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For decades, the standard referral fee of a seller who is ready to list their property has been 25 percent. Some relocation companies have charged more than that, but they’re generally coordinating the move and providing other services. So why would any competent agent pay a portal up to 40 percent of their commission when there are plenty of cheaper options for generating great leads?
Before you fork over another 40 percent of your next commission, here’s a list of proven ways to generate high-quality leads at a fraction of the cost that Realtor.com, Trulia, and Zillow charge you for their leads.
Zero cost strategies
1. Generate listings for free from your own database with Likely.AI
Likely.AI is currently offering agents a FREE Database Refresh Report that allows you to identify the contacts in your database who are most likely to transact in the next 90 to 180 days. The Database Refresh Report provides:
- The percentage of contacts in your database who have valid contact information
- How many of your contacts listed or sold a property in the last nine months
- The percentage of your contacts who are predicted to transact during the next 90 to 180 days along with their contact information
U.S. homeowners currently move on average about once every 10 years. If you have 2,500 valid contacts in your database, that means about 250 will move in the next year. Likely.Ai identifies who that 10 percent is most likely to be.
If 30 percent of their predictions are correct, that’s 75 potential listings waiting for you in your current contact database at zero cost to you.
2. Capitalize on your past client database
According to the most recent NAR Profile of Buyers and Sellers, 89 percent of the buyers and sellers would rehire their agent again. Sadly, only 26 percent actually do because their agents fail to stay in touch with them. If you haven’t done so already, immediately compile a list of all your past clients and their contact information.
Next, use the following script to get back in contact.
Hi John — It’s Sally Agent. It’s been way too long since we’ve caught up in person. I would love to buy you a cup of coffee (tea, beer, margarita, etc.) Does Friday morning or Saturday afternoon work for you?
Once you reconnect with them, make sure that you continue to stay in contact with them monthly by texting or by commenting on their posts on social media.
Always make sure that when you contact them, it’s about them rather than you or your business. For example, send them birthday, anniversary, or “anniversary of your purchase” information. You could also update them on the local high school sports schedule, summer concerts or other happenings that may be of interest to them.
3. Double the number of deals you do
How many buyer leads have you ignored since the first of the year? According to NAR, half of those buyer leads had a property they needed to sell in order to purchase. In other words, when you fail to respond to a buyer lead, 50 percent of the time you’re blowing off not one, but two potential transactions — the sale of the buyer’s current home plus the purchase of their next home.
4. Attract more buyers with Down Payment Assistance of $17,000
According to Rob Chrane, the founder of DownPaymentResource.com, (DPR) the average amount of down payment assistance (DPA) that was provided in 2022 through the programs DPR aggregates was $17,000. Two-thirds of these programs are for first-time buyers and the remaining one-third can also be used for existing sellers.
If you represent “heroes,” (firemen, police, nurses, teachers, disabled, single parents, etc.) there are programs specifically tailored for these niches.
To locate which DPA programs are available on currently active listings, DPR partnered with a number of MLSs across the country as well as with Zillow to display all the DPA programs that are currently available on each active listing.
If your MLS is not displaying this information, visit Zillow and search for active listings. Any property that has DPA available and is posted on the Zillow website (click through on the mortgage tabs until you reach “down payment assistance”) will display all the DPA programs available. You do not have to go through Zillow mortgage to access this data.
5. 1% down plus a 2% grant AND PMI
On May 22, 2023, Rocket Mortgage instituted their ONE+ Mortgage program designed to help buyers purchase with a 1 percent down, 2 percent grant from Rocket, and a conventional 3 percent down mortgage. The program is available for both first-time and repeat buyers for single-family, owner-occupied residences only.
Assuming a $250,000 purchase price with a 30-year, 6 percent fixed mortgage, here’s how this nationwide program works.
- Borrower places 1 percent of the purchase price down ($2,500).
- Rocket Mortgage provides a 2 percent grant of the purchase price ($5,000).
- In terms of the down payment, the borrower is coming in with 3 percent equity. (Borrowers may contribute up to 3 percent down and still obtain the 2 percent grant.)
- The borrower’s monthly principal and interest payment is $1,453.91.
- By having Rocket Mortgage pay the private mortgage insurance (PMI) that is required of borrowers who purchase with less than 20 percent down, the borrower can save up to $245 per month.
- According to Rocket, it takes an average of seven years before PMI can be removed from the loan. Based upon this, borrowers would save an average of $20,500 during this seven-year period.
- In order to qualify, a borrower must have a minimum FICO score of 620 and cannot make more than 80 percent of the median income in the area in which they are purchasing. For example, if the median income is $90,000, the borrower’s household income cannot exceed $72,000 based upon Fannie Mae’s median income lookup tool.
Leverage lead generation tools with monthly costs, rather than percentage of commissions
My favorite way to search for potential investors and properties to list is to search for vacant properties that have been listed for lease as well as searching the rental expireds. I started training this approach over 25 years ago when you had to conduct these searches manually. In one case, one of our new agents found one out-of-area owner who owned 12 different investment properties in our area.
I recently interviewed Curtis Fenn, the president and COO of REDX, about how to use their tools to help investors locate properties to purchase. (REDX has been a sponsor for my Awesome Females in Real Estate Conference).
REDX is known primarily for their Expired and For-Sale-by-Owner tools and for generating owner information that has been scrubbed against the Do-Not-Call List. They also allow you to search for vacant properties and rental listing expireds.
According to Fenn, their Vortex tool also allows agents to access the additional resources below that can be used to directly contact borrowers who may be in financial trouble or who are potentially high-probability leads to list.
- Absentee owners
- Length of residency
- Age of owner
- Estimated equity
Of the categories listed above, the “age of owner” is the most important and here’s why. According to NAR’s most recent Profile of Home Buyers and Sellers, approximately two-thirds of the homes in the U.S. are owned by people who are 55 years of age or older.
A great place to start your search would be with homeowners aged 75 and over. The probability of them needing to move into an assisted living situation, of losing a spouse and wanting to move nearer their children, or moving out of a big house into a lock-and-leave retirement community is exceptionally high.
Moreover, it’s much less expensive to build marketing campaigns based upon helping older owners to “right size” their current living situation, enjoy a “lock and leave lifestyle,” or purchase a second home near where the children and grandchildren live.
You can also put together resources for those who may need to be in rehab for hip or knee replacement, who must move into assisted living due to an injury or illness, or some other unexpected turn of events. This is much less expensive than paying for portal leads.
The bottom line
According to Kurt Carlton in an interview I did with him earlier this year, the census numbers show that there are 15 million vacant homes in the U.S. Use the tools above to locate these properties and then help their owners repair and liquidate them.
Best of all, using the approaches above costs you next to nothing. Isn’t it time for you to stop throwing away all that extra money on portal leads now?
Bernice Ross, president and CEO of BrokerageUP and RealEstateC