In this monthly column, Anthony Askowitz explores a hypothetical real estate situation from both sides of the broker/agent dynamic.
A veteran agent has closed many successful sales through leads purchased from national services and plans to invest in them even further. Her broker considers these platforms to be active competitors to working agents like her, and her investment akin to arming an enemy — on multiple fronts. Is there a happy medium in this situation?
Let’s be honest — the traditional way of developing leads can be an enormous, time-consuming grind. When I started in real estate decades ago, we were trained to work our spheres, get out and network, and build our customer bases through referrals and word-of-mouth.
But that was before technology dramatically changed the landscape of our industry, making an agent’s online identity equally as important (if not more) as their physical presence. Networking and lead development became much more streamlined and efficient, saving hours and hours of driving, shaking hands and attending meetings.
A person can only be physically in one place at a time. With the use of online platforms and technology, however, one post can reach thousands of individuals all over the world with just a click of a key.
In recent years, I’ve enjoyed a good deal of success by directly purchasing qualified leads from some of these national real estate tech platforms. In most cases, these leads have resulted in vetted, high-quality, motivated buyers eager to purchase in my territory, making the investment extremely worthwhile. (Compared to the expenses of printing and mailing, the tech platforms are also cost-effective.)
Even if the leads did not generate purchases in every case, they would establish new relationships that further expanded my network — a small risk I have been willing to take.
To be fair, the nature of the services and the quality of leads do shift from time to time, but I still believe they are worth the added expense. The tradeoff allows me to focus much more of my time and energy on marketing and selling my properties.
I have tried to explain these benefits to my broker, and even encouraged him to purchase leads for our office which he could dole out or sell as he sees fit. I realize these programs may not work for everyone, but they do work for me — and I believe they represent the inevitable future of our business.
Not a fan! I think of these lead-peddling services in the same context as driving: On an individual level, it’s OK for me to drive my own car, but when everyone does it at the same time, it leads to traffic and climate change.
If we extend the analogy even further in this case, my car will stop suddenly, drive in random directions on its own, take me places I don’t want to go, enable my competitors and then become my competitor. (Who would buy this car?)
This is not an exaggeration. All agents should research the lead platforms and ask specific questions. Are the platforms licensed themselves, and competing for the same listing as agents? Are the same individual leads sold to multiple agents who must compete against each other to convert them? Are the leads sold multiple times to multiple agents? How many agents are receiving leads in any given area? What is the average rate of conversion of the leads?
By answering these questions, agents should be able to recognize if a platform is selling leads and marketing themselves as a parallel, supportive entity for the working Realtor — or aggressively competing against them on multiple levels. My opinion is the latter in almost every case.
Many of my agents enjoyed positive experiences with popular agent subscription lead programs when they first launched. Over time, however, the number and quality of leads deteriorated sharply, the business models changed without any communication, and these new offerings were exclusively offered to the larger teams and offices, which left smaller and newer teams fending off aggressive recruiting efforts.
These conflicts happened within my own brokerage; a headache I did not expect or appreciate from a platform that presents itself as noncompeting!
The much maligned (and now defunct) iBuyer program’s very existence demonstrated Big Tech’s obvious goal of replacing actual human real estate agents with bots, apps, logarithms and other elements they would control. Their obsession with our business will be a constant, nagging dynamic we will be dealing with for years to come.
While I agree that technology is a critical component of our business, I also believe it is a huge mistake for agents to rely upon “Bright Shiny Objects” and forego the human qualities that truly connect us: empathy, creativity, patience, and understanding.
By committing to the foundations of networking and sphere-building that our business has relied on since its inception, we can build the lifelong relationships that lead to actual, genuine referrals.
Online leads are a wonderful supplement. However, national statistics show that only 2 to 3 percent get converted to closed sales, and 30 percent of agents’ sales come from referrals.
Most online leads are buyers. A good agent can only work effectively with three to four buyers at any given time, while the same agent can manage six to eight listings at a time. An agent would have to be incubating 300 to 400 leads to capture those three to four buyer sales!
How to resolve
Just as the human element of homebuying and selling will never completely go away, neither will the extraordinary technology that helps agents to market, organize and communicate. The challenge for agents and brokers will be to find a balance between these two elements.
A good model for real estate offices to consider would be an “internet lead division” which selects a service to provide leads, vets the leads internally and has a team of agents willing to pay referral fees back to the service to pay for it all.
Assignment of the leads must be immediate and then followed up very quickly by the appointed agent with personal telephone calls inviting buyers to meet face-to-face over coffee. Again — a clear balance of technology and humanity.
With respect to the evolving agent/Big Tech dynamic, recent events have proven that market forces ultimately have the final say. In other words, what’s true about iBuying could also be true with lead marketing: If enough agents reject the poor and destructive nature of current programs, tech companies will have no choice but to improve them accordingly.
Anthony is the broker-owner of RE/MAX Advance Realty, with offices in Hollywood Beach, Davie, Miramar, North Miami, South Miami, Kendall, and the Florida Keys, and where he leads the activities of more than 190 agents. He is also a working agent who consistently sells more than 100 homes a year. For three consecutive years (2018, 2019, and 2020), Anthony has been honored as the “Managing Broker of the Year” by Miami Agent Magazine’s Agents’ Choice Awards. Follow Anthony on Instagram at https://www.instagram.com/anthonyaskowitz/
NOTE: Anthony is not an attorney and does not give legal advice. Please consult a licensed attorney regarding matters discussed in this column.