Realtor cost per conversion

[jamesww]

I have not done a ton of PPC, but find that my ROI is hugely better doing specific subdivisions rather than city real estate. Here in Houston the average home sale price is just shy of 200k and my personal average is just shy of 300k. I am willing to pay $25 dollars per web lead that has first name, last name, a good phone number, and good email. If the phone number is bad it is less than a third of that amount.

[sansonj]

I see a lot of paying per lead talk. I like it, but I want to make sure we are talking exactly that. That is the second most important number. I know on a real estate team you do not want to pay more than $25 per valid lead (meaning you actually spoke to them on the phone). This does not look into admin costs, phone costs, etc. Simply looks at home much did I spend to get a live valid person on the phone. Now going after PPC the question is how my PPC does it take to generate a valid phone call. Then how can I increase my odds to getting per of these. I know many listing minds are so quick to give out addresses online and everything out of either fear or lacking the knowledge of a buyer agent. I am assuming you are PPC for buyer leads. When you are after buyers you must leave certain cards in your back pocket. If you put them all ont he table then you are just hoping and your cost per valid client will shoot thru the roof.

Now the next cost to value will be looking into how much is costs to get what we call a valid flip. Were you able to do a prequal over the phone with them. You want to turn the phone call around. We see about 85% of our callers not even being remotely close to being able to buy a home. We want to filter them out really quickly. You can handle doing this- it might scare you, but screw up a little and then transition into your highest level of freedom.

Going into the next level. We have valid phone call + flip, so now we want a valid in person meeting, so wat is the cost per click for that. In this meeting we want a valid agreement. The average buyer takes upto 9 months to buy a home. We like to make sure we cover enough time to cover the fast buyer, the average buyer, and the slow one.

So now we have a valid phone call + flip + buyer agreement, so now want to look at the cost per click to get somebody in our car buying. I did not say shopping. I said what? We call this the T up. We will take 35000 homes and filter it down to 3 to 5 homes. We also run our comps prior to showing these homes too. We also do a home buying process/education that takes upward to 45 minutes. Yes, we have a valid client now, so we want to really educate them now. No, we do not really educate our prospects.

We now have a valid phone call + flip + buyer agreement + valid T up, so let's skip to the closing part. We use to have a 50% fall out because we would not have one of the three cores solid (assets + credit + job), but in this market we have narrowed our fall out to 7%, and our T up to escrow is very high. The people we lose commonly have family or friends guiding them in the background. Also, we demand to our best ability that all decision makes be present. no not all people on the loan, but all people who will impact the decision. We are not going more than once to show that house they love. They can do that with the inspector during the inspection period. Hey, we told them to make sure all decision makers were there when we went out buying. You do as you wish.

Now let's go thru my old numbers, because they had the high fall out. With a valid person on the phone 80% will flip. Let's say you get 100 valid people on the phone per month then 80 them will do the prequal.

We ask much more than this, but is this not key to know? Also their employment details?

BK: NONE, NONE
TAX LIENS: NONE
JUDGEMENTS: NONE
COLLECTIONS: NONE
OPEN TRADELINES: 6
LATES IN THE LAST 12 MONTHS: NONE
LAST TIME YOU PULLED CREDIT: FEW DAYS AGO
FICO: 784

So we had 80 people do this. Out of those 80 we are going to see 15% of them get approved, so 12. We call those PGs (Pre Greens) Like Green, Yellow, and Red.

12 PGs and 80% of those will show up, so now we are down to 9.6.

9.6 and nearly 97% will sign the buyer agreemt

9.312 buyer agreements and about 90% of them will go into escrow

8.3808 escrows, and then 50% of those will sadly fall out, so this means 4.1904 COEs for the month.

Now if you spent $25 per valid call this is $2500 ( that is high), and you sold 4.1904 homes where the listing agent gave you $3000 then you made 12,571.20, and you spent $2500 for your leads. Mind you if you have other overhead these numbers are not that simple. With doing only 4 deals a month you should not have much overhead.

Now the magic question is how much does it cost per click to get to a valid person on the phone.

It is late, so I hope this reads ok. UGH... I hope this is helpful for some too. I am not telling anybody how to run their business. I am just trying to expand on the idea where I keep reading in her cost per lead.

[sansonj]

Our average cost per lead runs between $8 and $11. We have moved our entire PPC program to Homegains BuyerLink program as it eliminates any competition. We bought the entire county so I don't have to worry about any other Realtors bidding up Google and Yahoo. Most Realtors don't know how to do PPC so they just bid up the price to see themselves on top. It drove me crazy when I did Google and Yahoo. With Homegain I went from an average of $2-$3 per click to .79 to .99 per click.

The real question is what is your cost per sale. Since we know it takes many leads to generate a sale, how many leads does it take to make a sale. For instance, my cost per sale is running around $240 right now. Great on some of our home sales and not so great on some of the foreclosures in this area that are only selling at $50k. Of course when we sell a home for our average price of $150k or more the $240 cost per sale is quite worth the cost!

This is a cool concept. I went and looked quickly into it. Their entire model basically sends people off of their site to the realtors private site.

[Mitch]

sansonj - It's all I do now. I've stopped all my other PPC campaigns. This month my cost per lead so far is down to $5.33 per lead. Pretty cool. I haven't had it this low in a long time, but my capture rate is over 17% since January 1.

[sansonj]

sansonj - It's all I do now. I've stopped all my other PPC campaigns. This month my cost per lead so far is down to $5.33 per lead. Pretty cool. I haven't had it this low in a long time, but my capture rate is over 17% since January 1.

I looked into it a little in Phoenix Metro, and they looked like they are taken up. It seems like a wise move, as they are agressive in getting people to their site.

[kirksmith111]

Does anyone of you here tried online appointment setters for your websites? Just signed up a 30-day free trial with live247support.com and I'm hoping to see results.

[Jesse in Portland]

Does anyone of you here tried online appointment setters for your websites? Just signed up a 30-day free trial with live247support.com and I'm hoping to see results.

Keep us updated on that. I would like to see how it goes.

[Maui]

Great post, Mitch. Not many people are able to back up their opinions with hard data, so I really enjoy your posts (results).