Mega open houses are more critical than ever to your success as a real estate agent. Three reasons why are:
- There are more and more real estate agents competing for a limited amount of business. To succeed you need to differentiate yourself.
- You need to be able to present a marketing plan to your seller prospects that is significantly different from your competition.
- They will trigger additional free marketing.
Open house leads are great leads. Think about it? People choose to come to an open house even though the know they are walking into a home where a real estate agent is trying to sell them on a home. Most people try to avoid salespeople. But they come. They talk to you. They give you their name, address, phone number, email address, and their motivation for being there. Either they are a nosy neighbor, or they have some desire to buy a home. Either way, you win.
Nosy neighbors can give you valuable information about the neighborhood. They are often a great source or additional leads and referrals. They are potential sellers or buyers. Just by meeting them you are helping to establish yourself as a neighborhood expert.
- Let’s say you average six people at an open house.
- If half of those are genuine leads and you host two open houses a week that would be six per week. Rounding off the number that is 26 leads per month (6/2=3×2=6x (52/12) = 25.998 leads per month.
- After 3 months you would have 78 leads.
- For a new agent let’s say you have a 5% conversion rate. So after three months, you should have about you should have closed one or two of those leads and have one or two more that have a probability of closing.
- For a more experienced real estate agent with a 10 percent closing rate, those number should be more like 3 closed deals and 3 more with a high probability of closing
- After a year even with only a 5 % closing rate, you would have generated 312 leads and should have closed around 13 deals. (Assuming it takes 60 days from original agreement to closing you would have 10 months of productivity so 1 = $5,701,.3 deals per month x 10 months = 13 deals
- If your closing rate is 10% that would be 26 deals.
- According to the National Association of Realtors (NAR), the average price of homes purchased by first-time home buyers was $219,300 in the final quarter of 2018.
- If we use that as a figure than 26 deals x $219,300 = $5,701,800 in sales
How can you double that $5,701,800 if sales to meet an surpass the $10 Million mark? There are only a few ways to do that.
- Increase your conversion rate
- Increase the dollar value of homes you close on for buyers and sellers
- Increase the number of closings you do
Increase your open house conversion rate
There is a lot of good information on the internet about how to increase your conversation rate as a real estate agent. Do a web search and I am sure you will find many helpful hints. Most of them are going to point to one thing as the best way to convert leads to clients and leads to clients. RESPOND QUICKLY.
So if you want to increase your conversion rate contacting your prospects quickly, even if they come from an open house is key.
Increase the dollar value of open houses you close on
Over time the dollar value of the homes you are selling will naturally increase. As you sell more and more homes this is the natural turn of events. Making a big jump from selling mid-six-figure homes to million-dollar homes is not always an option. It depends on the market you are in. For those people that have a market that will sustain this type of growth, the best advice is to get a mentor to guide you.
You might want to start by following the advice of authors and Realtors like Jack Cotton. His book Selling Luxury Homes is a great resource for any real estate agent working in higher-end home sales or not.
Increase the number of closings you do
This is simply a numbers game. The more clients you have the more closings you will do. In the example above doing 26 deals will lead to $5,701,800 in sales. To do $10 Million in sales you would need 45 deals. You could build a team to generate that number. You could hold twice as many open houses. You could do a lot of things. What probably makes the most sense for the individual is to get more people coming to your open houses. If you only aver 6 people at your open houses and three of those become leads, what happens if you start averaging 12, 18 or 21. The answer is simple. You get more leads, convert more leads to clients, you close more deals, and make more money.
The Mega Open House
As a real estate agent, no one is responsible for your success except you. Here’s the deal, “Go Big or Go Home!” That is the concept behind the Mega Open House. Bring more value to your seller client. Be better than the rest. Get creative.
When I first heard of Mega Open Houses, I thought the idea was crazy. When I started in real estate, one of the things I was taught, for an open house, was that I should go to the neighbors, tell them about the open house, invite them to come and leave a flyer. If they were not home, I should leave a flyer anyway. I was told to do this for 20 neighbors. Five on each side of the home and 10 across the street. When I started increasing this number to 40, 50, 100 or more I started to see dramatic increases in the number of visitors that were coming to my open houses. The pure number of leads it generated increased but so did the type of leads.
I remember at one of these open houses a neighbor was so impressed that a lead came in for a home at more than twice the value of the home being shown and a lead in a different neighborhood came in as well from a home-owner that was retiring and wanted to sell some of the property he owned.