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/RealEstate is a bi-weekly podcast where we chat with agents and experts in the real estate space to find out what strategies are working for them, what tools are powering their business, and how they are maneuvering shifts in the industry. Join host and marketing aficionado Chris Whitling as he uncovers the tips, tricks, and tech ambitious agents can use to take their businesses to the next level.
00:00:00:00 - 00:00:19:13
Unknown
The number one job an agent should do when they do call their leads is solve a problem for them, right? Understand where they're at in the buying journey. If you call, if you call those lead and expect them to start scheduling showings and show up at the closing table that month, that's that's the wrong approach and you will set the wrong expectation for yourself.
00:00:19:19 - 00:00:33:10
Unknown
And you probably won't like what you're what you're seeing in getting.
00:00:33:12 - 00:00:54:04
Unknown
Hello and welcome to Forward Slash Real Estate, the podcast for the technology enabled agent. I am Chris with Real Geeks, and I got a guest with me here that if you're on our email list, you've probably heard from before. So, Chris, from Real Geeks. Why don't you introduce yourself? Yeah, I'm also Chris. Real geeks in the, in the leather jacket as well.
00:00:54:06 - 00:01:17:15
Unknown
And, yeah, I'm the VP of sales here. Real geeks. I've been in real estate technology for close to, two decades now, so, can't wait to start this conversation. We have a fun one today. We want to jump right into a topic that is, I don't know, we get a lot, which is. Well, why don't I just put a lot of my budget towards pay it close leads.
00:01:17:17 - 00:01:46:19
Unknown
We do. And it's been growing, I think, for a little while now, especially as these, turbulent kind of markets we've been dealing with the last few years. Agents kind of view team leaders viewed as well, I would say some maybe some emerging brokerages as well kind of view these as low risk, kind of offerings, you know, maybe as an agent who's new doesn't have the budget up front to, to spend on marketing, maybe it's a team leader who wants to, you know, go into growth mode and they think pay close is the answer.
00:01:46:21 - 00:02:09:10
Unknown
And, I gotta tell you, it's not true, Chris. Well, let's start with like, you know what it says on the box, right? So you know why pay it close? Seems like a good idea because it seems like a low risk, no risk way of feeding your organization. Right on the surface. Sure. Right. It's like short term, feel good transactions.
00:02:09:12 - 00:02:28:22
Unknown
But, you know, when you go to, you know, your weekly meeting with your team leader or broker and or throws a leader board for, for commissions, and you might have a lot of transactions that you drove all over town for. But then you look at your commissions and you know, the peer closed provider took 42% of your pay.
00:02:29:03 - 00:02:48:18
Unknown
So that doesn't feel so good. On top of that, the team leader is thinking, how do I grow this team at a lower cost? So they got to keep adding and adding and adding more agents because they're chasing their tail as well. Because they have to peer now at close. So it it's the transactions definitely feel good Chris.
00:02:48:18 - 00:03:10:08
Unknown
But long term it's not a growth strategy. Right. And it basically boils down to you're just not keeping as much of your revenue as you could be if you owned more of your marketing funnel. Yeah, you're renting it right. And not only that is why do agents get into real estate in the first place? They get in for freedom via their own boss.
00:03:10:10 - 00:03:31:16
Unknown
So then when you send it for when these pay close models and you're having weekly meetings, sales meetings essentially with their sales manager and they're telling you, you know, call the call these leads follow up on this lead or you don't get leads right now, you're basically just have a new boss telling you what to do. And that's not why agents got in this business, right.
00:03:31:16 - 00:03:58:08
Unknown
They got in for the freedom for, the autonomy, to scale their business the way they see it. And, that's kind of like the mental mind trick that they have to play. You know, it's often that they compare these pay close models to, you know, a traditional lead gen platform, such as real geeks. So it's like, do you want to have that steady, steady monthly leads online lead generation through your brand and kind of a traditional model?
00:03:58:10 - 00:04:15:04
Unknown
As you pay as you go, or do you want to take the no risk other then pay half your commission close to, you know, get think about their splits in their involved two careers. So you're paying your team leader. You're paying your broker. You're paying. You know, everyone wants a slice of that pie. So you get very little commission at the end of their pay.
