it comes to real estate lead conversion, it’s critical to nail down these fundamentals first before investing money into other technology, software, or personnel to your business. Let’s break down each S and how they work together to generate and convert leads for your real estate business.

Sources

Lead Conversion
Source: Virgo Group via Wikimedia Commons

Understanding where your leads are coming from is critical to maximizing lead sourcing in general. It’s only detrimental to you—and helpful to your competition—if you are not established, or at least present, on the main platforms where leads are first able to connect with you.

Whether you’re a top agent in your area or a newly licensed realtor just starting out, about 50% of your leads on average will come from your friends, family, and sphere of influence. Always focus on the people who know you best. These are often some of the easiest leads to capture and nurture due to your proximity to or shared connection with the lead.

But where do the other 50% of leads come from? Picture for a moment what happens first when someone decides they want to buy or sell their home. More often than not, they pull out their smartphone or hop on their computer and start searching for listings and other information relevant to the homebuying or selling process.

So where are your leads going when they first embark on this real estate journey? And is your sales pipeline configured to effectively and efficiently siphon leads from those sources?

When it comes to real estate, agents tend to pull leads from four main sources. These include more general search and social platforms like Facebook and Google as well as real estate-specific sites like Realtor.com, Zillow, and Trulia.

4 Key Sources for Real Estate Leads

  • Facebook
  • Google
  • com
  • Zillow/Trulia

If you’re generating leads from these sources, the next step is to determine whether they are good leads and how you should follow up with them. Marketing analytics can help you determine which platforms work best for your particular business and community, and you can adjust your efforts to have a more established presence on whichever platforms generate you the most and strongest leads.

Speed

Mobile Phone Lead Conversion
Source: carinakrammer via Pixabay

Once you know where your leads are coming from, the next step is to ensure that you are responding to them with whiplash-inducing speed. As a general rule, if you get a lead, your goal should be to respond to almost any communication within 5 minutes. If not, you may miss your opening to jump on this lead before your competition does first.

Imagine the mindset of a potential homebuyer when they first enter the buying cycle. They may go to Realtor.com and click a listing, but when do they want to set an appointment to see that house? In many cases, right then and there, while they’re thinking about it. So if you don’t respond to that lead within 5 minutes, you could be missing a promising opportunity, and that customer may move on and funnel into the next (Read: faster) agent’s sales pipeline.

Consider this stat: If you respond to a lead in 30 minutes versus 5 minutes, you have a 100 times (100x) worse of a chance to convert that lead. Usually, you’ll lose the lead because another agent followed up with the lead first, or because the lead stopped the search or lost interest for whatever reason.

In short, if you respond within 5 mins, regardless of what exactly you say, you will have a significantly better chance of capturing that lead. Speed is one of the most important pieces of this lead conversion formula.

But with that speed must also come a sense of patience and understanding about where your lead is in the buying cycle. That lead could be several months from actually being ready to pull the trigger on what is a massive, life-changing decision. That doesn’t mean the lead isn’t of high quality—you just need to nurture that lead until they are ready to move forward.

That’s where the last S comes in.

System

Real Estate
Source: fernandozhiminaicela via Pixabay

Once you know where your sources are coming from and have addressed the speed with which you respond to them, it’s time to develop an internal system for collecting, organizing, nurturing, and eventually converting leads.

Without an effective system in place, your leads might be good, but you may not be responding fast enough. Or they might be a great lead, but they’re not ready just yet, and you lose track of the lead over time without a system for following up.

The main goal of this system is that when your lead is ready to pull the trigger—whether that’s in 5 minutes, 5 days, or 5 months—you need to be there. Your job is to be present and to be the authority and expert when that time comes. Your system shouldn’t push the natural progression of that timeline and should always nurture rather than force or pressure your leads too hard. But it should also have enough follow-up built into it that those leads don’t run cold.

