Confessions of a Master Listing Agent
Before you tear into this, let me warn you: this is a raw transcript of an interview with Matt Jones. It’s an uncensored, detailed look into one of the most potent listing strategies I’ve ever seen. I admit it may not be the easiest read. But after you look through it, I can promise you’ll walk away with an endless supply of useful strategies and ideas.
Matt Jones: Truthfully, I have only been in [real estate] a little over 17 months but if you think about it I did a few things right when I started. I had a business plan. While I was in licensing school, I read every book that I could find about how to sell houses, how to build a real estate practice and all the ones that you guys have seen. So I had a business plan, I decided it seemed to me like it would make a lot more sense to “own the car lot than to sell the cars”. So I knew I wanted to list. Plus I don’t have the patience to deal with buyers. So I wanted to really heavily emphasize that. I wanted to be the top listing agent in town. I had all these goals when I started, and I did all the normal stuff. I started with my circle of influence. The first thing I did is to build a database with my circle of influence. And I worked that system and did consistent prospecting of my circle of influence. They [the experts] said you should find a farm of about 500 homes. I said well then I will find 1500. So, I went and found the area I wanted to list in town, and I basically staked that out. I went and got the tax records and put them all in my database and did mailings to them. I was doing all the stuff you are supposed to do and handing out business cards by the truckload. I was volunteering for all the duty I could get. And everything was great about the business plan except for one problem: I didn’t have any real estate leads.
That kind of shoots a business plan in the foot. So I got real desperate about four months into it because I had set aside about six months of income. I said, I was either going to make it, or not, in six months. I started in June, so basically June, July, August and September, I worked non-stop and had essentially nothing to show for it. And I said I have got one huge problem and that is I have no leads. So I went on the Internet looking for real estate marketing tools and there were a thousand snake oil salesmen trying to sell me their system “this is going to give you leads… and this is going to do that…” Well, ultimately I decided that what looked best to me was getting a call capture system. Only I didn’t find out about you guys initially, I found out that there were people selling hardware and software to do your own and I didn’t really want to take time out to set that whole deal up. I didn’t want to be an I/T guy, nothing personal; I wanted to do real estate. So, anyway, after about the second full day of looking into it…and being at the brink of setting my own system up, I discovered there were some companies that actually did it for you. So I called you guys and I called two other companies. I was very impressed with your company, and I was frankly under-whelmed with the other two. So I decided to give it a shot. And I really figured I was going to have to change everything [the sales literature]. You know, after 20 years of selling and training sales people, I figured… well, most of the sales stuff you get, let’s be honest; most of the sales stuff you get is pretty crappy, right? (Sure) And you know its “old school” or it doesn’t work. Anyway, I pulled this out the box and basically did it exactly by the book. I couldn’t find anything to tweak. I figured I was going to have to tweak a lot. But I plugged it in and it was like all of a sudden my business began. So, I’ve REALLY only been in business for 14 months!
Someone from the panel: So what was it originally that you advertised to get your new leads?
Matt Jones: Pictures of houses in homes magazines.
Gary: You’re own or other brokers?
Matt Jones: Mine and company listings.
Matt Jones: I had some listings at that point but I didn’t have enough to fill up a page.
Gary: In those 14 months, Matt, how many houses have you listed?
Matt Jones: I have listed 113.
Gary: 113 in 14 months! How many of those [houses] have you gone out to?
Matt Jones: I probably went out to about 20.
Gary: So over 90 of them you have listed over the phone?
Matt Jones: Right.
Gary (to the panel): The first time he told me that I was pretty astounded by the whole thing. I hadn’t really heard of anybody listing houses, let alone 90 houses, over the phone.
Gary (To Matt): I’d like to dig into this and have you tell us how this all works. I mean when you make your listing presentation, is it a one call close? When you get them on the phone is it a done deal?
Matt Jones: No. Not necessarily. There’s not any magic “one way” to do it because every customer is different.
Matt Jones: But there are some things that never change. First off, I think that fundamentally, you have got to come to a place in your own mind…. I was talking to somebody the other day about… what I’m about to say may sound arrogant… I guess I’ve got one of those personalities that I can walk into a room and a third of the people will hate me before I say a word—it’s just the way I walk, or carry myself or whatever. And a third will like me and a third will wait to make up their minds. And so I guess somehow I carry this kind of arrogance, I don’t mean to, but it comes across and I really don’t mean it that way. And I don’t want this to sound that way [arrogant] but I was talking to somebody and they asked, “How can you charge 8%? You know, how can you do it?” And I thought to myself, if you can’t come to a place in your mind that you’re the best person… if you can’t come to that place that you know you’re the best person to list their house, forget about the commission, if you ‘re not there yet, you’ve got nothing to sell. Why should they list with you? I mean, if you don’t have the best thing to offer, how can you pitch it? And how can you pitch it with confidence? So, you know you need to get to that place first. I felt like I had to get to a place where I had something to offer that nobody else had to offer. And I had to get there before I started. So that is fundamental, I think, before you do anything.
Matt Jones: Hmmm…my greatest competitive advantage?
Gary: Why are you the best person to list their house?
Matt Jones: Because I’m going to get them more money, net, and I’m going to sell it [their house] in less time. Really, they [sellers] care about three things: they care about selling their house in the least amount of time, getting the most money and the least amount of hassle. Maybe there’s some other new need out there that I haven’t run across yet, but those are the needs I hear about every time. And with the traditional model, lets assume that the first two are a given—it’s still going to lose on that third point, regardless, because it’s going to be a hassle. I mean, has anybody every gone to a listing appointment at 6 o’clock at night? You go there and they all come storming through the door, and you’ve got an appointment. So you’re sitting there ready to do your presentation, and the kids are bouncing off the walls, they’ve not eaten, they’re screaming and fighting. The dog is barking, the TV’s blaring, the phone’s ringing, the house is a pig sty, and they’re embarrassed about the house and kind of a little bit ticked that you’re there because they’d really rather be doing anything else. Nobody’s eaten and you’re supposed to come invade their house and spend an hour and a half going through your stupid little flip charts or your power point presentations while telling them how great you are and how many gazillion dollars you’ve done and why they need to list with you. That is not hassle free. I mean, you start right off on the wrong foot. So, after a few of those, I said there’s got to be a better way.
Gary: Ok. Well, take us through a typical dialogue with a seller.
Matt Jones: Well….
Gary: Let’s say I’m a seller and you just got me as a lead, ok? Let’s say you just got the lead, what is the next step?
Matt Jones: Let’s say I’m doing an initial CMA.
Gary: Ok. Do you do that before you even call them?
Matt Jones: Ok, most seller leads are going to come to me as a “What’s my house worth?” lead. That’s how it [a seller lead] comes to me, almost without fail. Unless it’s just a lay down lead [sales term] saying “I need to sell my house can you help me?”
Gary: But what’s the first step you take with that lead?
Matt Jones: I’ll pull up the market data on the house, I’ll pull up the tax record and I will basically get an idea of what the range is for that particular subdivision.
