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4 Lead Generation Sources: Which Should You Budget for in 2014?

January 22 2014

for sale red mouseIn December, we explored how Virtual Office Websites (VOWs) can be used to generate leads. There are many more sources for online leads, though, so we're kicking off the New Year by taking a broader look at our options. After all, now's the time when many agents and brokers turn budget- and process-minded, and examine what is working for their business and their budget.

Some sources, like social media and Craigslist, only require an investment of time and motivation. But at the start of a new year, many real estate pros are more concerned about paid sources of lead generation and where--or if--they fit into their annual budget.

With that in mind, today we're going to take a look at four different sources of online lead generation. Each will be evaluated according to cost, time and effort, and quantity of leads.

Custom or DIY Websites

Do-it-yourself websites come in all shapes and sizes. They can be anything from simple Wordpress sites to full-blown custom designed web destinations. Some who take the DIY route plug-in a third-party IDX search like Diverse Solutions to their site, or use only an MLS or association provided search widget.

Others provided limited or no search capability. This is not necessarily a bad thing, however. I'm particularly fond of this website for local brokerage the Davies CompanyDavies Company. Why? Because it's clean, uncluttered, and makes it easy to find exactly what I need. There's no sense of being overwhelmed by property search options or other features--a feeling many generic template sites often convey.

Whether this style of site works for you or your company is up to you, however. Be aware that the level of involvement for this type of site will be higher than any other option because you will have to design it, build it, and market it all on your own. Hiring someone to do the work will still involve a large amount of your time. However, this option gives you the most control over your site and how it looks.

The amount you spend on a custom or DIY website is completely up to you. If you're building it yourself, it may cost next to nothing. If you're outsourcing the design work, you're likely going to be spending thousands of dollars.

As for leads, the quantity you receive will correlate with the amount of time and/or financial investment in marketing your website. This investment can include fresh content, search engine optimization (SEO) or search engine marketing (SEM). The more you market, the more leads you will get, but the more involvement you will have.

Third Party Lead Sources

Third party lead sources are services like realtor.comĀ®, Zillow, and Trulia that forward you lead information. Some offer buyer leads, and some offer seller leads. Those that provide both usually do so at separate costs.

A benefit of third-party sources is that the time and effort required is usually very minimal. The cost is moderate, as well, though this can fluctuate depending on the package or number of zip codes you purchase, and how many lead generation sites you buy services from. If you're advertising on multiple sites, things can get pricey fast.

You have some control over the quantity of leads you receive by purchasing additional areas or services, but be aware that your costs will increase. If you do not have any lead sources, this is not a bad place to start. Be sure to always check how the leads are handed out, and avoid sites that give the same lead to other agents. Consumers flock to third party portals because they're easy to find, user friendly, and often offer market information like recently sold that local IDX-based sites do not.

IDX Websites

IDX sites let consumers search local listings right from your website. Examples include solutions from Market Leader, WebsiteBox, and WolfNet.

IDX sites are by far the most popular option for real estate websites. This may be, in part, to their low time and effort threshold. Today, most solutions are "turnkey," meaning that they're already set-up and ready to deploy. Your only involvement would be to adjust the product to your needs--adding an agent or company bio, for example, or customizing email templates.

The cost of IDX lead generation sites can vary based on the solution you choose. Some products come with features like a built-in CRM, drip marketing, virtual tours, and lead capture capabilities to help you manage your leads more effectively. Decide which tools are most important to you before choosing a solution. We recommend seeking out solutions that offer advanced map search and information like school and neighborhood data. (See our article Choosing an IDX/VOW for more on this topic.)

IDX websites offer a steady volume of buyer leads all month. In fact, these sites can be very profitable, particularly for brokerages and teams. Single agents may find themselves struggling to follow-up on the volume of leads that IDX sites can potentially generate.

Virtual Office Websites (VOW)

While Virtual Office Websites, like Quantum Leads, are similar to IDX sites in many ways, they differ in one important way--the amount of market data they offer customers. IDX websites only provide data about active MLS listings, but VOWs offer information on all properties in an area--both for sale and not. Consumers can access information on active, pending, sold, and even expired listings. A VOW can provide complete data for any individual property, too, including when the seller came on the market, at what price, how many times they listed, and more.

Like their IDX cousins, VOWs require little involvement, and are comparable in cost. VOWs, too, can be more than just a lead source and may offer tools like a CRM, drip marketing, and lead management capabilities.

Virtual Office Websites offer a steady volume of both buyer and seller leads all month. Like IDX sites, they can be very profitable. Unlike IDX sites, VOWs provide your leads with market information that they usually seek out on third party sites. Note that because consumers are legally required to register to access this information, less serious searchers may turn away. However, those that do register tend to be higher quality leads that are actively planning to buy or sell a home in the near future.

For More Information

Other articles of interest: Top Producer IDX | Birdview IDX