The ones that will survive in real estate are the ones that get it. It is that simple. Sources of real estate business and leads that provided income and a livelihood a few years ago, no longer applies to today's real estate business and may not apply again for some time to come. I remember in the 90's I had software for cold-calling, head sets and stayed on the phone 6 hours a day! There was a lot of rejection, but I still made great money in a town I had just moved to! It was a great way to learn the business, and how to handle objections and rejection. I also knocked doors in neighborhoods, that was a great experience and a way to find out what people are really thinking. Then there were the classified ads, and targeted mailings. That worked well in the mid 90's and there was definitely a bang for the buck until everyone got involved in it. Opportunity time in most real estate markets these days is not an opportunity at all. Walk-ins are almost non existent, and since the Internet, there are fewer phone calls that are real inquiries. Last but not least are corporate relocations. There aren't any! It is like the ad, "Help I've fallen and can't get up!" So where are the sources of business these days? Unless you have a relative at the bank that is handing you the foreclosures, you may be out of luck! The real money these days are in cultivating Internet leads.
A good friend of mine that is a broker shares an interesting story recently. He has 3 buyers' agents. One is great at converting leads. For a 1000 leads, she converts 15 sales. That is an incredible number given today's quality! His second buyer's agent converts about 7 closed deals for every 1000 leads. That in my opinion is above average! He has a 3rd buyer's agent that if he gives him 2000 leads he says, "They are all junk!" This guy is totally off base, and should not be in real estate. He doesn't get it, and will never succeed in real estate! He has missed the boat! Warm leads in this market are not the norm any longer! Each lead has to be worked, and followed up several times just to identify the real nuggets! That is what we refer to as "Prospecting!"
Real estate agents got too used to easy money and now they're too lazy to recognize they have to earn it. In our society no one is reading the newspapers, and classifieds anymore that is why most newspapers and real estate magazines are bankrupt! Another big source of our real estate business... relocations...it dead! Who would be stupid enough to move a mass amount of employees in this economy? The fact is that corporations are not relocating employees; they are closing plants and instead are laying people off to protect their bottom line! They will dismiss an employee in one city and hire someone else across the nation for half the wages. Think about it...no moving expenses, commissions or temp housing have to be paid to an employee! The company does not have to take a massive hit on a home equity in one soft market, nor do they have to pay benefits for that buyer to buy a home in another city!
So what does that leave? Internet and online business! This is a business that no one seems to understand, but it is a real money maker! It works 24-7-365 and is global! It is very cost effective. There is no postage to pay for, no address lables, no shelf life on the ads! You just have to work each and every lead that is generated. Yesterday, I had one agent contact 5 person and 3 turned out to be very good leads. Over the years in business I've chose not to have a team but to refer out the business. Some agents on our list made over 150K a year for over 10 years, and one agent I refer to earned over 250K a year just from leads I handed them The difference is that these agents are experienced real estate professionals that know what questions to ask, and then follow up, follow up and follow up! They are not afraid to ask questions, and have learned how to deal with the rejection. They have embraced the new reality of real estate while others just belly ache about how bad things are. Face it, this market is not going to return to the way it was for maybe decades!
The reality is we now deal with a new generation of home buyers. They did not grow up with newspaper ink on their hands, and they do not wait until the new hits the newspaper stands to read the news. This new generation, grew up totally online. They use the Internet to play, learn and gather information. It is the older generations that are dismissing their needs, but most of us are the ones that do not get it. The average real estate agent is in the mid 50's, the brokers are late 50's to early 60's and the buyers are in their 20's!
Their Time Has Passed!
- Cold Calling
- Opportunity Time or Desk Duty
- Open Houses
- Door Knocking
- Classified Ads
- Farming a Neighborhood
- Real Estate Publications
- Corporate Relocations
- Walk Ins
- Yellow Pages
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Wow Jim....you hit this one right on....I have seen so much change over the years and me typing a comment to your blog is just one of many...I think ( KNOW ) young new agents will be learning a whole new way to sell real estate.
Hi Jim, You've got some great points but I have to disagree with your assessment of floor time/walk ins (which are really one source to me) and farming a neighborhood. Floor time is probably a lot less than it used to be, but it can still be viable depending on the office rules. Farming in the "I'm number 1" traditional farming way has passed, but farming with a genuine, pointed offer is still capable of generating business.
By far, the internet is the best source of any type of lead...be it real estate or any other business and it will only grow as the generational changeover occurs.