The first step in building your system is to create a database that you can feed leads into so you can later follow up and convert those leads into sales. Rather than investing in complicated tools or software, you can much more quickly, easily, and inexpensively create a simple database using a Google spreadsheet or Microsoft Excel spreadsheet, should you already have it or similar software. This allows you to funnel the leads from your key sources into one organized, searchable, and sortable database.

The database is a critical component of your lead conversion system, and without it, you’ll be left without a reliable system to follow up and nurture leads.

Computer
Source: Vojtech Okenka via Pexels

This system will also help with speed. As real estate agents, it’s easy to get in the habit of telling clients, “I’m available 24/7.” Well, unless you’re a robot or the Terminator, that’s actually impossible. But, with the right system in place, you can determine when leads are shopping and browsing online.

If you know the most common times of the day and week when current and potential leads are most likely looking at houses, your system will enable you to respond within that critical 5-minute window. Bottom line: Unless you are bombarded with leads, you have time to respond within 5 minutes, whether through text, email, or any other channel.

Now, you may be considering investing in certain technology, software, or even personnel as you develop this system. But before spending any money, I encourage you to invest time and effort instead. Then you become the system of follow-up. Build a personalized, user-friendly database. Keep up with tracking and nurturing your leads. Analyze your marketing metrics, and continue to always optimize your system. Then, you can become a lead generation monster.

Eventually, this lead conversion system will work so smoothly that you are overwhelmed by the number of leads coming in. And that’s a good problem to have. Only then should you consider investing money into technology, software, or personnel that can increase in your lead conversion rate. Then, you can also become a lead conversion monster.

Marketing Funnel
Source: Jared Sexton via Flickr

But the fact is, most of us don’t have that problem—yet. We have a systematic problem. Where are the leads coming from, and how are we nurturing them over time? Until we can answer those questions and build an effective system in response, lead generation and lead conversation rates will stagnate.

The ultimate goal of this lead conversion system is to capture leads online and take them offline. After generating leads through search engines or an email, the next step is to schedule a viewing, grab a coffee, or otherwise meet face-to-face.

Your sources and speed, as governed by your internal lead conversion system, will ensure you get to the point where you can create that personal touch and actual relationship with leads. Because it ultimately is that personal touch and sense of relationship or partnership that contribute to a higher, healthier real estate lead conversion rate.

Working with (Serious) Buyers ONLY

Working with Buyers

Whew, it is exhausting just to think about working with all those buyers sometimes! But in reality, helping a buyer through the homebuying process can be one of the most rewarding parts of your work in the real estate business.

However, especially as a new real estate agent, you really need to understand the difference between serious buyers and what I call “shoppers.” Check out this clip from Superstars 2.0 to see what I really think about this subject:

Three Hacks to Pass Your Real Estate Exam

Real estate exam or testPassing your real estate exam is no easy task. Having prepared literally thousands of real estate agents for their exam over the years, I have learned a few things. In addition, I am the type of person that believes there is a method to everything. Anything can be “hacked,” you just need to figure it out. If you want a few easy hacks to help you pass your real estate exam the first time, this is your guide!

Real Estate Exam Hack #1: Understand the Purpose of the Test

I believe that an undeniable principle to excelling at anything that is new or unfamiliar to you is to view the task from 30,000 feet. Just like flying above the scene in an airplane, if you can step back and see the big picture it helps you understand why the test is there and therefore you can prepare with the right goal in mind.

The purpose of the real estate license exam is to protect the public. That’s right, the purpose of the test has nothing to do with you being a successful real estate agent. The real estate exam is not designed to test your sales skills, or your people skills, or even measure your ability to sell real estate! The real estate exam is designed as a minimum test of competency to make sure that folks who get a real estate license actually have a real estate background before interacting with the public.

