7 must-knows before you pay for online real estate leads

A little research will let you know which vendors are all talk and no closings

This post by Mike Cooper, managing broker at Winchester Real Estate Sales in Winchester, Va., was originally published on ActiveRain.

There is a lot of talk about the quality of leads on the Internet. Some camps believe that the Internet provides poor-quality leads, is expensive and should be avoided, and others believe that the Internet is a great source for high-quality leads. The truth is, they’re both right.

Online leads image via Shutterstock.
Online leads image via Shutterstock.

The Internet is like any social club, church group or sports league. There are people in all of those areas who are qualified buyers/sellers, and there are those who are not. I’m not a big pay-per-click person, but I do love advertising on the Internet.

Currently, more than 80 percent of my new customers come through the Web. My referrals and sphere of influence are picking up steam and are starting to challenge my Web statics, but the Internet has been a boon for our company.

What I would encourage every agent to do is:

  • Do a Google search on every company that offers you products over the Web that are supposed to bring you leads. Agents are not shy about flaming a company that is all talk and no closings. I don’t blame them. I do the same.
  • Ask friends who use the Web what they use. A successful agent who has had great results is more valuable than a slick online salesman.
  • Get the details. I no longer do any six-month commitments. If a company can’t produce a closed sale in less than six months, it isn’t worth the price of admission.
  • Avoid compaines that offer to put you in front of asset managers for a fee. Companies like Lamco, REO Pro Corp, REO Rainmaker, USHud and others (new ones are popping up all the time) are hawking their prowess, but their online reviews show that most agents spend a lot of money and get no sales. Don’t pay for listings. I’ve sold a lot of foreclosures. Every company that I’ve sold for found me. I didn’t even know who some of them were until we talked the first time.
  • Cut your losses quickly. If you don’t get a good lead in 30 days, cut your losses and move on. When I was younger I had one company that kept telling me it normally takes 90 days to get your first solid lead. Really? So, after I’ve spent a gazillion dollars for your pathetic service, I can recoup a few dollars? No thanks. I have other more profitable methods of marketing.
  • When you advertise online, be sure to answer your phone. I typically answer within five minutes of every online lead. Good leads almost always stick with me to a closing. They are also shocked that I answered the phone.
  • Pick and choose what leads you want to work with. I don’t run out into the mountains for the guy who wants the $29,000 home. It doesn’t pay. So, be wise in which ones you chose. Someone who is looking for that super-cheap house is probably super-cheap. If you can’t fuel your car to do a showing, it’s not worth your time responding to the lead. I always pull the listing to see what the commission split is before I head out to show a property. If it’s 2.5 percent on a low-priced house, I don’t go. If I can’t make the numbers work, I don’t invest my time and money. Don’t worry about that client — I can guarantee you that individual has probably sent notes to 20 other agents. One will respond.

Don’t be afraid to use the Web to build your business. It has changed the way I do business, and I’m glad I didn’t hide from it. A high percentage of my 2013 sales were Web-specific sales. I met some amazing people and it helped us have our second-best year since 2008.