00:04:15:04 - 00:04:36:15
Unknown
It close. But the transaction is what makes it feel good. You know, in comparison to online or online lead, gen model, you might get 25 leads a month, right? On a traditional kind of, let's say repackage that cost you 12 grand a year. So you met 300 leads, 300 leads a year. You get 1% conversion. That might sound low to a lot of agents, but that's incredible.
00:04:36:18 - 00:04:56:21
Unknown
That could be three transactions, right? So if you go to any other business out there and you walk in and say, hey, you know, I'll give you 12 grand and let's say, you know, in this scenario, let's say the house cost 500 K, so it's 15 K, you know, in commission. So 45,000. So I'll get, you know, give me 12, 12 grand, I'll give you 45 back.
00:04:57:02 - 00:05:17:11
Unknown
That's an incredible business model right. It's a long term plan though. It's building momentum. And it only gets better year after year. Compounds I'm trying to think about the like what people are going to say you know. Yeah. But pay it close. Just like we said. Ready to go sooner. Yeah I mean I get it right. And you know, because that like being a real estate agent is difficult, right.
00:05:17:15 - 00:05:35:21
Unknown
It's hard it's hard to get business. You know, you're a solo entrepreneur I get it, I get why it would be appealing. And online lead generation doesn't have to be your only avenue as well. If you're a newer agent or looking to get into some some lead gen. Right. You could do the gen, but then sit open houses every weekend as well.
00:05:35:23 - 00:06:01:02
Unknown
Like there's other avenues. Are you upload your database, you know, in your CRM and sending out market reports, you know, home value report, CMAs. Are you doing all the different things or are you putting all these eggs in one basket? Right. That's not a great growth strategy either. So you got to look at it differently. So what about for the brokerage that is thinking okay yeah I have a diverse portfolio of demand generation tactics.
00:06:01:02 - 00:06:23:07
Unknown
And you know the pay it close guys are just one of them right. So like how do you how would you advise someone that's thinking about keeping the pay close as part of their portfolio. You know why why, why keep it at all right. Is it is it because you bring it on a lot of new agents and you want to make them get off, you know, to, a quote unquote fast start, make them feel good with transactions.
00:06:23:07 - 00:06:42:16
Unknown
That could be a reason, right? You know, we talk about this all the time internally at Real Geeks. Like, you know, I'm a sales leader. I got to keep my sales team mentally prepared every day, mentally focused. And, you know, wins, create more wins. So I can see that kind of thing. Like, you know, let's give them some wind velocity under their wings and then send them out, to other avenues.
00:06:42:22 - 00:07:06:03
Unknown
You know, you talked about the freedom element, you know, but it definitely seems like, you know, in most pay close models, there's some downside. And we're also seeing, you know, the, the vendors becoming, you know, maybe increasingly micromanaging. So, I mean, talk through a little bit about like, kind of the, the overhead that comes with this free lead.
00:07:06:06 - 00:07:22:07
Unknown
Yeah. I mean, you got to think about it like you're driving like you don't have a choice if they gave you a lead, that's, you know, if you let's say you are, you know, you want to work a certain demographic, or I should say a certain area, certain city, a certain farm area that I want to farm.
00:07:22:07 - 00:07:36:13
Unknown
This city, this is kind of where I live. This is that this is the price point I want to be at. Like, that's that's why. That's why you got a real estate license. Maybe like a bunch of your, you know, people on your PTA or like, hey, I wish you, you know, I would do business with you. You should be a realtor, right?
00:07:36:15 - 00:07:51:10
Unknown
That sort of thing. So they they pick their farm area, they pick their price point, they want to be out. Then they sign up for a pay a close model up on a sales meeting with them, and they send a lead that's 30 miles in the opposite direction for a price point that is well below where they want to be.
00:07:51:10 - 00:08:09:05
Unknown
They don't have a choice. They got they got to follow up on that lead, right. They got to spend time driving out there doing the the report, you know, CMA report, the market research, the research on the neighborhood, the schools. They gotta do all this work right for this lead that they really don't. It doesn't really fit what they wanted to do originally.
00:08:09:05 - 00:08:39:17
Unknown
Yeah. But, I own this lead. Right? Is it really your lead or is it their lead? You know, and they they can pull leads at any time. They auction off, you know, home buyers and sellers to the highest bidder, essentially. And they have a very strict follow up policy on these lead. So again you are not you have a second brokerage almost right that you're, you know, working to working for and having to shop for and and you know, work the leads the way they tell you to work them.