Protecting the consumer

So, keeping this in mind, what do you think is going to be important on the test if the purpose is to protect the public? Easy:

  • Real estate laws and regulations
  • Consumer protection laws
  • Agency responsibilities (fiduciary duty)
  • State specific real estate regulations

Since the reason the real estate exam is there is to maintain minimum competency and protect the public from real estate agents who don’t know what is right or wrong, the real estate exam is going to have a lot of focus on these issues. So if you want to hack the real estate exam and pass it the first time, know your laws, know your consumer’s rights, understand your fiduciary duties, and know the state specific regulations where you live!

Also see: Top 5 Reasons People Fail the Real Estate Exam

Real Estate Exam Hack #2: Study Based on The Test OutlineStudying for exam

Since I got my start in Louisiana, I will use that as a baseline to help you understand the test outline and how it can help you. In most states, there is generally one testing company or administrator who is charged with preparing and administering the real estate exam in your state. For instance, as long as I can remember Louisiana has contracted with PSI Exams in order to administer the test. In other states, for instance, this company might be Thomson-Prometric or Applied Measurement Professionals (AMP) – it just depends on whom your state agency decides to contract with to administer the test.

Typically as a part of public policy and also their state contract, your testing service will issue a test outline to show exactly what is being asked on your license exam. Of course, this outline does not show you the exact questions but what it does is show you the topic areas and how much they will show up on your exam. See an example below from my home state of Louisiana:

PSI Test Bulletin

As you can see, the outline shows you every single topic area that you need to be prepared for in order to pass the test. In fact, PSI even tells you exactly how many questions you will receive on your exam from each area. Therefore, your studies should keep the test content distribution in mind. Let’s look at an example from the PSI Exam Outline:

Financing – Salesperson (6 Items)

Real Estate Contracts – (11 Items)

What this means is that if I am a test-taker, I will get exactly 6 questions about real estate finance and 11 questions on contracts. So which one should I study harder? Contracts, of course! There are almost double the amount of questions on the exam concerning real estate contracts than there are about real estate finance.

I am not saying to ignore some areas of the test, what I am saying is to hack the exam and use your study time efficiently you should study the most what you will be asked the most about! So, if you are the type of test-taker that really doesn’t like real estate finance – or math – keep in mind how much those sections actually will impact your score compared to others on the test outline.

The test outline is distributed for your benefit – so use it and know what to study and how much to study it!

Real Estate Exam Hack #3: Don’t Overload Yourself with Information Sources

It is the year 2016 as I right this. I am a millennial. I grew up with the internet, search engines, and have lived through the rise of things like Facebook and Youtube. (shameless plug to find me on Facebook and YouTube). It is because of the amazing amount of free information available to people that I know some students are pulling real estate exam prep information from all over the internet – and some of it is wrong. Like, really wrong.

Information overload and stress…Consider the Source

It is easy to become overwhelmed when you are in real estate school. For some people, they simply have not been in a school of any sort in quite some time and the amount of information alone can be exhausting. For others, they just may have no prior exposure to real estate and you will learn a lot of things in any real estate course (at least, you will in ours). However, if you turn to the internet and places like Amazon and buy every “real estate” prep book and aide you can find – it just might do more harm than good.

For instance, have you ever been told not to believe everything you read on the internet?? Well, don’t fall into that same trap when it comes to pulling information for your real estate exam! If you have chosen a school wisely like ours at Donaldson Educational Services, you should understand that everything has been prepared for you to give you the best chance to succeed. We have done everything we can to give you all the tools to pass your real estate exam the first time! Therefore, don’t overload yourself with information by buying a bunch of crappy real estate books from eBay or Amazon. Don’t go find some guy’s YouTube that you have no idea who he is or where he is from and try and learn from whatever he is selling. Stick to the plan, you chose a school like Donaldson for a reason. Remember, we are largely judged (fairly or unfairly) by the success rate of our graduates on the real estate exam so it is in our interest to give you the BEST materials ON THE PLANET to pass the exam.