Gary: Before you call them?
Matt Jones: Before I call them. Yeah… Absolutely. And then generally what I do is I’ll call them up and introduce myself… I introduce myself just by my name—I don’t introduce myself with a company because I’ve found that it comes off more as a pitch if you say I’m so and so with so and so. I don’t need that “with so and so” to feel comfortable, I feel comfortable anyway.
Gary: Ok. So you leave the company name out, “Hey, this is Matt Jones.”
Matt Jones: So I just say this is Matt Jones, you had contacted me through my web site or you called our hotline about the value of your house and I was trying to touch base with you, did I catch you at a bad time? Ok. Most people are like…[sidebar] has anybody read Question Based Selling?
Gary: They mismatch and say, “No, no it’s a fine time.” (Gary gives complete title of book and author’s name.) Great book.
Matt Jones: So I always ask them that and then they usually give me permission. If they say ‘Yeah, it’s a bad time.” “Great, well what would be a good time? I certainly don’t want to interrupt you.” And then the next time [I call], I’m invited.
Gary: But if they “No it’s a fine time.”
Matt Jones: “No this is a good time.” Well, then the first thing I want to find out is if the information I got is right. So I do the Stevie Wonder thing. I say, “Pretend I’m Stevie Wonder and I can’t see your house… give me an idea of what your house is like.” (They don’t remember what they filled out anyway.) “Tell me about your house.” (Meanwhile I have the MLS and their CMA open in front of me, and if I’ve got to tweak it or something I can. They’re telling me about their house and I basically let them talk. And I let them give it to me for five minutes. I’m just kind of going “Um-hmm, Ok, yeah, Ok”. At some point they start feeling like… they begin to start to feel self-conscious because they’re doing all the talking. I want them to feel that way. And so then I ask them another open-ended question, something about their house, and let them do it again. At some point I want them to run out of gas. And then I ask them, “It says here you are looking to sell within the next 90 days (or whatever)? From what you are telling me about the house, it sounds like a great house. Why in the world would you want to sell it?” So I want to get all the information. I want them to give me enough rope so that, you know…
Gary: So they can hang themselves. You say why in the world would you want to sell? Sounds like a great house. Okay.
Matt Jones: “Why would you want to sell?” Basically my idea is open-ended questions to get them to dump. I want them to do information dumping. Because meanwhile I’m filling in blanks on my database. I mean, I’m not telling them that I’m just doing it. Again, I get all the information I can, because most of the time, if you let people talk, (which we salesmen don’t like to do because we’ve got to be in control) they are going to tell you exactly what their hot buttons are. They are going to tell you exactly how to sell them. They really are. And so they’re going to tell you “Yeah, well we listed it with it so and so…” or “Well, the last agent we had, blah, blah, blah.” Just let them tell you everything.
Gary: Ok, so keep drawing it out of them until they are out of gas.
Matt Jones: Out of gas. Until they are truly out of gas.
Matt Jones: Ok then I say, “Well listen I’ve got a lot of information here on the computer about the house…” and I maybe read them a couple things back to make sure I’ve got it right, and I am starting to get into a dialogue with them. We are both talking.[Sidebar about how Matt does his CMA] Now what I do for a CMA, because within a subdivision, there will be pretty tight restrictive covenants in our market, so unless it is an old neighborhood (like 60 years old where everybody just did what they wanted), pretty much all the houses are going to be more or less the same quality and basic construction type and amenities and stuff, in the same area. So I’ll find out what the square footage of the house is and I’ll basically pull up everything that’s sold in the subdivision in the last 4 years and everything that is active in that subdivision in that same square footage range. Generally, I’ll have 10 to 15 properties or more and then I’ll do a subtotal—in my MLS you can choose a display and have it subtotal at the bottom. So it will give me an average number and I’ll take the average. And I go up 5% and down 5% off of that average and then that is my CMA range. You know I found out early on, you could make a CMA say whatever you want but if you’re going to be intellectually honest to the process you really need to find out what the market is saying about that area? Get the average and then set a range, 5% up or down or maybe less depending on the price range of the house.
So I get my range and generally, I ask them, “Just out of curiosity what are you thinking in terms of the value of the house?” because I want to find out before hand if I am going to be blowing them out of the water. And most of the time they’ve got a fairly good idea of what the house is worth. If they come in a lot higher, I say, “Well that’s interesting. Now let me ask you something. I’m looking at all of homes that have sold…now you are wanting $138,000.00 for the house and I’m showing that nothing in your square footage, in the last 5 years anyway, has ever sold within $10,000.00 of that amount. Help me understand what it is about your house that brings its value up because I need to find similar properties.” And we look for comps together. Ultimately then I say, “Well it really comes down to a range of X to Y.” I don’t like to use round numbers because it doesn’t look as official. Even if it comes out $120,000, I am going to do $119,800. Ok?
You don’t want a round number because it seems “not legit”. Then I will say, “Where in that range you can actually sell your house, really depends largely on the approach you use. Does that make sense?” I want to get their head nodding. “No it doesn’t make sense.” “Well you know there are 835 real estate agents in our market, so I guess you could say there are really 835 different approaches to selling a house, right?” Their heads nod again. “But when you boil it all down, there are really only two ways to sell a house, and all the other ones fall into one of these two categories: You can either sell a house by price or you can sell it by traffic. Does that make sense?” Usually the answer is no. I want them to have to ask me… I want to involve them so they think it is a dialogue. I don’t want to be just doing a info dump on them. So when I ask, “Does that make sense?” they usually say “Well no, not exactly.” Or I let them guess. And then whatever they guess I say, “Well that’s pretty much it, except…” because they are generally wrong. I say, “You know the bottom line is house prices are not like stock prices. You can’t go on to the computer and say it’s $43.38 today… that’s how much it’s worth. A house is subjective. So it’s going to be worth somewhere in the range of say $110,000 to $120,000. Now where are you going to price it? Basically, the traditional approach says we go to the low end of the range; we go to $110,000 and we sell it by price. If it doesn’t sell in a month, I’m going to come back to you and I’m going to ask you to reduce the price. We’re going to drop it to $109,000.” And they are going, “Yeah…” Some of them are replaying history. “And if that doesn’t work in another month I’m going to come to you and guess what we are going to do?” I want them involved. “Guess what we are going to do?” “Uh…lower the price?” “Yeah, exactly! If that doesn’t work we’re going to cut off your arm an inch at a time until eventually we suck in some bottom feeder.” And I am using all this kind of language to make it a very unattractive approach. You know “suck in some bottom feeder” that just…I use certain sound bites that I have tested and they work so I use them. But that sound bite really works (“suck in some bottom feeder”) because they don’t want to sell their house to some bottom feeder. “Now that will sell your house but to be honest with you, using the traditional approach is a very expensive way to sell it.”
