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The key is to get on top of that lead immediately. Those leads are looking for instant responses.
The Wilson Group
9025 Forest Hill Avenue Suite 2-A
Richmond, VA 23235
- Purchase a zip code or leads from a zip code
- Once you have a lead, Call within 2 minutes
- Have an automatic text cultivation system in place (like AutoPilot ISA)
- Convert and Close!
10 Steps to Success
Today, I have the pleasure of interviewing a good friend and a client of mine, Reed Wilson, from The Wilson Group in Richmond, Virginia.
We’re going to let Reed talk to us today about his short journey in real estate. He’s only been in for five years and closed 76 homes last year in 2017, which is pretty amazing. He’s going to talk to us today about his lead sources.
Reed, welcome. Are you there?
Reed Wilson: Honestly, my background was in retail management. I was there, in retail management, for 12 years. Just got burned out of living in malls and not being able to enjoy any kind of life whatsoever outside of work and I knew that’s just not the way I wanted. I left retail after 12 years, took six months off because I’d been in sales my entire life, decided to give real estate a shot. I got into it basically when the market was tank it in. I got into it and here we are. Still loving it.
Lori Ballen: Fantastic. When I asked you about your real estate lead sources, and this is something I actually find typically amongst real estate agents, is that most of us have two or three lead sources that we’re generating most of our real estate business from. I mean, we all have some auxiliary and some additional but usually, when I ask, there are a few key ones. When you broke down your numbers, you discovered that … Well, you already knew, but Realtor.com leads that you actually buy are your number one source and your number two source is your Pay Per Click that you actually hired my marketing company, Ballen Brands, to do for you. Then, your third is referrals. Is that correct?
Reed Wilson: That is correct. Yes.
Lori Ballen: Let’s dive into this a little bit. Primarily, you’re getting your business like I do, which is through the internet. You’ve got some key strategies and conversion methods for working these web leads, which we’ll talk about in a little bit that I know everybody, will find very helpful, but let’s talk about Realtor.com. How did you get started with Realtor.com?
Reed Wilson: A great question. About two years ago, honestly, I was never one to pay for leads. I was always about generating a referral, but then I knew that I needed to do something to take my business to another level to keep building upon the momentum, so I reached out; I looked into Realtor.com and I just started in very small to get them and then convert them.
At the same time, I was also looking to build a team, so it was actually just a perfect match that I was able to hire a team member to serve as a buyer’s agent while I did the lead generation. That’s how it started and built upon the success we had last year with them.
Lori Ballen: How many years, did you say, you’ve been doing the paid leads with Realtor.com?
Reed Wilson: About a year and a half. I started in middle of 2016.
Lori Ballen: Wow, and you …
Reed Wilson: 2017 was the first full year that I had for 12 months.
Lori Ballen: And you closed $5 million worth of real estate sales last year after just getting started with them.
Reed Wilson: That is correct. Yes.
Lori Ballen: Tell me how this works. I know that … I actually … I’ve always done well with Realtor.com but I didn’t pay for it. My previous brokerage, they actually bought a Realtor.com package for us and somehow we weren’t buying zip codes but we had the ability to enhance our listings and all of that. I also found, at that time, that my highest converting web leads, actually, were Realtor.com but I’ve never paid for any of it, so tell me how that works. You’re buying zip codes, is that right?
Reed Wilson: Correct. Yes. What we did was we looked at the areas that we wanted to work, in or around our office, around price points that we were excited about. We really specialize in first time homebuyers, so we focused on zip codes that would be in those areas.
The way it works on the side is every zip code is broken into three or four different parts or shares, as Realtor.com calls them, so I buy into a share. Typically, they’re about 12 month contracts so you have to be prepared to commit it and I don’t like a contract, so it took a lot for me to do that.
Then, what happens is one part of a share or a zip code can actually be shared amongst whoever is paying for that zip code, so it could potentially be in-between four different realtors or brokers that are paying for one zip code or one share of a zip code. You can actually pay for one share or you can pay for the full four to have total control of that zip code.
Lori Ballen: Great. You have a 12 month contract, there is three or four shares per zip code and multiple agents could share a single share. How does that cost work out?