Make sure you choose your exam prep program carefully, and try to trust in the materials you are provided and don’t overload yourself with too much. At the end of the day, the real estate exam is an organized animal and with the right preparation and guidance you can pass it the first time with no problem.

Use these three hacks as you prepare for your real estate exam, and I sincerely hope you pass the first time! Feel free to comment below with any questions or general comments – I will be around to connect with you for sure.

Good luck!

Why an Expert Level CMA is Critical to Real Estate Success

In this snapshot of our exclusive Superstars 2.0 real estate training program, instructor Chris Donaldson breaks down the importance and reasoning behind having an expert level CMA (competitive market analysis).

Due to the massive amount of real estate information available to the public, having a real estate expert break down the marketplace and explain pricing and value to clients is a critical real estate skill. Whether you are deciding where to price a seller’s home on the market, or you are working with a buyer and trying to decide what to offer, the real estate agent MUST have this essential skill in order to deliver first class service.

For more information on the Superstars 2.0 real estate training program – please visit https://donaldsoneducation.com/real-e…

For more from Chris, you can find him here:

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Housing is Strong – Here Are 3 Reasons to Be Optimistic

Housing is strong, and therefore I wanted to look for reasons why this is so in order to solidify my optimism. Although the market brings much uncertainty at times, looking at certain data points and demographic trends can lead even the biggest real estate skeptic to be optimistic about housing in 2016.

Here are Three Reasons I am Optimistic on Housing in 2016:

Optimistic about housing

1. Demographics Are In Our Favor

You have heard about it for years now, that the millennials are coming into the housing market and you better be ready! Largely, that has been true and is really beginning to come into form.

First, let’s remind you of who this generation is (The Millennials). A millennial is generally defined as someone born between the early 1980s and the somewhere in the mid 1990s depending on which research report you cite. This is the generation that grew up with things like Nintendo, programmable calculators, and of course the internet. The reason so many housing industry insiders should pay attention to Millennials is largely due to their size and their age.

The Millennials are Coming! The Millennials are coming!
The Millennials are Coming! The Millennials are coming!

The milliennial generation is a huge generation in terms of size, with estimates placing the total at around 83.1 million millennials in the United States in 2015. Therefore, if you were to compare that to the generation before (Generation X) you would see that there are a ton of homebuyers coming of age and this is something we should all watch closely. If you look at the numbers, Generation X and Generation Y are roughly about the same in terms of size. Therefore, if Generation X was leading the housing market the past 20 years then it will be another sizable generation of the same size (or larger) coming on board here for the next wave. In addition, millennials are just now coming of age to where buying homes and starting families is a natural priority. With the average millennial in their late 20s, we are going to see tons of movement in the coming years and this looks very promising for housing.

Oh, and 89% of millennials who did buy a home used a real estate agent to assist in the process. This is MORE than the previous generations, which bodes well for the real estate industry as a whole.

2. Unemployment Numbers are Improving

U.S. Unemployment Rate (Housing)

In the latest figures available on unemployment from February 2016, 242,000 jobs were added to the economy in February which is a solid number historically. In addition, this lands the national unemployment rate at 4.9% which is the lowest level since May 2008. That is some good news!

Now yes, while some economists and researchers will tell you the U.S. statistic on employment does not necessarily always tell the complete story – you should pay attention if you are a pro in the housing industry. Regardless of the “truth telling” from the government, one thing we can say is that these types of statistics help drive consumer sentiment and their feelings of the economy as a whole. Therefore, if the housing consumer feels good about the economy and their job prospects they are more likely to make that move on a new home with more comfort and optimism.

3. Mortgage Rates are Still Historically Low

United_States_Mortgage_Rate_History

You can look at the chart above, and see exactly what I mean. In fact, when I speak to members of the millennial generation I try and explain to them all the time why THIS is the time to borrow money – it is basically at an all time low! With today’s average mortgage rate hovering around 3.87%, that means you can essentially borrow money for about the rate of inflation (give or take). That is an excellent deal!

