There are many different real estate marketing and prospecting methods out there, and nowadays you will usually hear more about digital marketing methods rather than traditional ones such as door knocking.
Maybe you are on the fence and have heard about door knocking for real estate and now wonder if this method works in the first place.
So, does door knocking in real estate work?
As a whole, it works and you can expect a lead conversion rate or response rate of 20%, and a sales conversion rate of 2%.
Taking all costs involved into consideration, you will need to bank on a cost per acquisition of $15.65, and a cost per sale (getting the listing contract) of $156.55.
When you read the rest of this article, you will learn how I got to these numbers.
Additionally, I cover typical door knocking statistics, if it is considered soliciting, and what the best times are to carry out this traditional marketing and sales method.
What Is Door Knocking in Real Estate?
The method of any form of door knocking is quite simple, no matter if in real estate or in other industries.
The first step is to select a particular neighborhood that you want to focus on.
Then, take your car or whatever other transportation means you have and start going from house to house in this neighborhood.
Some do this with their cars, and some park it in the street of your choice and then walk the street.
Provided you don’t get into a booby trap or get attacked by a dog or something else and you reach the door, you then knock on the door of each house, and hopefully, a potential buyer or seller will open the door.
So, the first goal is to get someone to open the door in order for you to be able to reach the next goal, which is to start a conversation with the potential client and find out if she or he might be interested in your services.
Depending on how good you are in sales and how well you can handle rejections, it might take you to knock on many different doors until you convert a seller or buyer lead.
Which leads me to the next section.
Typical Real Estate Door Knocking Statistics and Conversion Rates
Now, you may ask yourself how many doors you will have to knock on until you convert a new real estate client.
Let’s take a look at some statistics and performance-based marketing data.
While I couldn’t find direct door knocking statistics specifically from the real estate industry, and some sources even state that there are no statistics and conversion rates at all, I could find several ones about door knocking in general and one from real estate based on anecdotal evidence.
Here they are:
- Roughly 2% of all door-to-door knocks will generate a sale (source).
- If you leave door hangers when no one answers, you can generate one call back for every 200 hangers (response rate of 0.5%).
- According to the anecdotal evidence from this ebook, you can achieve a 20% response rate.
- A bit less than 2% of door knocks convert to a new customer (source).
Summarizing the statistics, we can say that the sales conversion rate (meaning you get a listing) is 2%, and the response rate or door-knock to lead conversion rate is 20%.
If we take a look at my article about different real estate marketing prospecting conversion rates and make a comparison, door knocking looks quite good.
For example, cold calling has a 2% conversion rate, which means that door knocking can have a 10 times higher one with 20%.
Let’s also calculate for a second the cost per acquisition (CPA).
So, what are the costs involved?
It’s the cost of time, the print material you may leave at doors and/or hand out to the owners that open you and the gas for your car to get to the neighborhood.
Now, what are the costs of your time?
According to this great free ebook, it takes roughly between 2 and 3 hours to knock on 100 doors.
If the value of your time is $100, it costs you $200 to $300 and $250 on average to knock on 100 doors.
What about the print material?
Per door, you will need either a door hanger or a flyer you can hand out to the respective owner.
According to my article I mentioned above, we can assume printing costs per piece of print material of $0.55. For 100 doors, this would mean $55.
And lastly, what about the costs of gas?
On average, realtors drive 3,300 and 20,000 miles per year, making it an average of 11,650 (source).
Assuming a 6-day work week, this would mean 288 workdays (48 weeks x 6 workdays), and 40.5 miles per day.
Next, when we take a gas price of $0.20 per mile driven (source) we arrive at $8.10 gas costs per day.
The total costs of knocking on 100 doors can therefore be estimated at $250 (value of your time) plus $55 print materials plus $8.10 gas costs per day, which equals $313.
With a response rate or lead conversion rate of 20%, you can get 20 leads, which in turn represents a cost per acquisition (CPA) of $15.65.
This CPA number is better than Facebook Ads where the calculation in my article resulted in a CPA of $16.29.
Additionally, with a sales conversion rate of 2%, you can get 2 listings out of 100 doors, which in turn represents a cost per sale of $156.55.
So, traditional marketing/prospecting and sales methods still have their merits, but unfortunately, the downside is scalability.
Once you want to grow more than you can do door knocking, you will need to delegate and create a door knocking team.
And you will have a higher effort to scale this compared to better scalable marketing and prospecting methods.
Testing is also something almost impossible to do with door knocking, since so many different variables are involved.
Potential variables to test would be how you dress, the questions you ask and overall how you sell, specifically targeted vs not specifically targeted neighborhoods, and more.
But since door knocking is actually a combination of marketing and sales, it’s generally a challenge to test.
The same challenge with regards to testing exists in any sales situation.
Is Real Estate Door Knocking Considered Soliciting?
The next thing you may ask yourself is whether (real estate) door knocking is considered soliciting.
To get a disclosure out of the way first: I am not a lawyer, so you might want to consult with one first, and different laws may apply according to your state.
Real estate door knocking can be considered soliciting, but it is not illegal (source).
It is permitted provided you comply with the requirements of the local municipalities.
So, it depends on the municipality, and sometimes you may need a permit, which may be more expensive than a fine.
Additionally, it is protected by the constitution but unfortunately conflicts somewhat with privacy rights (source).
What Is the Best Time to Door Knock?
I think we can agree that you will have the best success when doing door knocking for real estate when most people are at home.
So, when you time it the right way you may improve the priorly-mentioned conversion rates if you do the door knocking at certain times.