All Forum Posts by: Carl Ohai

Its great your thinking ahead.. Sometimes you don't need to re invent the wheel.. There are CRMs out there that can take all the guess work out of it..  But again its always good to implement your ideas.

With CRM are you thinking about using? and does the brokerage you planning on going to provide it

This isnt specific to EXP, just being an agent.

Being an agent is running a small business. Its a full time job and you are a business owner. You just cant be a successful agent trying to do it part time. 87% of agents fail altogether. Its a tough enough business as it is without trying to serve 2 masters. I was a part time agent for a decade before going full time. Now if you just want to learn, and dont care about succeeding, have at it. Bit have realistic expectations about being part time

Very rarely will you get both sides of the deal no matter how you market your listing. But to answer your question I think your idea is a little late to the game unless you have some heavy-hitting angel investors who can push you past Zillow and the other top dogs and wait about 10 years for their return :)

If you have the listing why not. The more exposure the better.

@Carl Ohai At an 80/20 commission split those numbers above start to work.  I'm turned off by Zillow, Trulia and Realtor lead generation due to the bombarding of calls that clients can suddenly received if the lead is sent to multiple agents.  

I'm starting up PPC (google) and FB ads that feed right into my CRM.  MakingItRain - which ranks you first on Google - on average costs $15/lead.  That math works better as well.  And those leads are exclusively yours.

You could also target certain client lists (and get those lists for free sometimes) and great long term lead text/email campaigns.  FSBOs, expired/withdrawn listings, folks that are likely to move soon, renters... the list goes on.  And much of this you can do for free or pay pennies per lead to start pinging.  

(I'm a newer agent, for whatever my thoughts are worth!)

@Carl Ohai  Exactly.  Unless you are practicing in a high price market, the numbers don't work well at all.  As far as I know, ZTR don't base the cost per lead on the average sales price in the area.

Here in Plymouth where I live now, the average sales price over the last 6 months was just under $430,000.  Figure a 2.5% commission coming in to the buyer's agent.  After all the splits and franchise fees are paid, about 62% of that commission goes to the agent. 

Those numbers work out as $430,000 X 2.5% = $10,750 gross commission. 62% of that is $6,625.00. At 0.5% conversion, you're barely breaking even on the ad spend. And of course, from that remaining $6,625, you have to pay income taxes, health insurance, MLS dues, NAR dues, E&O insurance, marketing costs, car expenses, etc.

I'm about to relocate to mid-coast Maine.  Average sales prices there are about $250,000.  Running those same numbers, I'd net $6,250 X 62% = $3,875.  Those numbers REALLY don't work.

The lesson is this: if you really want to make money in real estate, find something flashy to sell to Realtors.  And be sure to follow the ZTR model - charge a lot, guarantee nothing.  When one agent drops you, there will be 1,000 lined up behind him.

@Carl Ohai I was involved in a JV with an extremely large and successful brokerage in Omaha a few years ago. they had done a national survey to try to get a handle on conversion rates, defined as closed sales divided by raw incoming leads.

While Zillow, Trulia and Realtor will not guarantee anything in terms of conversion, more than once I've heard statements like "if we got you 100 leads, do you think you could close 5 of them?"  That suggests a 5% conversion rate.

The results of my JV partner's survey said that the real conversion rates were between 0.5% and 1%. One close for every 100 to 200 raw leads.

A lot of this has to do with the evolution of the business over the last 20 years. When we bought our home in 1985, we put on some decent clothes, drove an hour to the broker's office, knocked on the door and said "Hi mister. We want to buy a house. Can you help us?" At which point, we sat down to look through a huge MLS book where all of the data lived. We were already committed to buying by the time we walked through the door.

Now, with all of the MLS easily accessible, people are literally riding on the train, drinking at the bar or sitting on the toilet while they're flipping through homes on Zillow. They click that "I want more information" button and *poof* - they're a lead that probably cost about $30.00. They could be years away from a buying decision.

Worse, most of the leadgen programs on ZTR provide sales leads to 3 or more agents, so it becomes a "speed to lead" function.  Several years ago, we were told to call leads back within a half hour.  Now, that goal is to contact them in seconds, not minutes.

I did get pitched by Realtor on a lead program that would send leads exclusively to me.  1,180 leads/year, guaranteed.  For the breathtaking price of $81,000.  That's not a typo - $81,000.  That could potentially be a reasonable investment if it weren't for the fact that buyers and sellers are probably also looking on Zillow, Trulia, C21, Coldwell Banker, RE/MAX, and a dozen other sites.

Competition definitely plays a major part in conversion rates.  I can't tell you how many times I'm working on a lead and hear "I just found out that Aunt Jane's son's second cousin is a Realtor.  I have to buy/sell through him."

According to my MLS, there are 99 real estate brokerages in my current town of Plymouth, MA. A mailing I got from Homelight said that there are 787 real estate agents in Plymouth.

I can't tell you how many times I'm working on a lead and hear "I just found out that Aunt Jane's son's second cousin is a Realtor. I have to buy/sell through him to keep peace in the family."  When 1.4% of the town's population hold a real estate license, that's not much of a surprise.

We're about to relocate to China, Maine and I'm looking forward to what is probably less than 1/20th the competition.