“What I would recommend, and what I have been very successful doing is using another approach, completely. Basically what we do is instead of pricing at $110,000 we go to the other end of the range and we are basically going to raise the price almost right at 10%. But what we are going to do is we are going to build into that, a bribe. We are going to build into that an incentive to pay out to the other agents. The bottom line is that price does not sell houses—realtors sell houses. So what we are going to do is raise the price up to the high end of that range, and we are going to build into it an additional commission for the real estate agents… we’re going to give them incentive to show it. What we are going to do is we’re going to sell your house by traffic.”
Now if you notice at this point, somewhere along the line I started shifting into assumptive language. We’re going to sell your house and what we’re going to do is this and blah, blah, blah…because now we’re a partnership together and we’re already doing it. “This is what we’re going to do” is not like, “(in whiny baby voice) will you please, maybe, if I cut my commission enough, let me interview for the job, of possibly, please, maybe listing your house?”
Gary: Best agent for the job doesn’t communicate that.
Matt Jones: Right. And then I do a classic take-away close. I say, “But the bottom line is that this approach may not be for you—I am equally comfortable with either approach. We can use the traditional approach (I have already handed them the number we are going to use with the traditional approach), or we could use the traffic approach. Whichever way is better for you.” I have also given them a choice of two yeses, not a choice of a yes and a no (an alternate advance).
This is my basic listing presentation. I have several sound bites that I weave into the presentation. One that really works real well is “Have you ever seen that movie with Kevin Costner and the baseball field out in a corn field?” They say, “Oh, yeah. Field of Dreams.” Everybody’s seen that movie. “Your remember that line in there? ‘If you build it they will come.’” They all remember that line. I say, “Well in real estate it works like this—if you bribe them they will come!” And they will always laugh. Another one I use is, “Listen, some people have got an ethical problem with the idea of bribing agents. And I certainly don’t want to push something on you…I just know that statistically, this approach will sell your home in half the time and net you more money. I’m equally comfortable with either approach, but the bottom line is they don’t have the same results.
I can tell you if you use the traffic approach, your house is going to sell in statistically 55% of the time on market and it is going to net 2.7% more money, net, after the additional bonus, it’s going to net 2.7% more money! But remember, I’m comfortable with either way, which way is best for you?”
Gary: Did you use homes in the same zip code, same floor plan, and same square footage [to derive the stats]?
Matt Jones: No, our broad market versus my personal stats.
Someone on panel: So do you usually pull MLS?
Matt Jones: Absolutely.
Gary: Just for that specific area? In that one if you get a little apples and oranges comparison—it isn’t really an apples to apples comparison but you are talking about exact…
Matt Jones: I’m going to give you a prime example, if they’re not buying it you can tell.
If you’ve done a lot of telephone sales you can tell if their heads going like this [nodding] or not. You can tell—you can’t see them but you can tell. Well the bottom line is that if I never give them too much information. But if I feel like I need more information, Jesus taught in parables, people like stories. I’ve got several stories over the 17 months.
So I say listen let me give you an example, I had a client and he was an “expert” in every field to include real estate. So I gave him the different approaches and he had this nasty house out in the middle of a bad subdivision called College Downs. And he bought it when he was a Lieutenant in the Army and he hadn’t put a dime in it since. He’s been a slumlord for the last twenty years and the house is about to fall down and the thing is nasty, it needs everything. And he asks me what we should do and I told him we should price it at $66,000.00 if we use the traffic approach. If we use the traditional approach we should price it at $60,000.00. He decided to go with the traditional approach. No problem. So about 4 months went by and the buyers stayed away in droves. I showed it every chance I got but there are not a lot of players for a house like that. Anyway, he called me up and said, “Listen, what do we need to do to sell the house?” I said, “Well do you remember what I told you when we listed it?” He said, “Well no refresh me.” “I told you that I thought we should price it higher, and that we should build in a bribe.” I used the ‘b’ word. Now I know some people think, “Oh my gosh…you can’t say that!” But it is what it is and they know it and they don’t mind and they like my actually being straightforward about it and not calling it “an additional incentive for the selling agent”. It’s a bribe—we’re going to bribe agents to drag people to their house.
Someone on panel: Question. I’ve been sitting here thinking on this. So what I am hearing then, is maybe on houses I’m having an especially hard time selling, going back to them and saying let’s bump your house up? If we bump your house up from say 200 to 202 or 203 but put back the 4% fee at the selling agent?
Matt Jones: Yes. I guarantee you that will sell the house. So he says, “Well, should we re-carpet it… should we repaint it?” I said, “Well you’ve already said in the listing that the price includes new carpet and new paint, buyer to choose colors. I mean you have already painted it you just haven’t spent the money yet. Why don’t we do this, why don’t we raise the price and the commission?” “What do you think we should raise it to?” “I think we should raise it to $66,000.” So we raised it to $66,000.00 we raised the commission to 8%. That day it showed twice. The next day I got an offer on the house. We sold it for $66,000.00. Guess what? Did it close for that much? Well that’s what the offer came in at but the appraisal caught us. We were only able to sell it for $64,500. That’s not too bad. So here’s what we did: we added $1200.00 to the commission and instead of selling it for $60,000 we sold it for $64,500. Do the math. He’s better off.
Gary: You said you have three stories?
Matt Jones: I have several stories.
Gary: Give me a couple more. I want to get them on the tape. These are good!
Matt Jones: I had a house that was an expired. We have an area of our town that’s called Kornbow. What a name for a subdivision—Kornbow, with a K! It’s just a terrible name. Well it is adjacent to a subdivision called Bonnie Dune and there is a line of demarcation that’s like a DMZ right down the middle. Now in Bonnie Dune they basically have drive by shootings and stuff. They openly deal drugs and do prostitution right there on the street, that’s Bonnie Dune. The adjacent neighborhood is Kornbow, but there is that DMZ called Johnson Street running right down the middle. Now this listing was at least on the good side of the DMZ, but not by far. Ok, so I’ve got this house and it’s already been listed by two other companies (each for a six-month listing). By the way, I don’t do anything less than a one-year listing. And it’s already been listed with two other companies and they’ve had like no showings. Now interestingly, the guy trying to sell it is a broker himself in Boone, North Carolina. And he is pretty frustrated so he and he found me on the Internet and I guess he’s interviewing me and I basically went through the same pitch with him. He instinctively knew that this was what needed to be done. It had already been on the market for a year, they’d had no offers they’d had it shown maybe once or twice in a year. Well I listed it and raised the price. Incidentally, it had started somewhere in the neighborhood of $68,000 or something and they had incrementally “cut off his arm an inch at a time” and he ultimately got it down to $63,000. And it had not sold. Well I raised the price to $70,000 and I raised the commission. We sold it twice. Well how did we sell it twice? Because the first deal fell through at the last minute. We sold it twice in less than 90 days. We raised the price, we changed the sign in the yard and it sold it twice. So, does bribery work? Absolutely! The bottom line is that if you’re a realtor out there trying to feed your family, all you care about is making sure you can pay your bills. I mean you’re not trying to make a fortune off of some guy. There is no fortune to be made on a $70,000.00 house.
