Real estate prospecting is one of the marketing tasks that most real estate professionals need to do on a regular basis.

Most of the time, it is synonymous with picking up the phone. But this is just one way of doing real estate prospecting.

There are many different ways you can do that, and each method has its advantages and disadvantages.

And while looking for different ways, at some point, you might ask yourself what the different conversion rates of these might be, so you can compare them a bit before you start.

For this reason, I wrote this article, where I provide you with 11 different real estate prospecting methods and their respective conversion rate estimations, and a nice table at the end with an overview of all of them.

So, please keep reading.

What is Real Estate Prospecting?

Real estate prospecting clearly falls into the category of outbound or, in other words, push marketing.

Push marketing happens when your focus is rather on actively putting your service in front of the customer.

Instead of the potential client being attracted to your services and comes to you, you come to the potential customer.

Its aim is usually to reduce the amount of time between a potential client finding your product or service and buying it.

That’s the reason why it is a bit more aggressive than pull or inbound marketing, where you rather wait for the potential client to come to you.

The client coming to you is done via inbound marketing methods, such as content marketing, for example,

Push marketing is often another word for traditional marketing.

Some examples are:

  • Direct sales to customers
  • Cold calls our outbound calls
  • Radio ads
  • TV ads
  • Mobile push notification ads
  • Email Ads
  • Direct Mail ads
  • PPC advertising
  • Native ads

So now that we know that real estate prospecting is actually part of push or outbound marketing, let’s see what it usually refers to.

It is rather associated with some sort of outbound sales communication by phone, text, email, or door knocking.

An example would be the real estate agent picking up the phone to start a conversation with potential customers.

These are often cold calls or “warm” calls.

Prospecting is quite prone to procrastination because the chances of being rejected are high.

No one likes to be rejected because it can cause negative feelings, such as humiliation, embarrassment, and more.

Nevertheless, if you look at the actual conversion rates of prospecting, you may leave some money on the table if you don’t do it.

And to do it similar to real estate content marketing, it needs to be done on a regular basis.

11 Types of Real Estate Prospecting and Their Conversion Rates

Now I will provide you with the different real estate prospecting types and their respective conversion rates.

At the end of my article, I will provide you with a nice overview table, where you find the different real estate prospecting types and their respective conversion rates.

 

1) Cold Calling

I already discussed this subject in this article of mine, and it is one of the oldest marketing methods in sales.

You basically call a potential customer with whom you never had a prior interaction before and who never showed interest in your services.

Usually, no call appointments are made prior to the call, and it is thus also part of interruption marketing.

Like many prospecting methods, it is not very popular since it can often come at a bad moment for receivers when the potential client is occupied or doesn’t need your service in the first place.

Doing cold calls can mean many rejections before getting good results.

So to be successful at it, one key is to be able to handle rejections and have a good amount of resilience.

What about the conversion rates for cold calling?

You can expect a conversion rate for meetings or appointments of 2%.

Calculating the Costs

To make one conversion, you will need to make 50 calls (1 divided by 2%).

You may be able to make 12 calls per hour, which translates into 4 hours.

Assuming an hourly rate of $21.60 per hour, this would mean total costs of $86.40 ($21.60 x 4) to convert one lead.

2) Calling Expired Listings

When calling expired listings, you call homeowners that didn’t manage to sell their homes with the help of a real estate agent or by other means.

But they still have the need to sell their home.

The tricky thing is that if they had their home listed with a real estate agent and you are one, you will need to convince them to do a better job this time.

So one of the important things on the phone with the owner will be to find out why it didn’t sell.

What about the conversion rates for calling expired listings?

The situation with conversion rates for calling expired listings is similar to cold calling because, basically, it is cold calling.

You can expect a conversion rate between 1% and 3% (source).

Calculating the Costs

We can assume the same costs as for cold calling.

 

3) Calling FSBOs

This prospecting method is actually also a type of cold calling.

It is similar to calling expired listings, but the difference is that the respective property owners are convinced that they don’t want to work with a real estate agent or other real estate professionals.

It’s usually because they prefer not to pay a commission.

So if you happen to be a real estate agent, the main goal in a conversion over a phone would be to convince them that using a real estate agent (you) will be beneficial.

What about the conversion rates for calling FSBOs?

Again, it’s basically cold calling, and you can expect a conversion rate for meetings or appointments of 2%.

Calculating the Costs

Here again, we can assume the same costs as for cold calling.

