This is not the cookie-cutter article giving you a mix of different superficial ways to generate real estate buyer leads and leaving you in doubt about which one to use first.
No, this one is different.
It will leave you with an approach to generating buyer leads depending on your individual situation.
The latter is done exemplary with a case study.
I know buyers still abound in today’s sellers’ market, and you may wonder why even bother thinking of buyer lead generation strategies when sellers are so scarce.
However, as I have pointed out in my article “The Housing Recession Lead Gen BluePrint, “you want to be prepared should the market switch to a buyers’ market.
What Are Buyer Leads in Real Estate, and What Types Are There?
I’ve already defined what real estate leads are in my article about the 5 types of real estate leads.
But to have a more specific answer regarding buyer leads, we can define them as follows:
Real estate buyer leads are people active in the real estate market.
It’s potential buyers showing various degrees of interest in your products and services for the most part and having various problem and need awareness levels.
Products in the latter case refer mostly to properties (e.g., residential homes, commercial properties, land, etc.) and your services to facilitating a real estate transaction as a realtor.
So, buyer leads are sales contacts that may or may not become your buyer clients.
The infographic I used in the mentioned article still applies here to explain the different buyer lead types.
I’ve also added it below, and it’s all about the different levels of need and problem awareness.
It’s as follows…
- Ice cold buyer leads (unaware of problem/need) thinking: “Buying a house hasn’t come to my mind yet.”
- Cold buyer leads (aware of problem/need) thinking: “I may want to buy.”
- Warm buyer leads (aware of solutions to their problem/need) wondering: “How and with whose help can I buy my future house?”
- Hot buyer leads (aware of products/services for their problem/need) thinking: “I want to work with you, but I am not completely sure yet.”
- Hottest buyer leads (most aware of products/services for their problem/need) thinking: “You did a great job finding the right property and negotiating the deal for me. I will work with you again and will refer you to my friends.”
Next, let’s define some goals for buyer lead generation.
Let’s Start with Your Buyer Lead Generation Goals
How about using a stretch goal for that and aiming for an annual gross commission income of $150,000?
You want to reach this goal within one year.
Why is this a stretch goal?
Because it’s above the average, a real estate agent usually makes annually, which is $48,340 (source).
But it’s also a stretch goal because you want to reach it within one year.
This time constraint significantly informs the approach to different real estate lead generation methods, and I will come to that later.
On the other hand, these goals may also not be worth pursuing because you already make that kind of commission income.
Nevertheless, you could use the case study in the next section as an example of how to triple the income for the average realtor.
I aim to provide you with transferrable principles, not fixed temporary tactics.
However, the stretch goal may also be pretty easy.
If you already had a monthly budget for paid lead generation of $2,000 and more, additional time, and a vast database available for “free” outbound lead generation.
Things would be much tougher, and the goal would be almost unattainable if you were just starting out and had a monthly budget of less than $100.
This is usually a period during which it may still be difficult to determine your business’s priorities.
It would lead to spending a lot of time on unnecessary things.
Although the goal may be unviable under time constraints (one year to reach it), it may be attainable within three or five years.
So, the same as in my article about generating seller leads applies to the definition of income goals for buyer leads.
You want to check your individual circumstances and conditions for that.
In the case study in the next section, let’s find out how you can better assess your circumstances and how they will affect the buyer lead generation methods available.
It will help you better assess whether goals are feasible or not.
A Case Study of Realtor Jenna Needing 30 Buyer Leads per Month
In my article “How to Get Real Estate Seller Leads without Begging, “I used an average real estate agent called Joe as a case study and assumed an average commission.
Let’s suppose Jenna, an average realtor, makes an average annual amount of $48,340 (again, the average income of real estate agents in 2021).
Her goal is to get this income to $150,000 within 12 months.
That’s the average income for realtors between four and ten years of experience (source).
Now, we need to assume a buyers’ market and that Jenna has to generate buyer leads.
How would this have to go calculation-wise?
First, the calculation looks similar to the one I did already in my article about seller lead generation.
She needs to aim for $12,500 monthly in gross commissions ($150,000 divided by 12).
Suppose again we will have a buyers’ market in 2023 and a decrease in home prices of 4%.
The 4% comes from Ivy Zelman, who predicted the 2008 housing crisis, by the way (source).
Since the average home price in 2022 is $348,000 (source), an applied 4% would result in $334,080.
Thus, per transaction, Jenna would make $8,352 per buyer client.
The average commission is roughly 5%, and we assume that 50% of that goes to her broker. So, the calculation would be $334,080 x 5% x 50%.
How many clients buying houses would she need to reach her goal of $150,000?
That number is 18 ($150,000 divided by $8,352).
In contrast to the similar calculation I did in my article about seller lead generation, we have one more month to run a working buyer lead gen campaign this time.
Well, we still need to consider 3 to 6 months to make the lead generation campaign work.
During this time, no or not enough buyer leads are generated.
But this time, no house needs an additional month to be show-ready because the focus is on buyer leads, not seller leads.
To stay pessimistic, we assume a runway of 6 months and thus 6 months to reach the commission income goal of $150,000 within 12 months.
