We’re all searching for that perfect real estate lead; the one that calls you out of the blue and says… “I want to buy a $1 million home next week and I want you to represent me”. That’s a no brainer. Who wouldn’t want to be the Realtor who gets that call? The truth is that it doesn’t happen very often and it’s definitely not a strategy I suggest building your business around. If you’re going to build a real estate business, I suggest you work in the numbers. Your business should be built on a pipeline, not a pipedream.

The other day one of my colleagues at the GeekEstate Blog, Michael Price, wrote a post about myths in the Lead Generation business and “Daffy Duck” leads. Call them what you want, Daffy Duck, Mickey Mouse, Fred Flintstone; they’re all the same and they just did you the biggest favor by filtering them self out of your lead system. If a lead says their name is Daffy Duck, you know that you’ll be wasting your time if you call that lead. They’ve completely filtered themselves out from your day. It should take you no more than 3 seconds to delete that lead and move onto the next one that gives you their real information. Believe it or not, millions of dollars in real estate commissions are made with these same types of leads. Entire families eat off these leads and if you’re just going to throw them away…send them over to me because I know a whole lot of hungry Realtors who will take them all day long.

Many of us in the real estate industry seem to be hung up on the quality of a lead. Don’t get me wrong, quality does matter when we’re talking about acquisition price and ROI, however even low quality of leads can be turned into gold. The key to all leads is not how you get them or where you get them, but what you do to convert them into clients. If you get a lead who says their name is “Daffy Duck”, delete it and move on. If you get one that says “I need to sell my house tomorrow”, call it and email it ASAP. It’s that simple. You’ll be throwing money away and hurting your business if you give up on any type of lead.

To me, this subject is really very basic. Leads are built off the numbers game. Let’s look at it this way…If you get 1 lead, you’re going to have to convert 100% of your leads in order to make any money. If you get 10 leads, you’ll have to convert 10% in order to make any money. If you get 100 leads, you’ll have to convert 1% in order to make any money. The higher the number of leads you receive, the faster you’ll see a return on your investment and the easier it will become to make a profit with your marketing dollars. This is nothing new, but I keep hearing others preach about how you should focus on quality instead of quantity. To be honest, quality is a relative term and it’s 100% out of your control who gives you the proper contact info and eventually buys a home with you. Quantity is king when it comes to real estate leads. Building a system to generate and convert all lead types is what you need to be focusing your efforts on.

The truth is that every agent who wants to be successful on the Internet should be doing everything they can to capture as many leads as possible. That includes blogging, marketing their website, buying leads and yes (Gasp!) even blocking access to the MLS to get leads. Settling for this “Holy Grail” lead just doesn’t make any sense. Why would you limit yourself to “Holy Grail” leads when there’s just as much money or more in other lead types? If you simply want to blog at the beach and wait for leads to call you, then do it. But don’t forget about the rest of your lead sources. When it comes to leads, volume is your friend. You can’t build a business around “Holy Grail” leads.

A critical factor that affects the eventual conversion rate of a lead is how many times it’s been distributed. It’s really simple math. Out of any pool of leads, there are only a few that will actually convert into clients and if it’s distributed multiple times then your chances of closing the lead goes down significantly. However, consumers want a response from someone and distributing a lead multiple times is the best way to guarantee that. In other words, exclusive leads are good for the Realtor but bad for the consumer. Nearly 50% of all real estate leads never hear from an agent at all.

As a lead generator and Realtor for several years, I have been on a quest to find that “Holy Grail” of real estate leads. Recently, we’ve actually been converting leads for agents and then transferring them directly to their cell phone. If the lead answers a few questions correctly over the phone they immediately get transferred to our agent. This is the most valuable and highest quality Internet lead I can possibly think of, yet we still hear complaints about quality. In my book, quality will always be a relative term. If you expect 100% of your leads to convert, I suggest you stay away from the Internet.

Needless to say, I’m putting my hat in the QUANTITY ring. I’ll leave QUALITY up to the gods.

I thought I would give everyone some general rules of thumb for what they can expect from those “Daffy Duck” leads that Mike was talking about.

• 70-80% will give you a valid email address.
• 50-60% will give you a valid phone number.
• 25% will turn into a conversation. ***
• *2-4% will actually convert into a client. ***

***Your conversation and client rate are most affected by your conversion system.

Example: I know a Realtor who has 1500 “Daffy Duck” leads in his pipeline and has over 250 of them actively saving favorites and logging into his website at least once every 14 days. He’s currently sold more this year than he has any other year of being in business and who knows how many more are going to convert into buyers this year. I found this remarkable considering the current state of the market.

TIP: The number one way to convert a lead is to call & email them within the first hour of registration. The sooner the better. 70% of leads work with the first agent they talk to.

Something for everyone to chew on…100% of your leads will not buy a home from you. People will waste your time…accept it, move on and realize you’d be extremely lucky if you convert 5% of your leads into buyers. Filter out the bad leads and Focus on the good leads. If you do that, you’ll be well on your way to building a successful real estate business.