Gary: How do you get the 12-month listing? Do you present that or is that an assumed part of the presentation?
Matt Jones: If somebody asks me, “How long are you going to list it for? I don’t want to list over 90 days.” I say, “Well, actually you’re not going to like this very well then—because I don’t list for less than a year. But I will do you one better than that. You can list it today and if tomorrow you want to fire me you’re welcome to fire me.” I have had two takers…two people have wanted out. I’ve got a cancellation clause in every one of my listings. Why make it an issue if it’s not one? But the bottom line is we’ve got 310-day average days on market in our town. Why in the world am I going to take a listing agreement for a shorter term than our average DOM? That would be stupid. What am I going to do, get a six-month contract and we’re in escrow I’ve got to stop everything and re-list the house? That’s not too smart.
Someone from the panel: Do you use the seller pledge agreements from Century 21?
Matt Jones: I’ve never even seen one, sorry. I’m new with Century 21. I use this presentation—that’s all I use.
Someone from the panel: Now when you are dealing with them, as you said, you say your name but you don’t push the company at all? Are you concentrating on the price, the emotional factor, the bride and can we get it done…
Matt Jones: The reason I don’t sell the company up front is because I don’t need to hide behind the company. Most people do it for confidence reasons. “My company is the biggest company in town and they sold more houses, blah, blah, blah and I’m a gazillion dollar producer.” Sellers don’t care about any of that junk, in my opinion. They care about what are you going to do to sell their house quickly and for the most amount of money with the least amount of hassle, in my opinion.
Someone from the panel: What if there are some state laws or board regulations that require that they introduce yourself as a realtor?
Someone else from the panel: I think that ‘s generally more with print advertising.
Matt Jones: I’ve not gotten busted on it yet. Certainly you should abide by all the laws and board rules. I am not aware of any in my market.
Someone from the panel: Matt, do you have a cancellation fee if they decide to do that?
Matt Jones: Well I do but I’ve never charged it. I’ve only had two people back out. One person backed out because they were getting a divorce (that’s why they were selling it), and they reconciled so I could hardly hold her feet to the fire you know.
Someone from the panel: What about if it’s just a withdrawal? If they just decided, “We’ve decided not to sell our house?” And you’ve put $500.00 in marketing?
Matt Jones:: Yeah, but you know the truth is…let’s be honest…the reason we advertise houses is not to sell those houses. The reason we advertise is so we can attract buyer leads. That’s the truth. So do I have it built in there, is it in my contract that I can hold her feet to the fire? Yeah. Would I? Probably not. Because the bottom line is I’m getting a heck of a lot more…there are certain houses I’m going to continue to run and “oops, I forgot to take that out of our ad” because the phone rings off the hook on that one.
Someone from the panel to the panel at large: I think the important thing with your question is from a legal standpoint, and it’s been tested. You must disclose it up front if you do a cancellation fee. You cannot go after them saying hey I just spent $800.00 in advertising, and you’re going to pay it. And if you force that, they are going to take you to the state or the board and they are going to wax you, if it is undisclosed. You are better off, ultimately, just taking that person and saying hey thanks for your business. I appreciate it. Send me a referral. In our Tennessee contracts, it’s built in. I always ask our agents, “What do you want me to do?” And then I’ll call the people and say, “Look, you know it’s built in. This is what you owe us.” Or if the agent says, “No I don’t care”, then I just call and say thank you for allowing us to list your house. It just depends on what the agent wants. That’s not to take away from what you’re saying.
Matt Jones: No, I mean the bottom line is that I don’t want to go negative with them. I’m getting a whole lot more out of that advertising than they are. Truthfully, that advertising is for me—it’s not to sell their house. What’s going to sell their house is bribing other agents.
Gary: Ok, in the midst of this presentation that you’re going through, you’re presenting the…I want some examples of objections, issues and hurdles you’ve had to overcome in giving presentations. Because I think you are so good at this presentation that you probably get to the end of most of them without any. It’s they just choose the traffic approach. What happens when they say yes? Do you drive them to that website?
Matt Jones: I say “Listen, do you have access to the Internet while we talk on the phone?” “Yeah.” “Ok, well I tell you what. Why don’t I hold and you go get logged on and let me give you a web site. When you’re ready for the URL I’ll give it to you.” And I walk them through the online listing while they’re hot. No cooling off period to forget it. They’re ready to list, so let’s list, because they’ll be done in 5 minutes.
Gary: “Matt, shouldn’t you come out and look at my house?”
Matt Jones: “Well, everything you told me was true, right? Well, then we’ve really nailed down the range of value for your house. I mean, if it will make you feel better I can come out and look at your house but it’s not going to change the value. The value is whatever the computer says it is and that’s why I asked you all those questions.
Gary: Do they come to your office and get the sign and put it up?
Matt Jones: [Laughing] No. I hire a company to go put the sign up. A third party handles the sign and the lock box. I kid you not—I have double-ended a transaction and never seen the house.
Someone from the panel: How did you get your buyer then?
Matt Jones: They came to one of my buyer agents. Good question though. “He’s a liar! He’s a liar!” [Laughing]
Someone from the panel: No, I wasn’t thinking that. I thought maybe your seller’s were holding their own open houses or something.
Matt Jones: No, I don’t do open houses. I have plenty of buyers.
Someone from the panel: How many of these seller’s actually ask you to come over and look at their property?
Matt Jones: Occasionally. Generally older ones, they’re lonely and need a friend.
Someone from the panel: Do you list room sizes?
Matt Jones: No, room sizes don’t sell houses.
Someone from the panel: No, but in our area you have to.
Matt Jones: Well then I would hire a third party to go measure the house because I wouldn’t do that.
Someone from the panel: Couldn’t you work out a deal with the appraiser to go out?
Matt Jones: We’re getting a lot of bad VA appraisals so I am trying to pre-appraise properties. It’s the old “glass half full” now, instead of coming back after the sale and getting the “glass half empty”. You know what I mean?
Someone from the panel: Do you do virtual tours on your houses?
Matt Jones: No. Well I’m trying to do that, but it is one of those things that are not as high a priority as I would like. I’m trying to find somebody to do it.
Someone from the panel: Just because if you had that as an issue, in terms of that interaction, they want that with you, then you have your marketing coordinator go out and shoot the house.
Matt Jones: I could, yeah. In fact I’m starting to do that, one of my buyer’s agents is charging me $30.00 a piece and they’re going out there, because my company that hangs the lock boxes is taking to long. So they’re going out there, and so while they’re out there, they are also taking photos of the houses. We are not doing the virtual tours; we’re doing simple, multiple pictures.
Someone from the panel: Right, but pictures of the interior of the house?
Matt Jones: Some of them you really don’t want pictures of. Let’s be honest, unless you guys have just got all “cream puff” listings, but all of mine aren’t.
Someone from the panel: Are you looking to work your price up?
Matt Jones: I initially decided I was going to be high end. And after a while I have decided that’s not really where I want to be. But, I don’t take anything lower than one standard deviation below the average. Do you guys know what I mean by that?