 

4) Real Estate Direct Mailing or Prospecting Letters

You can already find an in-depth article about real estate direct mailing on this page of mine.

A variation of direct mailing is sending out prospecting letters to your neighborhood.

In these letters, you could share a general comparative market analysis.

This is more like a content marketing approach in which you provide some educational value and, by doing that, can warm up the potential customers that you would call afterwards.

The traditional direct mailing approach is sending out postcards or letters with a more direct sales message (sales copy) in them to promote your real estate services.

What about the lead conversion rate for real estate direct mailing?

As already analyzed in this article, you can expect a lead conversion rate for direct mailing of 6.6%.

Calculating the Costs

I already calculated the costs per acquisition in my article mentioned above, which is $24.46.

5) Text Message Prospecting

While prospecting is mostly associated with making calls, it can also be done via text messages.

Phone numbers for that should be collected with white hat methods.

By the way, collecting phone numbers from FSBO listings can also be counted as white hat.

Text message prospecting can be done via social media, for example, on Twitter, checking for relevant hashtags and then engaging with potential customers.

In order to find the right hashtags you first need to know which type of potential customer you are targeting.

On Facebook and LinkedIn, it would be using direct messages.

Here, you can use different Facebook groups where the chances are high that you will find your potential target clients.

A way that is less of a push tactic and more pull is having a website chat, where you can engage with website visitors live.

Besides, prospecting text messaging should also be part of your omnichannel real estate follow up strategy, which I already covered in this article.

What about the lead conversion rate for text message prospecting?

According to this source, text message advertising has a conversion rate of 16%.

So we can confidently assume that the same or at least similar is true for text message prospecting.

Calculating the Costs

We can assume that you will be able to send a similar amount of text messages (also having a short conversation) than if you would do cold calls.

So it would be 12 text messages per hour.

To make one conversion, you will need to send 6.25 text messages (1 divided by 16%).

So you would need roughly half an hour.

Assuming an hourly rate of $21.60 per hour, this would mean total costs of $10.80 ($21.60 x 0.5) to convert one lead.

 

6) Radio Ads

Many consider radio a marketing channel of the past, but it’s still not completely old school.

It had its fair changes over the years and went from traditional FM programming to digital alternatives.

But nevertheless, listening to news and music is still alive.

For small businesses, radio can be a good option for advertising.

Before you advertise on radio, you want to know which radio stations target the kind of audience that your potential customers might be part of.

What about the lead conversion rate for radio ads?

You might be surprised, but for radio advertising, you can also expect a conversion rate of 16% (the same as for text message prospecting) according to this survey from 2014 (a bit outdated though).

Calculating the Costs

For this calculation, we would also need to factor in the production costs of a radio ad.

On fiverr, you can get radio ad production service on a budget for about $75 for 30, 60, or 90 second ads.

So we can assume $75 cost here.

To reach 1,000 listeners, you can expect to pay about $20.

To convert one lead, you would need to reach 6.25 listeners (1 divided by 16% conversion rate).

If 1,000 listeners cost $20, then 6.26 listeners cost $0.12.

So the cost per acquisition would be $0.12 plus the $75 production cost, which is $75.12.

Of course, the more leads you generate, the lower the cost will be per acquisition since the production cost is fixed.

But bear in mind that radio stations don’t sell just a radio ad for $20 to reach 1,000 listeners.

They usually sell packages that cost fixed prices from $500 to $8,000 (e.g., New York City) (source).

 

7) Push Notification Ads

You might have already received them too on your smartphone.

When you receive them, they look like normal SMS text messages or alerts.

So push notifications are messages that pop up on your mobile device and can be sent by advertisers at any time.

As an advertiser, you can do many things with them, such as getting users to take action, sending a coupon code, letting them know about an event, and more.

Here is a shortlist of push notification advertising platforms:

What about the lead conversion rate for push notification ads?

With broadly send push notification, you can expect a conversion rate of 15%.

Highly segmented push notification campaigns can even reach a conversion rate of 54% (source).

But I would stay with the lower end (15%) because in the context of push notifications, a conversion can mean many things.

It could be the installation of an app, playing a game, or making an in-app purchase.

Calculating the Costs

The costs of push notification ads start at $0.1 per click (source).

To convert one lead, you would need to buy roughly 7 clicks. This would mean a cost per acquisition of just $0.7.

 

9) Email Advertising

Email advertising is a permission-based marketing method.

