What Is Conversion in Real Estate and How to Improve Yours?

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Written By Justin McGill

DealBloom aims to share the latest tips and strategies to help realtors, brokers, loan officers, and investors navigate the world of real estate.

What is conversion in real estate? As with any sales process, conversion is the process of turning a prospect into a paying client. 

As a real estate agent, I’m always looking for ways to improve my conversion rate. After all, that’s what it’s all about – turning leads into buyers or sellers. A low conversion rate can be frustrating, but there are ways to improve it!

In this blog post, we’ll explore what is conversion in real estate and how to boost your numbers.

What Is Conversion in Real Estate?

Calculating your conversion rate for marketing your listings can help you understand which of your marketing strategies are most effective.

As an agent, you’re always thinking about how you can convert a lead. A real estate lead is a prospect that can be converted into a customer with the right approach.

Conversion rate is the number of leads that turn into customers.

Yes, your goal should be to convert your leads into customers.

Why Your Real Estate Leads Aren’t Converting

Most real estate agents might think that generating new sales opportunities is a piece of cake. However, if that’s as far as it goes, then they’re in for a world of hurt.

Here are some mistakes that people make when trying to convert a lead.

Your Follow Up System is Terrible

Lots of people make tons of money by marketing to the same kinds of people who you think are crap. If after several months of trying your lead generation strategies, you aren’t getting any new clients, it’s time to change your strategy. Take a look at your processes, and figure out what you can do to improve your overall efforts.

You Focus on Short-Term Goals

If you’re looking for immediate riches as a real estate agent, then forget about it. The real estate industry is all about long-term growth. It’s built on developing your sphere, building relationships over years, and becoming a valued resource to your clients long after the sale.

You Neglect Your Most Valuable Leads

First-time buyers make up 31% of all home buyers, and 43% of recent buyers started the buying process by looking for properties online. Only 18% of buyers first contacted a real estate agent.

Most home buyers find real estate agents through referrals from friends and family. This is why it’s so important to nurture your clients and keep in touch with them. They are more likely to convert again or refer you to others.

Don’t ignore your valuable clients. Make sure to follow up with them after the purchase. And there are other non-digital ways for real estate lead generation. A housewarming party is one example.

You Think of Them as Leads

It’s easy to forget when you’re using a CRM system that names are more than just strings of letters. Remember, each name is connected to an actual person. Take the time to get to know them, have a real conversation with them, and listen to what their needs are. Build a relationship with them, and your business will flourish.

You Chuck Money at the Problem

A bigger budget won’t help you convert more leads into clients. What you need is a system in place that nurtures your leads to become clients and a system that helps you execute that.

How to Find Good Leads

While there are a lot of ways to measure the quality of your lead, the one metric that we find most useful is conversion, or the percentage of your leads to become actual customers.

A lead’s conversion rate is often indicative of their place in the “lead funnel” – a common marketing term for the journey a lead takes from being acquired to becoming active. The closer a lead is to taking action as a buyer or seller, the higher their conversion rate will be.

But, that’s only a short-term measure.

Looking at your sales funnel as a whole, you’ll notice that nearly all of the real estate leads fit into the same funnel. The only difference is what stage of their buying or selling journey they’re in.

This means that having an effective strategy for moving your leads down the funnel and toward activation is key. By nurturing these relationships, you can turn one-time leads into lifelong clients.

With more leads to follow up on, consider classifying them as short-term, medium-term, and long-term leads. The explosion in the number of new contacts can be an opportunity to build lasting relationships.

But, conversion rates are falling. They currently average 2%.

Why do some real estate agents have much higher conversion rates than others? Is it just luck? Or is there some secret to their success?

You may be surprised by this answer.

Lead nurturing is the process of guiding your prospect down your funnel towards conversion. Successful agents use effective strategies to generate leads, while those who barely scrape by are unsuccessful.

A robust lead nurturing strategy is multi-faceted, but at its most basic, it is:

  • Repeatable: Successful real estate agents get a ton of new leads to nurture. Your process needs to be repeatable and scalable.
  • Measurable: Measuring your nurturing campaign results helps you identify which parts of your campaign are performing best, and which need improvement.
  • Adjustable: As you learn more about what your lead’s needs and wants are, you need a strategy you can adjust easily to meet those requirements.
  • Dependable: Lead nurturing needs to be consistent to be effective. The tools that you use for this process should be reliable, and if possible, automated.

Tracking Your Conversion Results

Tracking your real estate lead generation activities is a great way to stay motivated and accountable to your goals. By determining your real estate conversion ratios, you can get a better idea of what’s working and what isn’t, so you can adjust your strategy accordingly.

An agent who makes 20 phone calls a day may feel good about himself but that’s his only focus. An agent who focuses on results might feel frustrated if he doesn’t get any leads from 20 phone calls.

A skilled lead generation specialist knows that generating new sales opportunities is a numbers game that will eventually pay off as long as the activity is consistent.

Knowing your conversion rates helps you focus on the work and not the results.

Success in real estate is found in the 10-10-80 principle.

  • 10% knowledge – learn what to do
  • 10% taking action – do something
  • 80% accountability – keep doing it

Most agents can probably remember when they first started generating more business. However, very few continue to generate leads with any kind of consistency after getting started.

Numbers tracking is a key way to hold agents accountable for their activity, especially when results are not immediate. This accountability can help encourage persistence even when results are slow.

In order to be successful in real estate, it is important for agents to establish and track conversion ratios. By doing so, agents can identify areas where they may need more training or development. This, in turn, will help them gain confidence and become more efficient over time.what is conversion in real estate

Conclusion

What is conversion in real estate? Conversion is all about turning prospects into leads and then ultimately into clients. A low conversion rate can be frustrating, but there are definitely ways to improve it! If you’re looking for ways to increase your conversion rate, remember to focus on your online presence, follow up with leads promptly, and provide top-notch customer service.

Justin McGill