Reed Wilson: The Realtor.com account reps, they already have, based on their market, how many leads come from one specific zip code, and then they’ll divide that by three or four, however many shares they want to have. Then, depending on how many you want to have, will break that. For example, of a zip code, and I’m just speaking generically, let’s say a zip code costs $1,000 for the full share a month, but I don’t want to participate on the full share. If I want a quarter of that share, well, then maybe I will pay $250 a month but also because I’m paying less I’m also going to get less leads. If that zip code guarantees you 60 leads a years, well, I may be getting down to 10 to 15 because I’m reducing my cost as opposed to the full share. But that’s a great way to start and that’s exactly what I did. When I started, I bought into one share.
Lori Ballen: When you first started, you bought into one share … We got cut off there. Then, go ahead.
Reed Wilson: Then, my first share that I bought, I started off paying 60 bucks a month, and I think I was guaranteed 15 leads over the course of six months to a year, but I started very small with one share and one zip code.
Lori Ballen: Then, you’re working your way up. I didn’t ask you so I don’t want to put you on the spot, but I know that you’ve got, in here, the web leads typically convert at 1% to 2%, which I agree with. If they’re cold web leads, they’ve never heard of you before. We’re not talking about cultivating, sphere of influence on Facebook or anything like that. Cold leads, just Joshmo, you’re going to convert half a percent to a couple percent. I find it hard to find people that are even doing 3% and 4%, they can prove multiple sources of cold leads. Per source, sometimes they will covert higher. Do you know how much … How your Realtor.com leads are converting or you just know they’re the lion share of your closings?
Reed Wilson: Well, based on the … We did 26 transactions closed from Realtor.com. We, over the course of 2017, we received 558 total leads, so that, I think, when we figured it out that’s about 4.6% rate of the closed transactions versus the number of leads that we got.
Lori Ballen: 4.6% … Hold on, let me just do the math here, too. You had a … That’s a 4.6%, exactly right, closing ratio from Realtor.com. That’s what I was saying that web leads can convert at a higher rate per source if you’re tracking that source. When we take an aggregate of everything: Craigslist, Facebook, Zillow, Classifiedads.com and all of those, that’s when we start off; that’s when we have lower losing percentages. I love that. That’s fantastic. Now, have you found, or do you have the ability to buy more space in your area?
Reed Wilson: Absolutely, and that’s how … When I say, in the very beginning, when I started with a $60 a month share, within 90 days, we had our first closing because I don’t like a monthly payment, so what I did was took the commission for the team back into and paid that contract off, bought into another zip code with another share and we just constantly keep reinvesting back into our large demographic of our area. Right now, current, I am participating in about 14 different zip codes and shares.
Lori Ballen: Wow, that’s amazing. Let me ask you, have you done the math on your cost per lead or your cost per sale actually? When you close one of these 26 houses, what is your average price range on those 26 houses?
Reed Wilson: Our average sales price is about $245.
Lori Ballen: Have you figured out how much you’re spending, then, overall? What your cost per sale is to what was your cost to acquire that, then, through Realtor.com? Have you done the math on that?
Reed Wilson: Not to that detail yet. Basically, what we’ve been doing, we’ve just been tracking what we spend versus the team income. Not to that detail just yet.
Lori Ballen: Do you know, for all of 2017, what the total spend was to Realtor.com about?
Reed Wilson: Yes. It was $15,338.
Lori Ballen: Perfect. Now we’re getting somewhere. Let’s just say your average house was $245 … Now, everybody listening, I really struggle with math. This is hilarious but it’s a true story. I’m very authentic, you’ll find with me. I have to have my calculators and I have to do it very purposefully and strategically, so I tend not to do math live so this is very scary, but let’s just take a look here.
All right, so $245,000. Let’s say $245,000 … I’ll tell you what I’m doing, hold on a second. Commission is never standing. Anybody that’s listening, especially the new agents, there’s never a standard commission, there’s never an average commission, we’re not even allowed to talk about average commissions.
Let’s just say, though, for pulling a number out of the hat here, Reed, that your team is bringing in $7,000 a transaction. We’re just try to … A rough estimate here. If that’s $7,000 times 26 houses would be $182,000 in team income. Does that make sense?
Reed Wilson: Yep.
Lori Ballen: Holy Molly. That’s a return of $167,000. Now, I’m going to take this one step further, and you can stop me if you don’t want to drill down, but you have a team. Out of those 26 closings, how many of those homes did you pay out in agent commissions to? You didn’t work it, you have a team, you paid it out to somebody else. How many of those deals did you have a cost to sale for an agent expense on?