00:08:39:17 - 00:09:12:08
Unknown
Right. So let's start migrating into like the mental, mindset that is going to get you to kind of think like, okay, hang on, these things are not that great of an idea. And, you know, maybe you can walk through some of the calculations that get you there. And from my perspective, it seems like since you're talking about a much lower profit margin, you are thinking that you're going to scale your way out of this, but scaling your way out of no profit still is no profit.
00:09:12:08 - 00:09:33:21
Unknown
No profit. Yeah. Exactly. Yeah. Yeah. No, it's that's the thing you're you're chasing something that doesn't exist. Right. It's the transactions again. It's 800 times on this thing. Like they feel good transactions feel good for any agent for any salesperson in general. So that that's not check that box. Great. But then ultimately, you know everyone has bills to pay, right?
00:09:33:21 - 00:09:57:17
Unknown
They they need income. They need they need commission. And when you have someone taking 42% of your commission on these leads, on top of your other splits, like you had to do ten times more transactions, the person who decides, you know what I'm going to, oh, my pipeline. I'm going to own my contacts, I'm going to do my own lead generation, and I'm going to and scale for the long term.
00:09:57:22 - 00:10:18:12
Unknown
Because like I said, if you have one of these these lead gen platforms, right, they compound year over year. You know, I think I think what I think the trouble that agents face when they look at like a 1% conversion over, you know, a year, is is the fact that it takes it just takes time. Right. And they want that instant gratification.
00:10:18:13 - 00:10:42:02
Unknown
Let's drill into that. You know, maybe a little bit slower because I think first we need to talk a little bit about the like the acquisition models that a lot of agents understand, because I feel like there's really two that they, that they think of. One is, you know, kind of working your sphere building referral base, that kind of thing, which is like the traditional real estate agent growth model.
00:10:42:04 - 00:11:04:07
Unknown
And then the other one that they're pushed heavily is pay it close leads. But really there's there's third, which is owning your own demand and funnel. And so can you. Can you walk me through like what that looks like and then how the characteristics of that are different when you're looking at your, your own like, you know, let's say, you know, an ROI numbers.
00:11:04:07 - 00:11:29:14
Unknown
Yeah. So I mean, if you're generating your own contacts, like if you're sitting in open houses, for instance, which is I would recommend any agent out there, that needs middle funnel contacts that turn the leads that turn the deals that they own to their entire pipeline. Go sit open houses. Right. Go volunteer for every, you know, find your farm area and any any agent, your office that has listings raise your hand every single time.
00:11:29:16 - 00:11:48:15
Unknown
Right. So that's a source that you can put into your into your CRM that you completely own. No one's going to go in there. Take it from you. No one's going to take a cut of your commission. Right. That shouldn't and and really that's that's what it's about. So in in many cases, they're just not doing it.
00:11:48:15 - 00:12:11:19
Unknown
They're not understanding the difference in, in the calculations of like what short term I think works versus this long term, you know, growth that they want to be at. So if you just look at basic I mean basic like, you know, $500,000 house, like I said, if you get three transactions at that, that's pretty conservative price point, right?
00:12:11:21 - 00:12:31:19
Unknown
That's 15,000 on 3% commission. So you have $45,000 on three transactions. And I'm sure you I'm sure most agents have other other channels that they're getting like you mentioned. Sphere, right. Sphere is, you know, people like interest in your phone book. Right? Your it's your cousin's friend. It's your, you know, aunts coworker, that sort of thing. Right?
00:12:31:19 - 00:12:56:01
Unknown
Just your sphere of influence that you post on Facebook and it's like, hey, I'm a real estate agent. If you have any questions, you know, contact me. Right. So the math is so much better on those type of contacts that you own versus these ones that you rent from a portal that takes a huge cut. So it's a long term game, but that long term game is worth playing.
00:12:56:03 - 00:13:15:20
Unknown
So talk to me about what does long term mean. You know, we're talking about like, you know, building a business that you actually own. So how long does it take from the time that I start, you know, doing something like generating Google leads to the point where, you know, I have a self-sustaining, you know, thing that that's chunking out transactions.
00:13:15:23 - 00:13:40:18
Unknown
Yeah. Well, I think you kind of, mentioned it earlier. You got to be multi-channel on this. You can't put all your eggs in the online login basket. Only lead gen is fantastic. And you should you should have some money there whether you do it yourself through like Facebook ads, which is really easy to do. And, and and you know, well leads are really affordable to to Google spend which is more aggressive and can cost a little more and get the higher intent leads there.