Matt Jones: Ok, you take everything that sold last year in your MLS and you copy and paste the one-liners into an Excel spreadsheet. Get rid of all the columns except for the price, so all you’ve got is this big long list of 4,000 prices in ascending order. At the bottom of that you can do a statistical function called average on your spreadsheet, [=average(A1:A4000)]. You can also do standard deviation [=stddev(A1:A4000)], which is another statistical function. Those two are really the only ones you need. Here’s what you will do. Let’s say the average house is $110,000 and let’s say the standard deviation is $40,000. Now picture a big bell curve. The centerline of the bell curve is the average. One standard deviation up and down is going to give you 85% of the whole market. It’s going to take you to 7.5% off the bottom, 7.5% off the top, or 85%. Do you see what I’m saying? That’s one standard deviation. Basically, I concentrate on one standard deviation either way from the average and if I happen to get something above that on the high end great, I’m not going to turn it down, but I’m not going to waste my time on junk. That would mean anything below $70,000 in the previous illustration. A second standard deviation would take you to 93%.
Gary: In your phone dialogue, when you’re going through this presentation, do you get any objections? Like, “Don’t you need to come out and see my house?”
Matt Jones: If that’s going to be a deal breaker, guess what, I’m going to go see their stupid house.
Gary: I understand that. But I want to know what type of barriers do you encounter? Or is it just because you staged this thing so well with the standard “cut your arm off an inch at a time” and “suck in the bottom feeders” or the “traffic approach”? Is that whole presentation lined up so well that you don’t wind up with resistance at the end of it?
Matt Jones: Well, here’s the thing. This is my philosophy of selling anyway. Remember I came up through the old school– you remember old school sales? Some of the principles of old school sales still work. But some don’t. In the old days, they would throw you an objection and you would have the rebuttal, and then you try to hard close them again. And when they said no, and threw up an objection, you would overcome it and then you would slam them again. That’s old school. It is fun, some times, but it’s not very productive.
But to answer your question, sometimes they will lead off with, and I love this, they’ll lead off with, “Well how much is your commission?” Because they assume all realtors are the same. Now I have found that the worst thing you can do is to be evasive because they can tell. Buyer’s can smell evasiveness. And with a listing, your buyer is the person with the house. He’s buying your listing presentation. So I say, “Well actually I try to get 100%.” And they are like (sucks in breath) and then they realize it’s a joke. Then I say. “But I’m negotiable—you know, prices and commissions are negotiable but that’s not important right now.” I basically just stop it dead in it’s tracks. And I’ve had somebody say, “Listen, so and so is going to do it for 5%.” And I say, “Going to do what for 5%?” And I have had them ask me that. And I say, “What are they going to do? If all you want is somebody to put your house in the MLS and stick a sign in the yard why would you pay them 5%? Why would you do that when you could list it for a flat fee? Heck, I’ll charge you $2,000.00 flat fee I’ll put it in the MLS for you. You got a VISA? No problem.” But I think if you set expectations, if you let them know ahead of time what to expect so there are no surprises there are not really going to be objections. And if you really do the time to find out what all their needs are, and you make sure you cover all of those, then it’s just basically just a formality. And then you give them a reason to act now. I say, “Hey, I don’t know if you did this on purpose or not but you picked a perfect time to sell.” “Really, why is that?” “Because our ad cut off for Homes and Land magazine is only next Thursday. And if we get on this right now, we can probably just barely catch that cut off date.” So there needs to be a reason, everybody will procrastinate, so there needs to be a reason to act now. “Well I was thinking about listing in the spring.” I say, “That’s a great idea.” Then I say, “Let me throw another idea at you, while we are talking about great ideas. As you probably know that is the most popular time to put your house on the market. That is when everybody puts their house on the market. Now I used to trade the stock market. Have you ever traded the stock market?” They say, “I’ve got a 401k.” “Great, perfect. Now let me ask you something. When everybody is buying a stock what should you do? Sell. You should sell it because there isn’t anybody left to buy. When everybody is selling what should you do? You should be buying; you know, the contrarian investment strategy. It works. By the same token, right now, inventories are at an all time low. Why? Because we had one heck of a summer buying season. Our inventory levels are very low right now. So guess what? If you put your house on the market now, you’re going to have very little competition. Last spring inventories were 29% higher than they are right now. Would you rather have your house up side by side with an extra 200 houses or would you rather compete against very few? It doesn’t matter to me. It’s up to you, but if it were my house, I’m going to tell you, I would want to be up against as few people as possible because I want to get the top dollar for my house; what about you?
Someone from the panel: Yeah, but you’re dealing with military people.
Matt Jones: I’m dealing with every kind of people.
Someone from the panel: They [military] have specific time frames when they have to transfer schools, kids and what not. What is the rationale for them to do it today versus when they know they will be transferred in the spring? If they sell now, where are they going to go?
Matt Jones: That is a good question, now let’s run the clock on this, ok?
You need to move in March you said right? [This interview took place in early December] Ok, now what is the normal escrow process on a VA loan? What, 45 – 60 days? Now go back 60 days from March, and now we are in January. Now, how long is it going to take me to get the marketing actually ramped up on your house? It’s going to take me a good two weeks, depending on where we are at in the ad cycles of the magazines, it may take 3 – 4 weeks before we’re really at 100%. We can get it in the web sites immediately. But that is going to leave us less than a month to get a buyer for your house. We don’t have a lot of time. If I do my job flawlessly and we get it on the market today, we might have you out of there by March and we certainly don’t want to wait until everybody else and their brother comes in the market.
Gary: Ok, now listing presentation in the spring when everybody and their brother…yeah beautiful keep it rolling. In the spring, there are more houses on the market you don’t have the urgency of “Would you rather compete against 200 less houses?”
Matt Jones: I say, “Guess when most of the buyers come on the market? You got it, Spring!”
Gary: The other side of the same coin.
Someone from the panel: Are you finding that your competition is adapting to you? Are you getting objections thrown up by competing realtors? In terms of they are planting the seed in the sellers’ mind?
Matt Jones: No the truth is there aren’t any competing realtors. I mean there really aren’t. We’re in such virgin territory, and it seems to be that way everywhere, that if you have half a brain and you work hard, then good grief you are so far ahead of everybody else! I mean it’s the truth.
Someone from the panel: So you got about 70 active listings right now? What is your nearest competitor right now in terms of listings?
Matt Jones: 12 to 15.
Someone from the panel: Yeah, you’ve got no competition.
Matt Jones: No I don’t. Yeah, but even…some of them get as high as to get in the mid 20’s. But the truth is I am in an office of 20-something agents and I have very few seller calls (in other words, sellers calling up griping to my broker). Actually have the second most, of course only about 4 of our agents even list. I am the number two in complaints. I have had two complaints to the broker in the last year. But I actually managed those because I didn’t set any expectations for them. If you’re looking for a friend you got the wrong guy. I figure the best way we can become friends is I sell your house quick and get you a lot of money for it. My business is not built around a relational model of real estate, mine is just strictly business. It is just inventory, it could be widgets; mine is built around that kind of a model.
