Buying real estate leads and contact lists has been a staple of the industry for many years. It is something that should be done continuously, just as with all marketing. Sometimes leads and lists are more popular and more expensive. There’s a good chance we’ll see more demand for real estate leads and marketing lists as the market continues to heat up. They can be helpful. They can save time from compiling lists manually, and can help fill in and keep deal flow consistent while agents, brokers, and investors ramp up other mediums. However, there are also some serious pitfalls with buying leads.
Contacts vs. Closings
There is a huge difference between lists of contacts and leads that are ready to take immediate action (and qualify). Leads and lists are not guaranteed deals. There are a ton of variables that determine if this gap is bridged, or not. This includes your marketing pieces and your methods. Real estate pros must factor in a realistic conversion ratio before spending. This can vary widely based on the list, type, or source of leads.
Bogus Leads
If you’ve bought a reasonable amount of real estate leads and names already, you’ll have seen the likes of Bart Simpson and Batman or imjustkidding@fakelead.com. Some of these are blatant and your real estate lead provider may reimburse you for them. Others are hard to spot. They could be a result of consumers putting in fake contact info, as not to be contacted. It can also be lead sellers filling up lists when they are short. Keep track of these.
Junk Data
The last few years have proven to be tough times for real estate lead companies. Many real estate agent, investors, and mortgage firms have just found it easier and more profitable to generate their own leads online. Nonetheless, lists of contact information have been plagued with inaccuracy. People have changed email accounts, millions have moved, and home phone services have been traded for ever changing mobile numbers. A great percentage of data being sold is just junk. If you are going to go down the road of buying lists, invest in higher quality, and fresher ones.
Increased Competition
The U.S. real estate and mortgage industry has been flooded with new players since 2008. The better the market gets, the more new Realtors, investors, and mortgage brokers we’ll see. All too often, everyone hits up the same people. Everyone wants to market to the juiciest targets in the most profitable areas. This makes it very tough to convert even the best quality leads. You either have to be the first to reach them, or far better than everyone else. One of the best hacks here is to go where others aren’t. Consider alternative lists and filters. Perhaps those based on interests and major occasions. Note that you can also target these leads via Facebook ads by yourself.
Bad Timing
Bad timing is one of the biggest real estate lead generation killers. Mailing to a list on the wrong day, calling at the wrong time, or emailing at the wrong hour can all completely trash the potential of any list. Direct mail is a great example of this. If you mail too broad and too general, it is hard to get timing right. If you get the timing wrong on a 5,000 piece mailing, you might see the entire campaign bomb. There may be some residual branding benefits, but if you want live leads now, you have to be precise.
The All-In Approach
Too many real estate investors, agents, and other related businesses bet everything on a single type of marketing. If buying online real estate leads or direct mail has been predictable and highly profitable for a few months, it is tempting to dump your entire month’s marketing budget on another campaign. However, while one campaign might turn in crazy high conversion rates, the next could completely fail. If you’ve got all your eggs in one basket, you are in trouble. If you don’t have any more marketing leads coming in, you can’t get any more deals. It’s a steep and rapid descent from there. Keep a well-rounded marketing mix, and never put more than you can afford to lose into a single campaign.
The Law
The law is tough on marketers that illegally obtain consumer information and contact people. Unfortunately, some lead companies will sell any data to anyone in order to make a sale. Make sure you are only using data you should be, and for the purposes you are allowed to.
Held Hostage
Those that only rely on purchasing leads will always be held at ransom by what sellers want to charge. That’s not a safe business practice. All real estate professionals and businesses should simultaneously be building their own presence so that they can generate their own leads for less.
