Real Estate Is Also A Numbers Game


Real estate is a relationship business to a high extent, but by no means have the movers and shakers in the real estate industry built their empire entirely on relationships…those real estate empires were also built on numbers.

Finding a Buyer for a Listing

Getting a listing sold fast is something that most real estate agents claim.  Lets examine that process to see why its purely a numbers game.  First of all, you need to get that listing out in front of as many potential home buyers as possible.  The more the better.  This seems pretty obvious, but its the first numbers game example.  The more potential buyers you get the listing in front of, the more showings you will get.  The showings too are a numbers game.  If you think back to when you bough your current home, you most likely knew upon walking in the home that it was going to be the house you would buy.  Most home buyers fall in love with a house the minute they cross the threshold.  So what is your goal as a listing agent?  To get as many people to walk through the door.  The more people walk through the door, the better chance you have of someone falling in love with the home.  Once someone has fallen in love with the property, a couple thousand dollars (especially when amortized over 30 years) wont derail the deal from getting to closing.  Once a buyer has fallen in love with a property, as opposed to hoping for issues with an inspection in an effort to drive the sales price down, they are hoping everything runs smooth.

All of that being said, that is why the most successful real estate agents list a property close to its actual expected sales price.  That gets the most activity, thus the most showings, which creates the best odds of getting potential buyers to fall in love with the property.  Stacking those numbers in your favor creates the best odds of getting offers on any listing.

imac-605421_1920Getting Buyer Leads From A Website

Lead acquisition is big business in the real estate industry., Trulia, and Zillow have created an empire built on real estate lead generation. Agents are willing to outsource buyer lead generation because you need to fish with a big net.  What that means is you can expect to acquire the contact information (capture) of about one to two percent of your website traffic.  These numbers can vary pretty dramatically depending on exactly how you obtain traffic….but as a general rule, expect a one to two percent capture rate from a real estate website.  That means for every 100 visits, you should get between 1 and 2 people that provide their information.  Out of the people that provide their information on your real estate website, you can expect to close between five and ten percent of them.  Those numbers are taking into account you having an incubation system that follows up with potential buyer leads over time.  With the average lead generated on the web being 12-18 months away from listing their home or writing an offer on a home, you need a follow up system to keep those people on the hook as they move through the real estate sales cycle, that is why Select provides you with the Wolf Connect Database, and your monthly eNewsletter with a link back to your personal website. It is important that you put every lead into the system to ensure that they get your newsletter every month and think of you first when they are ready to buy.

Looking at these numbers, you can see that it takes a good bit of traffic to provide a return on investment (ROI) from your own real estate website.  Not that it can’t be done, but if you are capturing 1-2% and closing 5-10% of them, you need a good bit of traffic to make the entire online presence worth while.  That is why Zillow, Trulia and make money (in theory at least).  They have made that substantial investment in acquiring the web traffic, understanding the numbers game.  They spend an enormous amount of money to even slightly increase their capture rate a tiny bit.  Why?  because if the traffic is already there, even the smallest percentage of increase in capture goes a long way.  They really don’t care about the Closure rate—they are passing the lead on to the real estate agent…that is their problem.  If they can show that they delivered X amount of buyer leads for X amount of money, they have done their job.  On the other hand, if you own the website you will want to focus on the Closure rate of your leads, since you don’t make a penny on contact information. Again, that is why it is so important that you put every lead into your Select Contact Management System.

Acquiring Seller Leads (for listings) From A Website

We hear it all the time…online seller leads are crap!  They only want their homes value and have no interest in selling their home.  Once again, lets look at this from the “real estate is a numbers game” perspective.  If someone is requesting a valuation on their home, they have some interest in its value….duuuuua!!!!  The real question here is WHY.  Granted, a small percentage of home owners may want their homes value because it makes them feel good, or they are trying to settle an argument with a spouse on how much their home is worth….but in most instances, if the a home buyer wants their home’s value, its a first step in selling that home.  They may not be listing their home today, tomorrow or next week… its a first of many steps.  Once again, if you can acquire their contact information and drip QUALITY information to that home owner over time, you will stay top of mind when they get further down the real estate sales cycle.  Remember, the lead is most likely 12-18 months away….fill in that gap.  The trick here is understanding that it is a numbers game.  Get your home valuation offer in front of as many home owners as possible, create a huge list of potential home sellers, stay “top of mind” with those sellers as they wander through the sales cycle and list a percentage of those leads.  It’s a numbers game.

Cold Calling

This is the most obvious example.  Cold Calling to get real estate sellers has been going on since the invention of the telephone.  It is purely a numbers game.  In most of the calls, you will be yelled at, spoken mean to, told to stop bothering them, explained to why they “hate real estate agents” and get numerous rejections. That is why we at Select don’t recommend cold calling. Working your sphere of past clients and prospecting around your new listings and sales is far more valuable than cold calling.

Listings vs Buyers

Another example of real estate being a numbers game is listings vs. buyers.  It is the weakest of the examples, but an easy one to wrap your head around.  If you ask 10 agents, would you rather have a buyer or a seller…most will say a seller.  Now before you go off the reservation…that varies on the overall real estate market as well as from agent to agent…but in general, agents would rather have a seller.  Why?  Because an agent can take 100 listings but can’t take 100 buyers.  Listings can stack up and ultimately produce more revenue where there is definitely a finite number of buyers a particular real estate agent can handle at any one time. This is why great listing agents always out-earn agents who focus on buyers.

In Conclusion

Just about every aspect of real estate can be boiled down to a numbers game.  It is true that you still need to create great relationships and be exceptional at what you do, but if you don’t leverage numbers to get leads, buyers and sellers, and increase the size of your personal sphere…you will not be successful.


Source: The Science of Real Estate –

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