Editor’s note: There are dozens of online lead services in real estate and brokers and agents are still sorting out what’s what and which works best for their budget and needs. This three-part series examines the nuts and bolts of three major companies in the space, including HouseValues, Move Inc. (formerly Homestore) and HomeGain. (See Part 2 and Part 3.)
For Central Florida-based real estate agent Linda Harper, using an online lead generation service means not having to knock on doors or cold call prospective clients.
“This Realtor does no more cold calling, no FSBO calling and I make a really nice living,” said Harper, who’s been using HouseValues’ online marketing and lead services for well over a year.
Harper purchases 30-40 leads per month from Kirkland, Wash.-based HouseValues and estimates that she has about a 28 percent-30 percent closing rate. She said she’s built up enough business that now she shares her leads with two of her associates.
The Realtor couldn’t give an exact return on investment from her HouseValues leads, but said the money she’s put in has already come back. “My first deal was three months after I signed up and it paid for the whole year’s subscription,” she said.
With slowing market conditions in some parts of the country and the majority of consumers turning to the Internet as the starting point for real estate searches, brokers and agents are sorting out the best ways for them to connect with consumers online. There are dozens of online lead services in real estate, but this three-part series examines the nuts and bolts of three major companies.
Agents who sign up with HouseValues pay a flat monthly fee for a guaranteed number of consumer leads in an exclusive geographic area each month, said Matt Heinz, senior director of marketing for HouseValues. Pricing varies according to the area and the number of leads agents purchase, with the typical agent spending $400 to $500 per month, he said.
Agents customize their individual plans and the flat-fee structure enables them to project their costs, he said.
“The real meat of the system comes in the prospect management tools,” Heinz said. Each agent has access to Market Leader, a lead management tool that enables them to keep in touch with prospects who aren’t yet ready to buy or sell.
“We provide a whole series of e-mail follow-up campaigns customized to different consumers,” Heinz said. “We provide phone scripts to agents as well,” he said, and postcards and other offline follow-up systems.
The more prospective clients an agent stays in touch with, the more business that agent will do over time, he said.
HouseValues agents have access to tracking reports that will show them things like how many prospects are in their pipeline, how many are on a short-term cycle and how many are long-term. Agents can track which e-mails each customer has received, which e-mails were clicked on, and when consumers requested a listing showing, among other things.
Heinz said that many agents will enter all their prospects into the Market Leader system, not just those generated by HouseValues. “It’s an online system,” he said, “Each agent has their own password-protected database and they can basically manage it anywhere.”
HouseValues gives a one-on-one consultation with new agents signing up to discover what their long-term goals are and how much business they can handle and then customize a lead package based on those personal choices, according to Heinz.
“In many cases, we’ll work with agents to create a multiyear plan,” he said.
Consumers today expect a lot more information with certain information to be available for free, as well as fast responses to their questions, Heinz said. “We believe that real estate will always be a professionally assisted transaction…but at the same time consumers want someone who will let the get information on their own.”
The company offers more than 125 marketing seminars nationwide to its agents each year, Heinz said. The seminars aim to teach agents follow-up strategies, techniques for dealing with Internet-savvy consumers, and give agents the chance to share success stories with peers.
“We spend an entire day with agents sharing things we’ve learned about Internet consumers, and giving them a change to work with each other,” Heinz said. Also, the company typically has a guest speaker at each seminar.
Catherine Gortner, an agent with her own firm in San Jose, Calif. – Catherine Gortner Properties – started using HouseValues when she opened her own brokerage more than two years ago because she had no good source for leads.
Gortner liked the idea of supplying valuable information to consumers before they’re ready to buy or sell. “I like the idea of reaching people very early on,” she said.
The agent buys about 30 leads per month from HouseValues and said so far she’s pleased with the service. The lead source helps her identify people in her area who might be thinking of selling, which she said makes traditional farming a more manageable task.
Gortner said she’s able to convert 10 percent of the HouseValues leads that result in a transaction. Though she said, “I don’t actually look at conversion rates – I look at what I make and what I spend.” And with that in mind, it’s been worthwhile.
HouseValues also offers a lead-generation service for mortgage lenders, and in October 2005 launched HomePages.com, a national real estate site where consumers can get information on property listings and neighborhoods, among other things.
The company offers real estate lead services through HouseValues.com, a site that offers home valuation reports to consumers who sign up, and JustListed.com, a service that gives prospective buyers information on properties for sale.
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