In other words, the actual buyer lead generation will need to happen within six months, and it should lead to 18 transactions within this period.
That’s three transactions per month starting from month seven.
So, the buyer lead generation campaign has to aim for 3 serious buyers per month from the start.
The number of buyer leads you need for that significantly depends on Jenna’s conversational sales skills, which may give her an average closing rate of 27% (read my article on this topic here).
Staying pessimistic, let’s use 10%.
This percentage assumes she has already generated the buyer leads, and now it all depends on how well she persuades them in conversations.
Therefore, for 3 monthly transactions, Jenna has to generate 30 buyer leads monthly (3 transactions divided by a 10% closing rate).
How to Generate Qualified Buyer Leads for Jenna’s Goals?
The prior section only calculated the number of monthly buyer leads for her goal so far (30 buyer leads).
But how do we get there?
Before you can flex your conversational sales skill muscles over the phone, you need someone on the other side of the phone to talk to in the first place.
And many variables determine the number and quality of (buyer) leads you can generate.
A small selection and overview are the following:
- The type of buyer leads you target (how problem/need, solution/ product aware are they?) by specific marketing channels.
- The speed at which you can do campaign test iterations optimizing the campaign for ever higher conversion rates (also highly dependent on the monthly budget).
- Your copywriting skills and how well they disqualify/qualify them beforehand (tied into the previous point)
- Your follow-up system
One question we can answer at once is this: Can Jenna target buyer prospects that haven’t even thought of buying a house yet?
Yes, she can, but she won’t reach her goal.
So, the correct answer is no.
Looking at the infographic above, she needs at least warm and hot buyer leads, ideally ready to buy within a few weeks.
On a side note: If you want to dive deeper into the different types of real estate leads, you can read my article about this topic here.
So, by the type of buyer leads she has to target, she has to exclude many different lead gen methods rather suitable for the long game right from the start.
Consequently, Jenna would need to throw out of the window the usual tips you find when looking for buyer lead generation.
That’s basically all inbound marketing methods, such as:
- Creating and posting videos on YouTube, and other social media platforms
- Being helpful on social media and posting content there
Outbound marketing via PPC social media ads (Twitter, Facebook, Instagram, etc.) would also be suboptimal.
While running PPC ads on these platforms would be outbound, these are still platforms where most people are unaware of their needs.
In the past, this may still have been an option.
Still, due to the limited targeting options for real estate (thanks to the special ad category) on Facebook, chances are much higher that you will generate more cold than warm leads.
These buyer leads may be interested in buying something a year from now.
But for her individual goal, Jenna needs buyer leads who ideally want to buy right now.
So, which real estate lead gen methods and marketing channels are better suited for targeting warm-to-hot buyer prospects, and what real estate niche should she focus on?
These are generally the major four real estate lead gen methods available both for buyer and seller lead generation:
- Paid and “free” outbound (e.g., cold calling, direct mailing)
- Paid and “free” inbound (e.g., content marketing)
- Referral (e.g., partnering with non-competing businesses aligned with your niche)
- Database marketing (e.g., email marketing)
Suppose Jenna just started out as a realtor.
In that case, she only has one available suitable to target warm or hot buyer leads, and maybe three if she already did the work of having a database or email list and some partners that can give her referrals.
In the latter case, she could also use referral and database marketing.
Assuming she doesn’t have a good enough database or referral partners, these would be the paid and “free” outbound lead generation methods available and in alignment with her sporty commission income goal:
- PPC advertising on search engines (Google, Bing, Yahoo, etc.)
- Display ads via Zillow (e.g., Zillow Premier Agent)
Excluded outbound lead gen methods would be the following:
- Cold calling
- Native ads
- Push notification ads
- Radio ads
- Local TV commercials
- Direct mailing
- Text message prospecting
Even the above outbound lead gen methods are already a strongly limited selection for Jenna because they don’t include cold calling, native ads, push notification ads, radio ads, or local TV commercials.
Cold calling buyer prospects is different from calling owners of expireds or probate properties.
And indeed, most of the tools (see my collection of all tools here gathering prospect contact data) focus on property owners.
It’s easier for software to access property databases and gather owner information than is the case for potential buyers.
Maybe, but hopefully not; in a dystopian future with 24/7 mass surveillance, similar providers could also access a potential buyer database.
Some sources suggest cold-calling buyer prospects you get from Zillow as a member of the Premier Agent program.
But strictly speaking, that’s not cold calling.
It’s just using Zillow’s platform and their high amount of daily traffic for advertising and then “warm” calling the buyer prospects you get from the platform.
Don’t get me wrong, Jenna could theoretically cold call different types of homeowners and see if one of them would consider buying soon.
But chances would be high that most wouldn’t consider buying within the next few weeks but rather months or years.
And in a buyers’ market, the chances of coming across someone like that decrease even further.
This situation of a high problem and need unawareness would be similar if she would use one of the other excluded outbound lead gen methods.
Continuing with the case of cold calling.
If Jenna comes across an owner considering buying soon, it’s likely an investor.
And not all realtors know how to work with investor buyers without compromising a lot on their commissions.
On the other hand, many investors don’t know how to partner with realtors, so they, too, try to avoid working with them.