Reed Wilson: 26. I don’t work the leads; those are specifically for my team agents.
Lori Ballen: Beautiful. Out of those 26 deals, you would have paid out to your agents what? 50% or do you have maybe a different model?
Reed Wilson: Yeah. It’s about 50%; it’s a pretty standard team for what we have.
Lori Ballen: Let’s just say out that estimated $182,000, you pay out $90,000 and you never leave the house, you never go work a deal. You have a $90,000 to your operating expense account. After your cap or whatever … I don’t know whatever your guys’ fees are. Let’s just take that down to a rough estimate of $70,000 and if you’re running a team that’s 40% profitable … I know I’m really drilling down here but some people will appreciate this, $70,000 times 40. Technically, you’ve doubled your money, in your pocket, at the end of the day without ever leaving. Did you see how I went through that?
All right, that’s absolutely amazing. You doubled your income, you kept somebody else working and they made money off you.
Reed Wilson: Yeah.
Lori Ballen: For you, strategically, this is absolutely 100% an investment worth doing. Now, I always tell people, I’m an SEO girl, search engine optimization. I love to get my leads by ranking on the search engines. I also love to get leads through Facebook and generating agent-to-agent referrals. But agent-to-agent referrals have a cost of sale because you’re going to pay out 25% to 30% on that referrals so you would do very similar math to how that all … That’s actually more expensive than your Realtor.com is. Even my sphere of … My SEO costs money. I have content that’s assets, I’ve got my website, I’ve got IDX fees, I’ve got tools that I’m using on the website, so nothing is free.
Reed Wilson: Right.
Lori Ballen: I hear people say SEO is free and … Yeah, right. I mean, you’ve got tools, you’ve got software but you’re still spending money. However, SEO is proven to have the highest return: ROI on investment, but when you can spend pay per click marketing and you’re converting at 4.6% of those leads, which I have all your tracking sheets so I see the evidence. That, to me, has worked … I would do it all day long. There is no reason why I would not do that. As long as I’m tracking, I can show the return.
Here’s what I do know, Reed, that you also do your pay per click marketing through Ballen Brands, which is my company and you also get a significant amount through that, but both of those strategies: pay per click marketing … They’re both pay per click marketing , essentially or pay per lead. Essentially, you still have to have a methodology for converting those.
Part of the reason you’re converting 4.6% of the Realtor.com leads is because of your systems and your processes, so can you tell us a little bit about what happens when a lead comes in? How does your team flow the life of that lead? How is somebody responding? When are they responding? Go through that a little bit with us.
Reed Wilson: Like I said earlier, I don’t work the leads. The leads coming to me, and as soon as I get a lead, then they’re rerouted to one or two of my team members. My requirement is they are to follow-up with that lead within two minutes. No exceptions. If I don’t get a response back, I’m sending it back to another agent to get on top of that really quickly. The key is get on top of that lead immediately. Those leads are looking for instant responses.
Our response is now, while you mentioned we do pay per click marketing , those automatically go into an Autopilot program provided by Ballen Brands, which we love, but because Realtor.com leads are converting higher and they’re typically hotter, ready-to-go leads, we make those initials phone calls upfront, quickly … The first initial phone call and then again once within 12 hours. If we don’t get a response either times and they’re put on our Autopilot program to, again, let that work smarter not harder behind the scenes for us to focus on the new lead that’s coming in.
Again, first, they’re required to respond within two minutes. We do the initial follow-up and then they get put on to our Autopilot and drip campaigns.
Lori Ballen: Let’s talk about that for a second. For those of you that are listening that don’t know, Autopilot ISA is actually a software that my company, Ballen Brands, built. We built it because of my personal pain with generating web leads 24/7, that’s what I do and having a hard time getting to all of them quick enough and responding fast enough, so we created a digital text dialer system that has tested and measured proven messages that fire from the second the lead comes in, it automatically dials them a text. It has these set of question and it’s a three campaign software: it has an arrival, survival and a revival campaign.
What I’m hearing you say, Reed, is that you don’t put them on Autopilot, like I do the second they come in. If they’re a Realtor.com lead, you have that separated so that your people can chase them first. Is that correct?