Gary: In this presentation, this phone dialogue, are there any other scenarios or challenges or anything you’ve ever encountered that you can sort of draw out as another example. I know I’m kind of reaching because you’ve covered a lot of ground. But I think that presentation is so unique to me, I’ve never heard of it being approached this way and the ability to list 90 plus houses over the phone. If I was in real estate I would much rather sit at home in my shorts at the kitchen table and be doing that then I would running around to their houses. In this presentation though, any other challenges or scenarios that you encountered that come to mind?
Matt Jones: I think that one of the biggest challenges is somehow we have created an impression—I say we—the industry has created an impression that seller’s want us to call them every week or two weeks and tell them all about their house and what we’ve done and blah, blah, blah. What I try to do in terms of setting expectations is… [Sidebar] First off, up front, setting expectations is everything. I say, “Listen, you didn’t hire me to be your friend. Now when I sell your house quickly and get you a lot of money for it you are going to be my friend but the bottom line is, that is not why you hired me. You hired me so that I could sell your house quickly and get you a lot of money for it and give you the least amount of hassle. Now I’m going to tell you up front, if you’re looking for somebody who is going to call you every week and tell you everything about your house, I’m not your guy. Now if all you’ve got is three listings you can do that, that’s three phone calls a week. Sure you can put that in your schedule. But if you’ve got 70 active listings, there’s no way. The bottom line is my job is to sell your house and if I’m busy calling every one of these 70 people I don’t have time to sell your house. So what I do is I post a private web site, its called IsItSoldYet.com. Every week I update all of what I have done to sell the houses that I am marketing. I update it every week. If you have any questions, I try to take every one of my phone calls unless I’m on the line and then I’ll return your call. I always return my calls. I prefer email because I generally do that before you get up. But email me, call me and I will be happy to update you.” Basically I set expectations up front that I’m not going to be calling them up and asking them how their kids did in soccer this week because I don’t have time to do that. Because the most important thing I do is prospect. That is the most important thing. It is the only thing I do that makes me $1,000 an hour. And if that’s the case, then prospecting needs to be the highest priority on my day.
Gary: What is the web site address for your listing agreement?
Matt Jones: For my online listing site? It’s called http://List-EZ.com.
Gary: Ok, so you’ve got http://IsItSoldYet.com, http://List-EZ.com, http://FavoriteAgent.com?
Matt Jones: And then I have DiscountBuyersAgent.com. That’s the idea I thought would be a no-brainer and it would make it easier to work with buyers, but the market just didn’t want it. Basically you find your own house, I’ll do the deal for you, I’ll give you back 1% at closing in cash. It’s like FSBO for buyers. I can’t find anybody who wants it. I’ve had one taker. Basically if I don’t have to show you more than five houses, I will give you the tools and you do the searching you do the drive-bys. Then I will let you into up to five houses, we do the deal and I’ll give you 1% of it commission back at closing.
Someone from the panel: I am curious, how do you actually, besides your home listings, how do you incorporate your 800-property hotline in it? Do you tell them anything about the number of buyer calls you get on the 800-number in your phone listing presentation?
Matt Jones: Good question. If they ask me. It is one of those things—don’t ask don’t tell. If they don’t raise that as a concern, don’t bother with it. I mean why go there? Why? But if they say, “Well what are you going to do to sell my house?” I say, “Great question.” (It’s always a great question.) “Great question. Well actually here is what I am going to do. According to the National Association of Realtors the average realtor, through all their marketing, gets 23 inbound customer contacts every month.” And I click to IsItSoldYet.com and say, “Last week I got 341 calls.” Or whatever. “So I guess with all my marketing I am generating about 20 to 25 times average number of customer calls, that is what’s going to sell your house.” But remember, with the approach I use, we are using the bribe to drive the traffic so using the ads is really disingenuous.
Someone from the panel: How physically involved, by that I mean going out to see them at the negotiation of the contract? Do you actually go to their house at the negotiation or do you do everything over the phone?
Matt Jones: Why? The phone works fine. I mean why do I need to go there to negotiate? In fact I prefer they came to me.
Someone from the panel: So then face-to-face most of your clients again you’ve never met them?
Matt Jones: No, I’ve met some of them, a lot of them are out of state or whatever. But I don’t mind those. It’s not like I am afraid of them, but I look at it from a highest and best use of my time kind of a standpoint.
Someone from the panel: Well it’s evident that you’ve done a good job at it. I mean it is a different business model than I have ever heard; I have done 9 years of traditional going and seeing them. That’s why it is blowing me out of the water here that you have been able to do what you have done.
Matt Jones: Well when I get back Thursday night, Friday I will probably list 6 houses because I’m going to have to make up for lost time. I’m going to have hit the phone real hard. I’m going to probably list 6 houses. I had one of them call me at today at lunch and then a prospect I talked to earlier left a message and they want me to call them back, which means we’re going to close that one. And then I’ve got an investor that I did a CMA for one house and he decided to sell all five. And I will sell them over the phone. But I’ve told them up front; I let them know we are going to talk about which approach might be better to use. I set expectations. And I am expecting that we’re going to get the house on the market the next time we talk. Why wouldn’t we? “You really want to sell it, right?” “You’ve got zero risk—I’ve got all the risk.” “Until it sells, it costs you not a dime.” “Well you’re charging me 8%!” “Let me ask you this: If it doesn’t sell, how much is 8% of zero? And, if I don’t sell it, guess who gets to spend the money for advertising? I do. So if I didn’t think it would sell, I wouldn’t waste my time or my money. You’ve got zero risk here.”
Gary: Where did most of your listing leads come from? Give me a run down.
Matt Jones: Well everything changed; it changed fairly significantly when I took the ten zip codes with HouseValues because that gave me lots. But now up until then, referrals and Proquest. The biggest was Proquest. Because even in my market where we’ve got a lot of first time homebuyers, still 10 – 15% are sellers.
Gary: Ok, so of the homes magazine ad calls, you were still coming up with 10–15% of them that were sellers?
Matt Jones: Right. And when you’re getting 1,100 calls a month that is still a lot of seller leads.
Gary: Yeah. Ok, so that is still the biggest source and then you added House Values into it and you’re getting…
Matt Jones: Now I get approximately 1,100 calls on my Proquest hotline. Because a lot of times I have multiple extensions and because of the way I’ve got mine set up, I get 2.98 calls per lead. And this is over the last 14 months that I have been with you guys. I ran the stats before I came; it’s 2.98 calls per lead or per unique caller. This is the way I track it: I take the total number of calls and divide it by the total number of unique caller phone numbers.
Gary: So, even at this point, your listing leads are predominantly coming from the two sources.
Matt Jones: And my web site. I have a great web site and I get a lot [of seller leads] from my web site. And because of the way I have my hotline set up, Proquest is getting me about 30% of my web business too. Because callers are going to get a commercial for my website when they come to my hotline.