In the early 1980s when mortgage rates spiked to over 15%, money was extremely expensive. Let’s just do some simply math to show the difference in a typical Principal and Interest payment when the rates are at 4% and when they are at double that which is 8%.

Borrowing $200,000 at 4%: Monthly P+I payment $955

Borrowing $200,000 at 8%: Monthly P+I payment $1468

As you can see, the purchasing power and ability to qualify dramatically improves when rates are low. Furthermore, there does not seem to be any immediate threats to mortgage financing or that rates will suddenly spike. In fact, to show the system’s commitment to keeping rates low the average mortgage rate actually went down briefly after the Federal Reserve raised it’s discount rate. Therefore, don’t believe everything you hear in the media as housing and mortgages are as affordable now as ever before. That is some good news, and certainly bodes well for housing nationwide!

Disclaimer

This article is intended to point out the good news related to the housing sector, but certainly is not the whole story. Obviously real estate depends on a number of variables, this list is certainly not exhaustive. In addition, real estate is extremely local. What is happening in your home market may not necessarily reflect what is happening on the national stage. However, if you arm yourself with positive statistics and keep an eye on the good – you will generally have the more informed outlook and have the best opportunity to succeed. All statistics in this post were pulled from their appropriate sources. 

Three Phrases to Eliminate as a New Real Estate Agent

real estate ideaNew Real Estate Agent “Tanking Talk”

As a new real estate agent just starting out on the journey to success, one of the pitfalls far too many agents fall into is a common pattern of what I call “tanking talk.” Tanking talk is the type of phrasing, words, or simple expression that can TANK your real estate deal before you even get the chance to show your stuff. In other words, as a new real estate agent just starting out every prospect, lead, and client is precious – therefore you ought to put as much thought into what you will say to them as what you will do for them.

Three Phrases to Eliminate “Tanking Talk” as a new real estate agent

tanking talk

1. “I’m doing this part-time”

Well why don’t you just tell that potential client that you really aren’t a real estate professional, and that you are going to treat their real estate deal as a “part time” transaction. Real estate isn’t your mistress, this is your profession! Would you hire a doctor to operate on you that does detailed heart surgery part time? Eh, probably not. So why would you turn around and tell a potential client that you only work part time? The solution is don’t say it! Your goal is to ensure the other party knows that you are a real estate professional, that you care about what you do, and that you will put full time effort into providing them the highest in quality service.

2. “I am doing real estate on the side”

Wait – you are doing what on the side? Look, very similar to #1 above you don’t want to lead a potential client to believe that you don’t take yourself seriously or worse that you don’t take their real estate deal seriously. “On the side” makes me feel like you are simply working real estate deals with anyone who will let you in order to bring in money. And hey, since I am only doing it on the side it really doesn’t matter as much to me as whatever is my main occupation. You wouldn’t want to do business with someone who only “does it on the side,” so don’t go out there and portray the same thing to others! Even if it is true, and you don’t have the client base built to quit your other job, don’t TELL people that real estate is just something you do on the side. Real estate is your profession, make sure the world knows it.

3. “I’m New”

Think about the last time you had an issue with a product or a service, you called customer service, and the person on the other end had no idea what you were talking about or how to solve your problem. You press them, you get angry, and then you hear those precious little words “I’m new.” GET ME A MANAGER!

You don’t want to portray to others that you are new and don’t know what you are doing, so simply eliminate this phrase from your vocabulary and come up with something better. There is nothing inherently wrong with being a new real estate agent, but the reality is most people want someone with experience and knowledge. Therefore, rather than just tanking your talk up front by telling people you are brand new find another way to direct a conversation and just avoid bringing that topic up altogether if you can. Remember, there is nothing wrong with being new – you just don’t need to say so every time you meet with a potential client. Make people believe you are a real estate professional, because you are – and you work full time and are dedicated! Yep, that is the ticket to real estate success as a new real estate agent.

