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Excerpts from "How to Succeed on The Internet"
Real Estate on the Internet
The Internet will eventually be the cornerstone of the real estate industry. But, until a majority of the population has a true high speed Internet connection and the Internet itself has excess capacity, the full potential in the real estate industry will not be realized. In the meantime the Internet will be involved in 40% to 60% of the residential activity depending on the market location.
Homebuyers represent more than 90% of the Internet activity today. While home sellers typically contact a local Realtor via sources other than the Internet, they are concerned that their home listing be placed on the Web. For Realtors who are Buyers Agents or who practice dual agency the Internet offers a serious potential for acquiring new prospects. Already today there are Realtors who are focused exclusively on the Internet as a source of new business. Individual Realtors working without assistants are achieving annual transaction volumes of more than four million dollars and a limited number are surpassing the six million mark. Realtors working with a support team are achieving volumes of five to ten million dollars. Single location Broker/owners are achieving Internet sales volumes of between ten and twenty million dollars.
While there is a tremendous amount of activity from the Internet the majority of the leads are being captured by a very small number of Realtors. This is because these Realtors have managed to dominate their market on the Internet. They are attracting hundreds of homebuyers to their web sites every month and are successfully converting these web site visitors into prospects.
The successful Realtors have a highly productive web site, volume visitor traffic and an effective sales methodology. This package expressly addresses the unique aspects of the Internet and the needs of the home buyer on the Net.
The Web Site
A web site can be used in two different ways on the Internet. It can be a tool not unlike any other piece of sales literature or it can be an advertisement used to generate new business. The vast majority of sites are just sales literature (be it intentional or not). By this we mean that a Realtor gives his clients his web address and also places the web site address in his media advertising, signs and business stationary. In this instance the web site serves as a tool in the relationship between the Realtor and his/her clients. These web sites do not produce revenue for the Realtors but they assist in the selling process. Something on the order of 95% of all real estate web sites fit this category.
About 5% of real estate web sites are producing a regular flow of new homebuyer leads for Realtors. Within this group there are a large number of Realtors who are dominating their Internet market and realizing a multi-million dollar annual volume from the Net. The essence of this is that their web site is producing several million dollars in sales leads that they would not otherwise have.
If there are 20 Realtors with web sites in your office it is likely that only one of them is realizing significant revenue via his web site. Why is this? What is the difference between these web sites, these Realtors?
Well, if you consider the web site as just a piece of sales literature it means that you are only giving the address to prospects that find you through your existing advertising. In this case you are not generating any new prospects with the web site and therefore the web site is not producing revenue for you.
If you are using the web site as an advertisement you are generating new prospects by placing the web site where home buyers will find it if they are searching the Internet for a Realtor in your town. Now you are developing new business from the web site and will produce income from the site.
The Web Site as an Advertisement
It is easy to perceive how one uses a web site as sales literature but how does one use the site as an advertisement? The answer is simple but the execution is a challenge. To get exposure on the Internet the web site needs links (or advertisements) where home buyers will find them. This is on the search engines and in real estate directories that have volume visitor traffic. Homebuyers go on the net and do searches for information on real estate in the city to which they plan on moving. They may use a number of different search phrases to do this. Someone seeking information on Phoenix real estate might use search phrases such as "real estate in phoenix", "phoenix real estate", "phoenix homes", "phoenix realtors" and so on. If your web site appears amongst the first listings in the search results you will get visitor traffic and subsequent leads.
Now, how does one place their web site on the first page of the search results? You can use a paid placement service such as Overture (see search engine page) or you can have the pages of the web site optimized for the search engines (see search engine page). You can also pay for listings in the real estate directories (but be sure the directory appears on the first page of the search results..see page about the directories).
What volume of visitor traffic do you need to realize a regular flow of leads? On our real estate system our clients average one lead per 30 visitors. So to get ten leads a month you would want 300 visitors. A greater volume of traffic will produce a proportionately greater number of leads (see page about Internet leads). The inquiries you receive will vary from tire kickers to solid prospects with about one in five being a real sales lead.
Once you have developed a volume of visitor traffic you will be considering a number options. First is the choice of expanding the volume of visitors. This can be accomplished with more pages on your web site and with additional web sites. Each page/site is targeted for different search phrases or search engines. Since each search engine uses a unique algorithm in ranking pages, a page that places well with one engine will not necessarily earn high rankings with the other engines. Another choice you will have is to refine your site to address specific market segments such as luxury homes or vacation homes. Depending on your specialties you might focus on first time homebuyers or corporate relocations. It is also possible to pre-screen your prospects by utilizing questions in your inquiry form and by including qualifying statements at the beginning of the form.
We have clients who have three, four and five different web sites. Each site is targeted for a different city within their market and/or for different market segments. Our most aggressive clients have achieved visitor traffic levels of 3,000 to 5,000 people each month (this in active markets).
As you achieve volume visitor traffic and develop experience with Internet homebuyer leads you quickly realize that you can only handle so many leads each month. Some Realtors choose to just respond to the most promising leads and throw away the rest. The more successful Realtors see a value in every lead and they develop a system to handle the volume. In many cases they refer the less desirable leads to sales associates and thereby realize a referral income.
The Internet Specialist
There is a very small but growing group of Realtors that have become specialists on the Internet. These Realtors or, in some cases, broker/owners, have developed a highly successful business model for operating on the web. With a concept that utilizes the computer and technology as the core of the methodology they are achieving an operating cost profile that is much more profitable than traditional methods.
Their advertising cost ratio is half of the traditional model. The cost for office operations and payroll is also lower. The time spent per lead and per transaction is considerably less than in the traditional office. All of this accomplished by maximizing the use of the computer, advanced technologies and the Internet.
Business management software, contact management programs, databases, digital cameras along with wireless communications all contribute to the efficiency. Automated programs maintain contact with prospects via e-mail. A program at the MLS automatically sends prospects new listings that match their criteria while also notifying the Realtor of the communication. The Realtor is able to send prospects digital slide shows and virtual tours of homes. In some cases Realtors are sending their prospects virtual tours of neighborhoods and of their city.
Utilizing all these tools Realtors are minimizing the time they actually spend with their home buyers. In many cases prospects are making buy decisions in a matter of hours after having viewed home listing information, photos and video tours on line.
These Internet Specialists are the 21st Century Realtors who are riding on a wave of technological advances that are defining the future.
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