It would be a different story if Jenna were a realtor knowledgeable about the different real estate investing strategies, including creative ones.
Additionally, Jenna needs to do an exceptional job regarding her ad copy and messaging to convert more of the warm-to-hot buyer leads for her goal.
What has to be done?
The wants and needs of such buyer prospects have to be correctly addressed. And Jenna could make her life much easier if she focused on a particular real estate niche.
In a buyers’ market that usually occurs during a recession, as I discussed in this article, Jenna may want to focus on these niches…
- Mobile homes
- Mobile home parks
- Tiny houses
- Self-storage units
- (Smaller) residential homes/ units
- Senior housing (seniors still need to downsize, recession or no recession) (source)
- Small and large apartment buildings
- Coworking/shared office spaces
- Overseas retirement (for geo-arbitrage reasons)
- Apartments/townhouses in school district neighborhoods
- Rent to own and seller financing
- Short Sales/Preforeclosures
But that is a topic for several articles and will also be part of my future info product.
Without regressing deeper into the technicalities of such a campaign aligned with Jenna’s goals, let’s translate the 30 buyer leads she needs per month into the costs of the above leftover lead generation methods.
Below you will find the overview table based on the numbers of my article “Real Estate Lead Cost – Should Realtors Buy Leads?”.
|Lead Generation Method||Cost per Lead||Monthly Costs to Generate 30 buyer leads|
|PPC advertising with Bing Ads||$56.16||$1,684.80|
|Zillow Premier Agent (Display Advertising)||$20-$60||$1,800|
|PPC advertising with Google Search Ads||$64.07||$1,922.10|
So, when you look at the table, there is no more lead gen method left that is “free” or that Jenna could do via her sweat equity.
I also used the higher cost per lead when there was a price range for the calculation.
If Jenna doesn’t have a marketing budget of at least $1,687, her goal isn’t attainable within 12 months.
As in my article about seller lead generation, the same regarding the significant effect of conversational sales skills applies here, too.
You may remember that for the required number of monthly leads, I assumed a 10% closing rate.
The monthly budget requirements would drastically go down 20% or 30% and, of course, explode if it were at 5% or 3%.
You can generate the highest-quality leads in the world.
It wouldn’t help if you have a weak point in conversational sales skills or, as I like to call it, the art of persuasion in the spoken word.
However, the best conversational sales skill would also not help if the lead quality is bad.
I will end this article with some additional bonus questions and short answers often in real estate buyer lead generation.
How to Find Real Estate Buyers on Craigslist
On Craigslist, there are two approaches you can take to find or generate real estate buyer leads.
Before doing anything, you, of course, need an account.
The first approach is using it the same way as Zillow and posting your real estate property listings there.
This could have been a method Jenna could have used from the above case study.
I didn’t include it because the likelihood of generating the required leads she needed is low.
Again, she may have generated that number, but many real estate investors are looking for deals on Craigslist.
So, it would have been of a similar value to cold-calling rental property owners.
The second approach is using Craigslist to gather contact data from rental and investment property owners and then cold-call them.
The latter method is again more suitable for realtors familiar with real estate investing and creative financing.
So, they know how to partner with real estate investors.
Regarding Jenna’s case study, this approach wouldn’t have been suitable for the same reasons as the first approach and the reasons I discussed against cold calling for her 12-month goal.
How to Attract Out-of-Town Buyers
One moment, Chris was drinking his cappuccino, and just 5 minutes later, he suddenly threw a dart at the U.S. map on his wall.
Once he saw where the dart landed (Clements in Kansas, really?), he called the first moving company Google showed him in the search results and moved to this place in the middle of nowhere two days later.
Does this behavior sound realistic to you?
You bet it doesn’t.
Attracting out-of-town buyers is rather a long game.
Thus, you can use many “free” and paid inbound lead generation methods such as content marketing (e.g., writing a moving-to blog about a particular area, etc.).
So, it wouldn’t be a good idea to focus on these buyers for Jenna’s case study.
However, there are always all awareness levels present.
Thus, some of the out-of-town buyers may be warm to hot and could work with you as a buyers’ agent for the short term.
But competitors that invested in long-game marketing methods may have an advantage over you for most of these buyers.
Out-of-town buyers usually plan well ahead and look for information about your area long before looking for a realtor.
A realtor producing content about the region buyers are interested in would be their first choice.
What Are the Best Buyer Leads for Real Estate Agents?
From what I have discussed, what do you think are the best buyer leads for real estate agents?
In an ideal world, buyer prospects have the cash, pay full retail price, and do this today without even looking at the house.
But let’s bring this home into the real world.
The best buyer leads for real estate agents are buyer prospects, that are the hottest leads.
In the context of the levels of customer awareness, the hottest buyer leads are repeat clients referring you to their friends and family.
They are most aware of products and services and think, “You did a great job finding the right property and negotiating the deal for me.
I will work with you again and refer you to my friends.”
The next best buyer leads for real estate agents are hot buyer leads who are aware of services for their problem/needs and think, “I want to work with you, but I am not completely sure yet.”
These types of leads are also called bottom-of-funnel leads.
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.