Gary (to the panel at large): There’s another whole subject that we probably could have got into that you guys would have liked. His web marketing is really phenomenal. He generated 292 leads last month off his web site, a large percent of it coming from pay-per-click search advertising. He has become very masterful at pay-per-click. What is your average lead cost?
Matt Jones: Last month I got 63 website leads, directly from my Proquest hotline. I got 73 the month before that.
Someone from the panel: So you already captured them on Proquest with their phone number?
Gary: He’s marketing through multiple channels, he’s converging the two.
Matt Jones: They say that you need to touch somebody six times to brand yourself in their mind. They see my ad in a book, that’s once. They call the hotline; they get the commercials and everything, that’s twice because they’re hearing a voice. It’s a different medium. Ok? Now, maybe they’ll hit multiple extensions, but when they go to my Proquest hotline, they are going to get an incoming commercial that really pushes my web site. When somebody calls my hotline, it answers “Thank you for calling FavoriteAgent.com. In a second I’m going to ask you to enter your four digit code, but first I want to tell you about our award winning web site… blah, blah, blah”. I give them 15 seconds—they are a captive audience for 15 seconds and then I say, “Ok. Enter your 4 digit code now.” They enter it and it says hey great choice, this home has 3 bedrooms 2 baths, it’s located in the western part of Fayetteville in a subdivision called Remington.
It’s only 2 minutes from Fort Bragg or 5 minutes from Fort Bragg. If you’d like pricing or more detailed information, press 5 and enter extension 4000.
Someone from the panel: No address right?
Matt Jones: Heck no! No price either. If you’d like pricing or more detailed information, press 5 and enter extension 4000. So then they press 5 and 4000. My extension 4000 says because market conditions are changing rapidly I have omitted pricing information from this recording so I don’t have to re-record this message every few days. But I do have two ways you can get pricing information: First you can log onto my web site at www.FavoriteAgent.com and you can check up to the minute pricing information on any house in our market, not just my listings, or you can press zero now and my assistant will be happy to get that information.
Someone from the panel: So within the property description you have another diversion to another extension which tells them that the price…you don’t record price changes on the listing extension you divert it from there to extension 4000?
Matt Jones: I don’t put any prices on the listing extensions.
Someone from the panel: I mean because the price is changing…extension 4000 and from there if they choose to call you directly push zero?
Matt Jones: They got two ways they can get a price, they can zero through or they can go to my web site. If they don’t have a computer gosh I guess they’re going to have to push zero, aren’t they?
Gary: So you are not putting pricing anywhere, you are putting extension 4000 that guides them to zero transfer.
Matt Jones: But that part really doesn’t matter, I’ve already got their phone number and we’re going to call them back. So my ad has done its job.
Gary: You’re going to get your 6 points of touch by the time they hit your web site and you call them!
Matt Jones: Then they hit my web site and we touch them again. Then my buyer’s agent is going to give them a call back and that is a touch, my mortgage guy is going to give them a call back that’s going to be a touch. You know, so they are basically going to be swarmed.
Someone from the panel: So on your recordings you never ever, well you said you don’t put the price?
Matt Jones: I wouldn’t say never ever. I used to, but then you get price changes.
Someone from the panel: Well, but you aren’t doing the address anywhere on them either?
Matt Jones: No.
Gary: For detailed information, go to web site or press zero.
Matt Jones: Here’s the deal, here’s my philosophy—it may be wrong, Ok? But I’m not a charity. I’m a business. If you want information from me you’re going to have to give me information, it’s a trade. It’s that simple. Bottom line is if you want to know anything about this house other than just enough to get you interested, you are going to have to either contact me through my web site and give up information or else you’re going to have to talk to one of my buyer agents.
Someone from the panel: Now on your web site are you linked to IDX? Or do you put your listings on there?
Matt Jones: Both.
Someone from the panel: Ok, so how do they get to that specific listing?
Matt Jones: They don’t. By the time they get there, they’re really not interested in that house. They will search through everything.
Gary: That’s another unique thing in the step. When you hit his site if you click anything on the main page and all it does is go to a form that says, “Please fill out this quick one minute form” and it’s all required fields. To get anywhere else, you get nothing unless you fill out the fields and he’s getting nearly 25% of the people to fill out that form. So does it work? You bet it works. It works like crazy. Don’t get give them IDX freely. Don’t let them just go there and search and get the info.
Someone from the panel: So if they want the price they can press zero or they can go to the MLS. And if they are going to the MLS they really don’t know what they are looking for.
Matt Jones: Sure they do, a house.
Someone from the panel: They will forget about that home before they get there.
Gary: The job is done—his job. What he’s trying to accomplish—touching them 6 times, capturing the lead, getting them to take the next step and the next step. He’s pushed them to a recording, pushes them to another recording they either hit zero or they’re going to his web site. If they go to his web site they got to take another action, he’s leading himself, through multiple steps of actions. They [Matt’s team] are getting them more and more and more involved. But the key to every single step he’s pushed them to, is he’s still making it incredibly easy. There are no significant barriers in any part of the process but they’ve got to slowly divulge a little bit more.
Matt Jones: We are just cutting off their arm an inch at a time. [Laughing.]
Gary: And he’s getting to that form page on his web site where they have to type in their name, address and everything—its all required fields—to go to the next step, to find the detailed property information and he’s getting a quarter of them to do it! 25% of them are doing it!
Someone from the panel: So what happens to the other 75%? They just disappear?
Matt Jones: No. My buyer agents call them all back and so does my mortgage guy. Because at that point they have already been call captured that is the whole beauty of Proquest—the job’s already done but if I can improve that lead quality, that’s even better.
Gary: We call that peeling the onion. Sometimes you have to peel the onion to get down to the meat. And the more of the skins you take off of it the closer you are to making your transaction.
Matt Jones: And plus, before I got the buyer agents and everybody doing it I was using voice broadcast exclusively to touch them again and again and again. And literally I have had people, (I had a series of six different broadcast messages. Every week, mysteriously, on Thursday they’d get a voice mail message from voice broadcast, and it would be a different one saying, “Hey… Matt Jones calling… sorry I missed you. Just wanted to let you know we just had some new, whatever, or hey there’s been some great new changes to the web site you need to check it out.” Everything would always send them to the web site and give them my phone number each time but there were some other different reasons to do it. And I hit them every week, every Thursday, so that as they started to get in the mindset on Friday to look at houses they would get in touch.
Gary: What happens in this process with your buyer’s agent now? You have kind of put the buyers agent in place of that…I am wondering when you get a lead how many times do you hit them before you let go of that lead?
Matt Jones: One of the things I have been challenged about is that you have some method—I plan on stealing it from you before we leave—but you have some way of tracking their actual conversion rate and I don’t have a system built yet to track the conversion rate because frankly I have way to many leads. That’s what my problem is. I refuse to turn the water hose down. I’ve got a fire hydrant and I just refuse to turn it off. I am recruiting as fast as I can, but you can only recruit so fast so I am wasting a lot of leads.