 

Superstars 2.0 Real Estate Training – Day 6

Superstars 2.0 Day 6 – The CFPB & You/Working With Buyers/Modern Real Estate Finance

On day 6 of our Superstars 2.0 training series, we are going to touch on a lot of important issues relating to the buyers side of a real estate transaction and also the influence of the CFPB and the overall management of real estate transactions.

The CFPB & You

Coincidentally enough (ok, maybe not a coincidence) in my home state of Louisiana, this is the “mandatory” 4 hour continuing education course that every real estate agent will need to take as a part of their total continuing education for the year. The reason is simple, the influence and change of how a real estate transaction is managed continues to evolve under the new regulation environment of the CFPB.

The Consumer Financial Protection Bureau, or ‘CFPB’ for short, was created as a result of the Dodd-Frank Wall Street Reform Act in 2010. This regulatory body has taken over many important aspects of regulating the financial sector, including areas of note for real estate agents such as RESPA and TILA. As a result, in late 2015 new rules were put into effect which dramatically changed the format and flow of a real estate transaction.

On day 6 of Superstars 2.0, we will begin by going over important information that every real estate pro should know regarding the real estate transaction and how it works. We will review the forms, the timing, and other important information that agents should know concerning their real estate transactions. Remember, one of the most important functions of the real estate agent is to manage the transaction – so we will ensure that you have the expertise to do so as a real estate expert for your client!

Working With Buyers

Of course, while we argue earlier in the course that seller leads and listings are most important in terms of growing your real estate business – certainly there is plenty of room for growth by working with buyers as well. In fact, considering 91% of real estate transactions in the US involve at least one real estate agent – surely many of these involve the buyer having their own real estate agent.

We will discuss the differences between working with a buyer and working with a seller, as well as how to manage the buyer’s side of a transaction. The world of “Caveat Emptor” (or buyer beware) are long gone, and there are many laws and practices which can assist real estate pros in working with a buyer to achieve their goal of home ownership – and not getting messed over in the process!

As we continue to build your toolkit as a real estate agent, understanding how to work with buyers efficiently and effectively will be very important to any real estate pro.

Modern Real Estate Finance

In the final piece of Day 6 of Superstars 2.0, we are going to touch on the modern world of financing a real estate transaction and update you on the latest trends in mortgage finance. The reason? Simple! If you are working with buyers in any way, ensuring that they can achieve the financing to get the deal done is essential to real estate transactions. So therefore, making sure you know the latest trends in the real estate financial business is crucial to becoming a real estate expert!

For more information on Superstars 2.0 real estate training, visit the main site by clicking HERE

To reserve your spot in Superstars 2.0, click HERE

Superstars 2.0 – Day 5

How to Utilize and Negotiate Contracts Like a Pro

Superstars 2.0 – Day 5

As we continue to build the tool chest for the modern real estate agent, on Day 5 of your Superstars 2.0 journey we will dive into the world of contracts and negotiation.

If you are a new agent especially, consider this your crash course on how to fill out a purchase agreement form properly and also learn important elements about its use. It is time to become a real estate Superstar, so we are going to make sure you have the best fundamental contract knowledge humanly possible! Line by line instructions on how to complete the form will be critical, in addition to strategies for delivery such as cloud delivery services and electronic signatures.

In addition, we will also work to build one of the most important skills of the real estate agent – negotiation! Negotiating deals is one of the primary reasons that a seller (or buyer) is going to bring an agent on board as their representative, therefore in order for you to reach your full potential as a real estate agent you will need to be an excellent negotiator.

On Day 5, we will teach you the skills to negotiate like a pro and also how to communicate with others “The Superstar Way.” Make no mistake, some methods are tried and true while others need to be scrapped and completely re-thought as the world (and people) have changed!

After making it through Day 5 of your Superstars 2.0 program, you should be primed to negotiate deals and facilitate contracts within a real estate transaction like a pro!