Reed Wilson: Correct. Yes. Those leads, we made a choice that because they’re warmer and were having success, we make those initial calls upfront before putting them on Autopilot.
Lori Ballen: Let me ask you this, in my experience with chasing these web leads, I’ve had a very hard time getting people to answer the phone. Do you or do you guys have … Are you measuring that at all as far as are they answering their phone or are you also texting them? Do you know how many people are answering the phone or?
Reed Wilson: Believe it or not, if you can jumble them within two minutes, you’d actually have a very good change. I would say about 50% of the ones, and I know that may sound high, but about 50% of the ones we call immediately, within two minutes, we’re grabbing them on the phone because they haven’t had time to get distracted yet. They’ve hit the button and requested more information, they’re probably still from their computer or owned a Smartphone so we have a better chance of grabbing them.
If we don’t get them, we don’t leave a voicemail. We’ll send them a text immediately, “Hey, this is Reed Wilson of the Wilson Group. Just got your information. Please, give me a call back,” and we go from there. But we do find that jumping on them really quickly will increase your chance of grabbing them on the phone.
Lori Ballen: Fantastic. The two minute window sounds like it’s the magic thing right there. It’s actually catching them instantaneously in having somebody to directly dial, and that was where my biggest challenge was is because we’re not really set up that way, so to call that instant is more challenging for me, for sure, that’s why we put Autopilot in play.
It’s cool because you’ve got this experience with Autopilot and you’re using it for your Google AdWords campaigns. We can just be working, doing whatever we do and all of a sudden a text comes back in that’s a response from a customer that we didn’t even know our machine was texting and all of a sudden we’ve got live bait on … Not live bait, that’s a terrible word to use, but you know what I mean. We’ve got somebody live now that we can start texting with, which is cool.
Reed Wilson: We love it. My team swears by it. I mean, I can’t tell you the number of conversions or the leads that have come back in that … Night text … We don’t have the time to text people nine times over the course of two weeks, so we swear about the program.
Lori Ballen: It sounds, to me, like you guys are handling arrival and you’re letting Autopilot ISA do the survival: keeps … Churn of them until it can incubate them until they’re at that point ready to go.
Fantastic. Is there any other strategies with conversion that we should know about?
Reed Wilson: Really, just the quickness is, even though we call within two minutes, I mean, we find that other agents have already contacted them. That is the biggest key: follow-up. Have a system in place is really what I suggest to increase your chances of conversion to have a system in place. Without that, you’re not going to succeed with Realtor.com leads. I don’t believe you can. I mean, you have to have that system in place to increase your chance.
Lori Ballen: I’m going to have to look up … I wonder if they have any kind of quoted conversion rate that they believe their leads as an average convert because yours are very high, that’s fantastic. I think we had a 3% tracking. That was, gosh, five years ago or whatever it was and before we were doing text and all that so I would assume higher now.
Now, your biggest challenges are going to be … I noticed, when I asked you on your pre-interview, your biggest challenge you said was that even when you catch people, oftentimes, they already have a real estate agent or somebody else has already gotten to them first, right?
Reed Wilson: Correct.
Lori Ballen: I actually think that is the reason why conversion rates aren’t higher. I don’t think it’s as much about just agents not doing a good job, I think it is the fact that a lot of people nowadays like to have their own control, and even if they already have an agent they’re still out there surfing the web for properties and they register so that they can get the goodies whether it’s photos or downloads or whatever else. I’m actually tracking this. I have graphs and charts on how many people call me that already have a real estate and that number is growing and it’s over 20%.
It’s a pretty incredible feat to take on web leads because you have to know that half of the web leads are not going to be valid; there are going to be bad phone numbers, there are going to be bad emails, there are going to be people that already have an agent, there are going to be people who don’t qualify: lucky, lose, that type of thing, so you’re really trying to convert the 50% that’s remaining.
Reed Wilson: Yes.
Lori Ballen: Go ahead, Reed.
Reed Wilson: You’re exactly right. That’s one thing that we know, it is absolutely a numbers game. We have got to generate 100 leads to get two appointments. That’s one thing, too, for anyone looking to get into this source that you’re not going to convert or close every one of them. We get it, we learn it so we just have to constantly keep increasing our shares, our zip codes, our leads so we can just, of course, have that better opportunity.
