Motivated Seller Leads: It’s Quality, Not Quantity
I was just looking at one of our competitor’s motivated seller lead offerings and I got to tell you I wasn’t all that impressed. Trust me, I’m not writing this to bad mouth this competitor as it seems that they offer a good overall service (albeit very expensive), the problem that I see is like many of our competitors they don’t screen out their leads for truly “motivated” sellers. They know that many novice investors are solely interested in the numbers of leads that they receive instead of the quality of leads and they create an online service to just generate high numbers of leads. The issue is that most sellers whether motivated by foreclosure, job relocation or just looking to trade up to a bigger house, is that they don’t understand how our business works. Many sellers (and even some members of the press) believe that a real estate investor should show up to a property with a briefcase, no a suitcase full of cash, close on the spot without inspecting the property, offer more than the seller was asking and even bring their own tea and lemon wedges. Professional real estate investors always seek a win-win situation for both seller and investor but we are not operating our businesses for the purposes of charity.
You see, the first group of home sellers that are motivated out of necessity will pretty much do anything to save their credit, save their job, their marriage, their family, etc. but the 2nd group is tantamount to a bunch of looky-loos at a yacht show. They aren’t really filling out our competitor’s online forms to request the services of a professional real estate investor; they’re just testing the waters to see “how the process works.” The answer is that for many of them the “process” doesn’t work. Maybe it’s because their house has been on the market for a week longer than they expected or they’re just very impatient and don’t understand that in their market it may take many months or even a year to sell their home but whatever the reason the bottom line is that they have turned to a real estate investing service that can’t help them because their idea of the value of their property, their time frame and their flexibility isn’t conducive to working with a professional real estate investor. And the problem with our competitor’s websites whose fees are very expensive but yet generate many leads is that more than 90% of these leads are a complete waste of time for the professional investor.
On the other hand (yeah, I’m going to brag a little) our system has been crafted over many years to weed out the truly motivated sellers from the sellers that are just going to waste an investor’s time. We’ve also created an online service whose conversion rates are literally unheard of on the Internet. Translation: the traffic that our website generates is highly targeted and our leads (albeit fewer in number than our high-priced competitor) typically doesn’t waste the professional investor’s precious time.
Probably not too many real estate investors think this way (at least not professional one’s anyway) but the MLS and Realtor.com are sources of potentially millions of leads. The problem with using these services for the professional investor is twofold; 1- a listing on an MLS in no way gives any indication of the motivation of a seller even if the agent indicates that the seller is motivated (every seller on the MLS is motivated!) and 2- the sheer number of properties on the MLS is way too much and too broad for a professional real estate investor to realistically consider. I’m not discounting that a broker can’t find an investor a good deal I’m just saying that usually brokers like these are hard to find and they don’t typically list the kinds of properties that would be attractive to a professional real estate investor on a Multiple Listing Service which is often geared towards retail buyers.
The same problems presented by the MLS for the investor are in a lot of ways the same problems created by services that generate many leads but don’t qualify the seller’s motivation so that the investor receiving those leads isn’t wasting their time chasing deals that will certainly never happen. What it all comes down to is that lead generation is a process first of QUALITY and then of QUANTITY. If you’re generating leads based upon quantity without first qualifying the quality of the seller’s motivation you’re really just wasting your money and your time.
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