The Truth About Improving Lead Conversion Rates

Most real estate agents don't get it! That's probably a socially incorrect statement, but facts are facts. If you look at some very believable statistics from very reliable sources, we see that sales and success in real estate, like every other business, is a numbers game if you do certain things correctly and consistently.

That said, we all know that only a small percentage of people in the real estate industry make a great living. Why? It's simple. They either don't do the work, don't know what to do, or they don't invest in the tools and services they need to be successful. In this post, I want to share some very real statistics and ideas that should help to take the mystery out of lead conversion rates and some things that may help you to improve yours. If you do, the payoff is very real!

Buyers and Sellers On The Internet

Let's start with some statistics to put this all in perspective. NAR's 2013 Profile of Home Buyers and Sellers includes survey responses from 8,767 people who purchased a home between July 2012 and June 2013. The seller information in the report is from those buyers who also sold a home.

For those who purchased a home during that time period, the highest share ever — 92 percent — used the Internet to search for a home, up from 90 percent in last year's survey and 71 percent in 2003.

How Consumers Find Agents

OK, so we know that 92% of buyers use the Internet to search. The NAR report also tells us that two-thirds of recent buyers only interviewed one agent before they found the agent they worked with. 42% of buyers found their agent through a referral from a friend or family member and 12% used an agent they had used before. 39% of sellers found their agent through a family or friend referral, while 25% used an agent they had worked with previously. But here are the important numbers. 9% of buyers and 4% of sellers find their agent online!

Compare To Conversion Rate

I found these numbers to be really interesting for a couple of reasons. Research shows that 35-50% of sales go to the vendor that responds first. (Source: InsideSales.com). If we take the average of those numbers, it equals 42.5%. Since we know that 9% of buyers find their agents on the Internet, to me, that means you have a chance equal to 42.5% of 9% to convert an online lead. This equals nearly a 4% conversion rate. 2% is often used as a reasonable conversion rate for people that really work online leads. When I look at these numbers, they tell me, that if I am really good at what I do, those conversion rates can go way higher than 2%. If you look at what that means in terms of revenue, it is pretty exciting. I showed these numbers in an earlier post to demonstrate the point but I think it is worth taking another look.