This is an amazing compilation of facts, figures, attitudes, etc. about the real estate industry. I hope you take the time to read all about this - Active Rain took a great deal of effort to really dig for the facts here.
What separates Rich Real Estate Agents from Poor Real Estate Agents?
In real estate there is no "right answer" on how to be successful. BUT, we have found that some agents are "more right" than others.
ActiveRain conducted a survey(1) of 1,758 real estate professionals to find out what separates the top real estate professionals (those earning over $100,000 a year, we'll call them 'Rich Real Estate Agents') from the struggling real estate professionals (those earning under $35,000 a year, we'll call them 'Poor Real Estate Agents'). 379, or 22% of respondents were Rich Real Estate Agents, while 363 or 21% of respondents were Poor Real Estate Agents.
Here's what we learned:
What Seems to Matter:
What Doesn't Seem to Matter (either it doesn't matter or everyone is using it poorly):
Rich real estate agents invest 6 times as much in technology as poor real estate agents. Every year the average rich real estate agent spends $3,000-5,000 per year on technology, while the poor real estate agent only spends $500-1,000 per year. So, for every one dollar that the poor agent spends on technology, rich agent spends six dollars. Think about this: the average rich real estate spends more money in a month, than some poor real estate agents spend on technology all year.
Where does this spending go?
Rich real estate agents are aggressive in using BROADCAST forms of social media to attract clients. What is broadcast social media? Any form of social media which allows a real estate agent or real estate professional to communicate in a broadcast format which is open on the Internet (unlike FaceBook which is only visible to your friends.)
What forms of social media are Rich Real Estate Agents using?
The rich real estate agent spends 10 times more on marketing and advertising for their business. That may be the most shocking number of all. The rich real estate agent spends $5,000-$10,000 per year on marketing, while the poor real estate agent spends only $500-$1,000 per year. Again, a rich real estate agent is spending more in 2 weeks than some poor real estate agents spend on marketing ALL YEAR!
How are rich real estate agents spending their marketing dollars?
When asked,”What is the most effective marketing or advertising that you do?” rich real estate agents answered: 1) Personal referrals and word of mouth, 2) blogging, and 3) professional referrals and business networking.
So what does NOT matter? When we looked at the data of what separates the rich real estate agents from the poor real estate agents, technology, broadcast social media, and marketing stuck out. In contrast, the following services were surprising in that they did NOT stick out. This could be that every agent is using them; some could be using them well while the rest are using them poorly. The survey could not tell the difference
1. Facebook: 90% of real estate agents are using FaceBook. Period. Pause. There could be a whole survey on the best ways to use FaceBook which may say Fan Pages are better than Business Pages or Places. But on its face (ha ha), FaceBook does not sell more houses for the rich real estate agent versus the poor real estate agent.
2. Home Listing Aggregation Sites: When asked, "Do you advertise or use the following real estate web sites to market your business?" we saw surprisingly high penetration for the following web sites on average:
There was no discernible difference between rich real estate agents and poor real estate agents in their usage of these sites, with one exception: Trulia had a very slight skew towards greater usage among poor real estate agents. In fact, Trulia and FrontDoor Real Estate from HGTV (only 14% usage on average) were the only two real estate web sites with a slightly higher usage among poor real estate agents, perhaps due to the free marketing tools and profiles offered by both web sites.
When you look at overall site usage, some interesting observations come to light. It’s not surprising that Craigslist is the most used site, considering it is free. However, we were surprised to see Trulia with a slight edge over Realtor.com and Zillow. Realtor.com should have a higher penetration given that it is the NAR-sponsored web site. We would have expected Zillow to have higher usage than Trulia, given the amount of publicity that Zillow has attracted from its successful IPO. (Rumor has it that Trulia is preparing to go public in the near future, so it will be fascinating to see their results.) Trulia had a very slight skew towards greater usage among poor real estate agents versus rich real estate agents.
3. Direct Mail: Over 60% of respondents use direct mail to market their business. Pause. That's the same percentage of respondents using Zillow, Realtor.com and Trulia. Perhaps people still open the mail and hire their real estate agent based on the refrigerator magnet. More poor real estate agents report using direct mail than have an IDX site. In 2011 how is this possible? Either direct mail continues to be HIGHLY effective or we, as the real estate industry have been slow to change behavior. Hard to tell from the survey, but we at ActiveRain have our suspicions.
By the way, some things are unexplainable but if you are reading this and you use direct mail and you do not have an IDX site do yourself a huge favor and invest in a good one. It could be the reason you make a huge jump in 2012.
Other things which are hard to explain:
Not every rich agent is going to follow the exact same road map. I'm sure everyone knows a real estate agent out there with no website who rarely uses email that would land in the 'rich agent' category. Of course these types are becoming more and more rare as the years go by and consumer behavior changes.
We hope that you ask yourself "What kind of things will I be investing in for 2012?" and will those investments pay off like they have for the rich real estate agent.
What do you want to be in 2012? A rich agent or a poor agent?