00:13:40:19 - 00:14:04:21
Unknown
But you should be working in your sphere. You should be posting to Facebook. You should be, setting open houses. You should be joining different networking groups or joining your PTA or doing, events at your at your kid's schools. All the things you got to get in front of people. And, and then you got to call your leads to, like, you know, if you're doing all these things, you got to you got to call the leads, you know, especially with online lead generation.
00:14:04:22 - 00:14:39:15
Unknown
So, and just to get 1%, like I said, I mean, that's not too much to ask. You just got to call your leaves. All right. So, Chris, you talked about you got to call your leads, right? I think one of the things that we consistently hear is, well, but I have this feeling that a paid close lead is good go versus a online lead is going to require, you know, some some level of like, you know, care and feeding over a period of time, you know, can can you address those like how do you advise agents when they're when they're saying like, you know what almost sounds to me like, yeah.
00:14:39:15 - 00:15:00:01
Unknown
You sure? Sure. I have to call them. Yeah. I'm going to say something. And no other, vendor is going to tell them. Is. Yeah, they're not ready to go. Leads. Right. These when you generate a lead through your website platform, they're explorers, they're curious, they're searching. Right. They're not hopping on, a portal and know exactly what they're looking for.
00:15:00:01 - 00:15:20:09
Unknown
No, they're they're actually going to Google and searching. Show me homes in this area with the pool, with a big backyard because they don't know what they want yet. So yeah, they are still exploring the number one job an agent should do. When they do call their leads and solve a problem for them, right? Understand where they're at in the buying journey.
00:15:20:11 - 00:15:43:14
Unknown
If you call, if you call those lead and expecting to start scheduling showings and show up at the closing table that month, that's that's the wrong approach. And you will set the wrong expectation for yourself. And you probably won't like what you're what you're seeing and getting. But if you approach it, the correct way and ask the right questions on those leads, and really your only job is to is to solve a challenge for that, right?
00:15:43:14 - 00:16:01:19
Unknown
That could be anything. You leave it open ended, like, hey, this is Chris, see you on my website. You know, what's the most important thing to you, in your home search or what's the biggest challenge right now that you're facing in your home search? You know, what would make or great question would be, you know, hey, this is Chris.
00:16:01:21 - 00:16:18:23
Unknown
You know, I know searching for a home can be can be difficult. What would make the process easier for you? And they might say, oh, I need to find a lender, and you can help with that. Guess what? You solve that problem, and then you turned them into your claim. So with all in the generation, solve a problem.
00:16:18:23 - 00:16:56:21
Unknown
Number one connect. Well, Chris, ask your first question. Yes. Call your leads. Of course. Call your leads. Then try to solve a problem for them, and you will turn more of those leads into contacts, into connections, into clients, into closings. Do you think it's really true? So I guess one of the things as I think through this, you know, a contact that's browsing, you know, one of the big portals and is clicking on random things and, you know, then says, yeah, I might, you know, be interested in going and seeing this house versus someone that has gone to Google or typed in a specific search ended up on your website, like so now they're,
00:16:56:21 - 00:17:19:12
Unknown
they're on a like more niche specific website, and then giving you their name and phone number, you know, with the full knowledge that you're going to call them, you know, it it does strike me as weird that people consider or the agents considered that the Google leads are lower intent when it does seem like there's almost more effort on the part of the end user.
00:17:19:12 - 00:17:49:00
Unknown
100% true that. That's a great point. And really, what the portals have on their side is just volume. That's it. It's just they have so much volume that they can filter through and have a large call center calling and finding those, you know, those diamonds in the rough versus, yeah, you're right. If you're googling and you land on a, on an ancient web on a real gig agent website, and you fill out a form to see that listing and get more information, that's pretty, pretty good intent.
00:17:49:00 - 00:18:09:03
Unknown
Right. And so now what you're saying is you've got to help that person with their process, like become the problem solver for them. So they keep coming back to you 100%. Because let's be real, like we know the averages, all our, you know, any any legit company out there knows that any leads don't convert for 8 to 12 months on average.
00:18:09:05 - 00:18:25:08
Unknown
Sure. There's going to be some that convert sooner, which is great. But let's be realistic. You know, 8 to 12 months you'll get you know, you start hitting your conversion rates. But between then and now you've got to build your pipeline or do it. You got to make connections, which means you got to solve problems for them. Right?