Gary: The reason I ask how many times your buyers agents are touching them is because if they are calling them once or twice you ought to kick in the voice broadcast routine after the fact, after they have dropped the lead, for those unconverted leads. I mean you had a good system for doing it, you had people walking in asking for you and you didn’t have a clue who they were.
Matt Jones: I had somebody call me up one time at lunch and they said, “Hi, my name is Mary Smith (or whatever her name was), I don’t know if you remember me or not (now bear in mind this is somebody I have never seen, never talked to, and don’t know her from Adam) but I called on one of your ads in a magazine to check on a house, and I have visited your web site. You’ve called me back several times and I have always missed you. Anyway I was working with an agent but I can’t get him to return my calls. I was wondering if you could you help me find a house?” I’d never talked to her. But she felt like we were old friends.
Gary: I’m wondering if after your buyers agents have made that point of contact and it is an unconverted lead, plug them into that back end voice broadcast system again, make it appear as if it is coming back from you again. Like a follow up after they have basically canned the lead. Because with a fire hydrant you’ve got to can the leads relatively fast, I mean one or two calls and that is about it with, you know 500 leads or whatever you have.
Matt Jones: Yeah, that’s good. Right now I’ve got a real hungry mortgage loan officer doing all the first calls back, which is nice. And then I’ve got the buyer agents, their first move is to grab the web site leads because they have multiple phone numbers, their name, their time frame, their price range, they’ve got all that information. So that is leaving essentially 70% of my Proquest leads that are kind of a second priority to them. Do you understand what I am saying? So I have actually been toying with the idea, and I was hoping maybe somebody had done this, of actually getting a real honest to goodness sales guy to basically to nothing but telemarketing all day long, setting the initial hook setting the appointments and basically feeding them to buyers agents.
Someone from the panel: That person most likely needs to be licensed.
Matt Jones: No he doesn’t. I have already been to our Real Estate Commission. What’s odd is the person who takes them to the house has to be licensed but the person selling them on the phone doesn’t have to have a license at all. Isn’t that amazing? That is the law in North Carolina.
Gary: This is North Carolina, you aren’t going to find that most places.
Matt Jones: Anyway, back to your question. Here is my lead cost for Proquest. It ‘s costing me 38.4 cents per call. So then I add the cost of the magazines that I run in. In The Real Estate Preview, local magazine, the cost per lead is $17.39. In Homes and Land, my cost is $12.29 per lead. In The Real Estate Book, my cost is $6.43 per lead. It’s costing me $0.88 per click-through on Google and it is costing me $2.24 per click-through on Overture and I get about 25% that go to the site fill out the form. So basically, my cost per lead is 4 x 0.88 is $3.50 or $3.60 for Google web leads they are basically free for Proquest because they are already paid for by the cost of the magazine ad and Overture is costing $12.00 per lead.
Someone from the panel: How many click-throughs are you getting from Google and Overture?
Matt Jones: This last month, I got 422 click throughs from Google out of 5985 views of my ad; I had a click-through rate of 6.4%, which is pretty low for me. On Overture, 6.71% was the click-through rate, and I had 233 clicks. Thankfully that’s all I got from them because they cost 4 times as much.
Someone from the panel: Have you been able to determine which lead is a more quality lead for you, a lead off the web versus Proquest?
Matt Jones: I am just going to give you a gut feeling on this. I look at it like this; there is a buying cycle on real estate. First, there is the “interest phase” while the lead is gathering information. From there they move into a “searching phase” where they are to the point of actually finding a home or selling a home. This is typically where they start working with an agent. Eventually they move into the “transaction phase” that carries them from contract to closing. The typical duty call comes in late, late, late in the searching phase, whereas Proquest hot line calls and web leads almost always come in during the interest phase. Occasionally, you get that one that is ready to do something right now, but that is not typical. Most agents are used to the typical duty call time frame that seems to be a lot shorter. But I believe that website and hotline leads are earlier in the buying cycle—we have captured them earlier. Now, statistically, 74% are going to work with the first agent they talk with, so it is a numbers game. Unless you just really screw up they are going to work with you, you’ve just got to stay in touch. So you just put them in a campaign and drip them.
Someone from the panel: Proquest is kind of like the search engines. Like you said, you aren’t going to have somebody call you up and say, “I want to buy it” but it gets you to them first.
Matt Jones: If they zero through, chances are they further along in that cycle. Most of the time when they want to remain anonymous it is just like the web site so I see the bulk of the Proquest calls are just like web leads, they are early in the cycle they are still in the interest phase.
Someone from the panel: So really you don’t differentiate, quality wise, the leads? You know a lead is a lead is a lead regardless where it comes from.
Matt Jones: I know that statistically, 30% of them are going to buy or sell real estate with in the next 60 days, and another 45% are going to do it with in a year. So I know that there is no such thing as a bad lead.
Someone from the panel: I am just curious for those who have buyer agents, what is your difference in compensations on your buyer agents?
Matt Jones: I am on a 50% split with mine. I do all the listing for our team [at the time of publication, Matt has added a listing agent to the team and no longer does the listing himself], if they get a listing lead it comes to me. By the same token, I get buyer leads all the time and they go to my buyer’s agents. What’s fair is fair. But I have worked my way up to a 90% split and the broker pays half of my ad bill, which is significant. So I am basically like a Re/Max split. I am in pretty good shape with regard to that, so they are netting about 43% they have no ad costs. They have no costs, period except for their own lock box key and their association dues, so they get 43%. They would go to work in an average agency and they getting a 50% split and they would have to pay for their own lead generation (which should cost them 20% of their GCI). With me they are on a 43% deal with no expenses, which is a pretty good deal. I am looking at some tiers but I don’t have any real super stars yet so, and I am not real excited about tiers.
Someone from the panel: Don’t you think it is important that they understand the big picture? A lot of times they have a perceived benefit but it isn’t reality. They don’t have any clue what goes into creating the lead generation engine, the expenses, all of it; then they go out on their own. I have several leave, they go out on their own and they basically flounder.
Matt Jones: What I have done, and it seems to be working, (of course I have all this vast 17 months of experience), but what seems to be working is I make sure they know up front the “value add” that I am bringing and what is involved in it and I make sure they understand what the average realtor out there is getting in terms of leads. I make sure they see how many leads come through the duty desk, which is zero. Each of my buyer’s agents probably has 3 times the leads to work with on a single duty day than our entire duty desk gets through the course of a month. I think if we keep them from seeing the whole picture they just see the part they want to see and then it looks a lot sweeter than it is. They don’t realize I’m dropping five grand a month to advertise.
Someone from the panel: Do you share those numbers with them?
Matt Jones: Absolutely! I say, “Listen, you can do this too if you got about an extra five grand a month! By all means. Of course it will take you a few months of not doing anything while you ramp up and get the systems working and stuff but hey it’s great!” So I think that’s important to make sure they see the whole picture not just the part they want to see.