Lori Ballen: I can tell you guys, all of my business comes … I’ve an interesting model, so although I have a team, it’s not a traditional team. They’re people that work under my name and my brand but essentially I generate the leads and they go close the deal, so I’m not really … I’ve chosen people that work like I do that are honest, ethical, skilled, experienced and all of that, and so I don’t really have to be in the office every day with them coaching and training, they just do a good job.
For me, my full-time business is to generate real estate leads and primarily do that on the web, but I will tell you and, Reed, I’m sure you’ll agree that we also have to have excellent partners because, if we are counting on what we do whether we’re buying leads or earning leads, and there’s a sweet spot and combination for all of it, we have to know that whoever we’re handing those leads off to is going to be fantastic. We also have to know that we have lenders that we’re working with that are also going to get somebody qualified. There are all kinds of little … It’s like the baton race where they’re passing the baton, if anybody slows down or anybody drops the baton, you don’t get to the finish line.
Building a team and building strategic partners is key to converting these leads. Would you agree, Reed?
Reed Wilson: Absolutely. When you talk about lenders and other partners, when you send that lead to someone to get qualified, they’re a representative of us; we’re the referral, so you’re absolutely right. You have to pick your power team very carefully.
Lori Ballen: Absolutely. All right, so in closing up this interview, I want to let everybody know that Reed has given us his 10 steps to success with Realtor.com leads, and I can tell you, for the most part, these apply to any web leads. Reed, why don’t you just, really quick, tell us what those 10 are and then I’ll attach it for everybody to get access to the downloaded image.
Reed Wilson: Sure. First, like I mentioned earlier, you have to have a good CRLMO system. There’s not right now, you just have to have one that you’re going to work and works for you. Strategize on lead handling. Are you going to work them yourself? Are you going to have a team represent them? Then, the next one I put: show me the money. Have a budget. It’s okay to start small … That way, you can scale it to grow. Talk it out. I have a fantastic Realtor.com account rep that I’m happy to share his information if you wanted to contact me. Determine what’s happening in your market: the pricing for a zip code or shares. Commit to 12 months. You’re not going to convert 100 in the first month; you’re just not but commit to, at least, 12 months.
Follow-up and work the leads. Again, we talk about the two minutes. Our number one goal, with every lead, is to make the appointment. Ask for referrals. That’s actually very important because, if you can get a referral from a lead you paid for, that’s an extra incentive that you didn’t pay for. I mean, we really do ask for referrals for those leads that we did pay for. Pay-off. If you start small and you have your first closing, pay that contract off. Eliminate that expense while you still have the leads coming in, or invest that team income or your income back into another zip code or increase your opportunity. Then, be patient. It’s going to take time to build it up.
Lori Ballen: Those are fantastic. Absolutely spot on. All right, so you said you’ve got a great Realtor.com source for everybody. If they contact you, also, I’m absolutely sure that you would love their referrals out there in Virginia.
Reed Wilson: Absolutely.
Lori Ballen: Tell them how they can all put all your contact info also in the podcast description and in the write-up. How does somebody reach you?
Reed Wilson: Absolutely. You can reach me via phone or text at 804-396-4625. You can find me on Facebook: Reed Wilson, or a website: TheWilsonGroup RVA.com.
Lori Ballen: All right. Perfect. Thank you so much. You gave us some gold today and I really appreciate it, Reed. I’ll be seeing you actually very soon for our hands-on workshop, so thank you so much.
Reed Wilson: Absolutely. No problem. Thank you.
Lori Ballen: All right, talk to you later.
About Reed Wilson
Real Estate Is My Passion!!!
As a resident of Richmond, and the Fan District area for over 10 years, and having a second home in Hampton Roads, I appreciate everything the Commonwealth of Virginia has to offer. As a reported “Foodie”, I especially enjoy the area’s vast variety of locally owned restaurants. I can usually be found at a VCU Rams Basketball game, a Flying Squirrels game, at the area’s local festivals, and most enjoy those that also cater to my eclectic music tastes. And when I am not working or breathing in our local culture, I also enjoy spending time with my Golden Retriever “Wesley”, volunteering with the SPCA and traveling the globe.
I am always looking for that next great vacation spot and my favorite travel destinations to date have been Italy, Puerto Vallarta, Dominican Republic, Belize, Sarasota Fl., and the Caribbean.