00:18:25:08 - 00:18:42:18
Unknown
You got to be their be their advisor, their real estate advisor. So, ask them right. Don't ask them, you know, if you want to go see this house this weekend, don't ask them a bunch of a bunch of buying questions. That's going to basically scare them off. Right? And then they never call you back. No. Ask them how you can serve them.
00:18:42:18 - 00:19:02:20
Unknown
How you what problem can you help them with that they're facing? All right, all right. Great. So, one of the things that we've been getting a lot of customers ask out here is basically terms and conditions, questions related to pay close leads. And yeah, you know, not not to foreshadow any content that we might have coming out.
00:19:02:22 - 00:19:27:00
Unknown
But, you know, it does seem that the question and we've already kind of asked this question like, do you own that lead, you know, or is the technology that you're using, you know, actually on your side on this thing? So do you do you think that a lot of agents are thinking about that, like, you know, is their CRM actually building a business for them?
00:19:27:00 - 00:19:48:10
Unknown
That is theirs? I think they are. And I mean, I know they are, because we've been doing those calls this week since, you know, the other platform, change their terms and conditions recently. So it's super important. I mean, their contacts when you go, if you're a successful real estate agent or team or brokerage, like when you sell your business, what do you buy in, Chris?
00:19:48:12 - 00:20:10:05
Unknown
The database, the database. Right. And so your database is everything to a real estate agent. And so if you have if you sign up for a provider that changes their terms and conditions and saying, well, now we have mutual customers or shared databases, for whatever reason, it doesn't really matter. Right? That would be that would be concerning as a real estate agent.
00:20:10:05 - 00:20:35:07
Unknown
So I totally get, the frustration that's happening right now. You know, I also understand why that company did it. It makes total sense to me. Like, I think it was, you know, just a bound to happen. After that acquisition. So, Yeah, I think it's super important. And and you have to really trust where you put your contacts.
00:20:35:07 - 00:20:59:03
Unknown
Yeah, exactly. I think that, there was a trade show that we came back to where we talked to a lot of that platform's product people, and yeah, after the announcement, everything seemed to click. And so the the play seemed obvious. And we were even hearing that from, from our customers. So, you know, I'll just, you know, maybe repeat the thing that, you know, Kevin said.
00:20:59:03 - 00:21:37:18
Unknown
And we hear from a lot of our customers, which is I want to own my business, which is the same reason that you, you know, have people maintaining databases that are not, you know, tied to their broker tools 100%. And that's why pay close doesn't make sense either, because you really don't own your business. Right. So if you're an agent out there that's, that's wants that, that wants to keep their autonomy, your freedom wants to have your growth strategy that is yours and yours alone, where, you know, you decide, you know, where your contacts go, who has access to them, etc., etc. like, you know, get a get a lead gen or a CRM
00:21:37:18 - 00:21:56:00
Unknown
platform that honors that and, you know, pay it close may seem like a great idea, like a no risk. And it's quite the opposite. There's a lot of risk to pay it close. Chris. If people want more information about real geeks, where do they find it? You go to real geeks.com. You can give us a call. We'd love to hear from you.
00:21:56:02 - 00:22:16:00
Unknown
You can book a demo with us. We'd love to show you around. You know, show you all these things that really you can do for you and your business and your long term growth strategy. Because ultimately, we love serving real estate agents. We love this industry. Been doing this for 17 plus years. And, we want to see this, industry move forward in a positive way.
00:22:16:02 - 00:22:39:00
Unknown
And so supporting agents is how we do that. And investing in agents and agent technology, is number one importance to us. You know, maybe just to leave the audience with a little growth hack. I know everyone kind of has an aversion to going and talking to salespeople, but, you know, talking to a salesperson that does nothing but talk to other real estate agents all day might be a great way to get some really good Intel.
00:22:39:02 - 00:23:00:23
Unknown
So you might want to call one of Chris's guys and ask, what other agents in out the area. And, you know, building your real estate business land are doing, because I know they have a pretty good perspective on that 100%. All right, everyone, quick episode for us. This episode is based off a blog post. There's probably a QR code on your screen right here.
00:23:00:23 - 00:23:18:02
Unknown
So get that one or there's links down in the description to, go read that post by Chris himself. Give us a like give us a subscribe. And if you've got any questions, leave him in the comment section. Talk to you later.