Dennis Duvernay/ Broker Owner (Hillview Realty) You are so right! I remember when a Fax machine, or a pager was a space age gadget!
Ron Tarvin, REMAX, WHP Katy Cypress TX RT & Associates (Luxury and New Construction in Katy & Cypress TX) Some floor time, and farming may work, but it will not work in Atlanta. There are simply too many agents and not enough work to go around. Some subdivisions used to have 15 -20 deals a year take place. That has changed big time! Now they only ell 1 home a year and that is bank owned! How could an agent keep mailing a subdivision looking for a listing...when he sellers are upside down and cannot pay them?
Great post, Jim. And while I agree with most of what you said, I still get the bulk of my business from repeat business and referrals. And my office does get a lot of duty calls. Also Open Houses have been really, really good for me. Does that mean I ignor the online stuff? Absolutely not. But I think there are almost as many business models and strategies as there are agenta who succeed with them.
Jim it seems time in the business still helps. It never hurts to have a relative in a bank does it? Referrals and contacts along with working the internet leads is my business. I still am looking for that friend n the bank.
Jim,
Great perspective. I am still good with my SOI and working to grow from the pull method of blogging. It just works better for me.
I am amazed at the number of folks who I have invited to blog who are so opposed to the concept. So far, only my DAD has taken me up on this! He's always been a Maverick, which you will need to be in real estate or any profession to succeed in the future.
All the best, Michelle
Jim - So true, what is a newspaper? The first time homebuyers for the most part are all about technology and the internet, cell phones, Iphone's, and Ipods all play a key roll in that.
Patricia Kennedy (Evers & Company Realtors) Well said Pat. All markets are different in their own way. You are in DC, and I could easily understand walk ins. That is no longer happening in suburban Atlanta.
John Walters (Licensed in Slidell, Louisiana) (Slidell, Pearl River, Lacombe) We all are! :)
Michelle Francis, Atlanta GA (Tim Francis Realty) Many agents that scoffed at my webs, and Blogging are no longer in business. They did not grasp the concepts either.
Jared Hokanson - Realtor® Southern Oregon (RE/MAX Platinum) I totally agree with you! Generation "X" and Echo...online connectivity is a keystone in their lives.
Jim, What a great analysis of the way things are now. In our market we still do a lot of print ads. We are a large coastal second home market. Most of the customers for these homes are boomers. They all will look at listings we send them online but they seem to start their searches in real estate magazines.
Hi Jim, This post was very timely, especially for me as I do internet marketing but not to the extent that I should. My company advocates prospecting by cold calling and I am reluctantly "going towards the light" so to speak. I agree with you 100% about the internet being the 24/7 "it" place for Real Estate. Thanks for the post!
Jim really good one here, lets here some of those internet scripts?
Tiffany L. Young, CDPE - South Florida Short Sale Specialist - Broward County (Keller Williams Realty) I hate cold calling, but I was very good at it. I really prefer the Internet, and that is where I made the most money!
Spokane Washington Real Estate - Ross Quintana 509-362-1966 (Team Quintana Real Estate - Keller Williams Realty Lic#3015) My scripts? That is SEO! They have to find you first!
Jim: Great post. Very salient points on how to be working leads in the modern age.
Jim, I really appreciate your advice and mentorship years ago. Everyone should subscribe to your blogs. Some of THE BEST on ActiveRain day in and day out.
Felix
Matt Grohe Remax Des Moines CRS, GRI, ABR (Remax Real Estate Concepts) It is amazing how many in real estate listen to trainers that are giving techniques from 20 years ago..and calling it a back to basics... How ridiculous!
Huntington Beach Real Estate Blog - Felix Hung, Exit Beach Cities Realty (Exit Beach Cities Realty) Thank you for such kind words Felix. Times have changed, and we must acknowledge the new trends, and the appropriate tactics to deal with them.
You've always been a pioneer not a follower, so until I'm a pioneer, I'll listen and follow what you do! LOL.
Huntington Beach Real Estate Blog - Felix Hung, Exit Beach Cities Realty (Exit Beach Cities Realty) Thank you very much! I appreciate that.
Jim, good advice and a little training to boot. One should certainly get what you say. It all starts on the net.
Charles Stallions Real Estate 800-309-3414 Pensacola, Fl. You are so right Charles. My Atlanta real estate site continues to get over 3000 unique visitors a day even in a bad market we are still closing deals.