Because of different existing regulations, recipients need to consent to receive promotional messages from a brand or business.

This is usually done by giving potential recipients the option to opt-in.

In my article about email marketing software, I discussed different statistics of email marketing and how you can find the best software for that.

What about the lead conversion rate for email advertising?

You can expect a 1% conversion rate for newsletters and a 2.7% conversion rate for follow-ups.

Calculating the Costs

To calculate the cost per acquisition for email advertising, we first need the average optin rate for email, which is 3% (source).

If we take the average of all the mentioned paid traffic methods, which is $2.37 per click with Google Search ads (real estate), $1.81 per click with Facebook ads (real estate), $0.02 per listener with Radio ads, and $0.1 per click with push notification ads, we get an average cost per website visitor of $1.05.

To generate one subscriber, you would need 33 website visitors (traffic).

If the traffic costs on average $1.05, one subscriber would cost $34.65.

Since the above-mentioned email advertising conversion rate is between 1% and 2.7% (1.85% on average), you would need 54 subscribers to convert one subscriber.

The cost per acquisition would thus be $1,871 (54 x $34.65).

This number seems pretty high to me, but it also shows how essential it is to get the costs per click down with good ad copy and an overall highly optimized PPC campaign over time on the traffic side and also a well-optimized email marketing campaign with a good real estate lead magnet.

Bear in mind that this is calculated based on averages and paid traffic methods.

10) PPC Advertising

I have already mentioned PPC Advertising in various articles, such as this article about Facebook ads and this one about Google Search Ads.

Pay per click advertising is a type of internet marketing, where you as an advertiser pay a certain fee each time your ad is clicked.

You basically buy your traffic to your website.

On Google, the focus is rather on bidding for different keywords for which your ad will be displayed, while on Facebook, it’s mainly a pre-defined audience that gets your ad shown.

What about the lead conversion rate for PPC advertising?

On Google Search Ads, you can expect an average conversion rate of 3.4% (source), and on Facebook Ads, an average conversion rate of 10.68% (source) with regards to the real estate industry.

Calculating the Costs

Within the real estate industry, you pay on average $2.37 per click on Google Search Ads, and $1.81 per click on Facebook Ads.

From Google Search Ads, you would need 29 clicks (1 divided by 3.4%) to convert one visitor to a lead.

The cost per acquisition would be $69.7 (29 x $2.37).

From Facebook Ads, you would need 9 clicks (1 divided by 10.68%) to convert one visitor to a lead.

The cost per acquisition would be $16.29 (9 x $1.81).

 

11) Native Ads

Native ads are similar to Google’s display ads, but the difference is that they are a form of advertising that adapts to the design, function, and form of the website or platform they are displayed on.

From there comes the name “native” because they are displayed in a way that respects the rest of the content appearing on a website.

You may also want to read my two in-depth articles on native ads for real estate here and here.

What about the lead conversion rate for native ads?

You can expect a conversion of between 0.3% and 22%, so 11.15% on average (source).

Calculating the Costs

Native Ads costs per click range between $0.01 and $0.03 per click, so, on average, we are talking about $0.02 per click.

Let’s assume the worst case with an untested and non-optimized campaign and thus a conversion rate of 0.3%.

With this conversion rate, you would need 333 clicks to convert one visitor into a lead.

Acquisition costs would be then $6.60.

real estate prospecting conversion rates

All Real Estate Prospecting Conversion Rates at a Glance

In the table below, you will find all the mentioned real estate prospecting conversion rates at a glance.

I also complemented them with an additional metric, the cost per acquisition, since the conversion rate alone is a good way to evaluate a marketing method at first glance, but not the best when it comes to cost.

For this estimation, I used the average costs for each prospecting method.

Bear in mind that cost per acquisition doesn’t tell you anything about the quality of leads you might get.

So even if a low CPA might seem very appealing at first glance, it’s also not the perfect metric but still better than the conversion rate to compare the different methods.

 

Real Estate Prospecting MethodConversion RatesCPA
Cold Calling2%$86.40
Calling Expired Listings1-3%$86.40
Calling FSBOs1-3%$86.40
Real Estate Direct Mailing6.6%$24.46
Text Message Prospecting16%$10.80
Radio Ads16%$0.12/ $75.12
Push Notification Ads15%$0.70
Email Advertising1-2.7%$1871
PPC Advertising Google Search Ads3.4%$69.70
PPC Advertising Facebook Ads10.68%$16.29
Native Ads0.3-22%$6.60