First let’s look at how they find a Realtor. There are probably as many answers as there are buyers and sellers, but I like this explanation the best:
“If a consumer knows a Realtor, either as a friend, family member, acquaintance or a past relationship who stands out in their mind in some significant way and they feel comfortable with them, they will call that agent and ask them to come list their home. If there is no single agent who stands out in their mind, they may ask a friend they know for a referral.
Another option is that they might call two or three agents that they perceive as successful and whom they have a good feeling about, and ask them to come over for an interview. If they don’t know or recognize any agents in the area, they will probably pick up the paper, homes magazines or phone book and look for a Real Estate company whose name they are familiar with and call them. If they don’t make a connection with the agent they talk to, they keep calling or going to open houses until they meet an agent with whom they do feel a connection.”
I also read a study by Nansi Hall of House Values that summarized the selling and buying cycle something like this:
The home selling process can take up to five years and be divided into four distinct “phases”- only three of which are actually measurable. Lasting up to four years, the first phase is a vague awareness that selling their home could solve a problem, offer a financial advantage or provide a needed change.
During the 4 years a specific triggering event such as a desire/need for a larger house, wanting to live in a certain area, job relocation and family concerns would occur that moved sellers into the next phase of the process.
From this point the selling process is about one year and includes three measurable phases:
Thinking about selling – 5.5 months
Researching a sale – 1.4 months
Actively selling – 2.4 months
Buyers also go through a period of up to four years during which they were somewhat aware that they “should” buy a home for a wide variety of reasons.
Like sellers, buyers did not enter into the measurable part of the process until after a specific triggering event, including wanting or needing a larger home, wanting the financial advantages of buying instead of renting, family reasons and job relocation.
Following the trigger event the home buying process takes an average of almost a year and a half (16.4 months), split into the following three measurable phases:
Thinking about buying – 7.1 months
Researching a purchase – 5.3 months
Actively looking for a home – 4.1 months
So what does all this tell you?
- You need to ensure that all clients are your raving fans and you keep in touch with them on a regular basis every quarter.
- You can advertise in the newspaper every week for years, but if a prospective buyer or seller who does not already have an agent does not see your advertising or marketing material during the 6 months or so when they are in their “active stage” you are probably not going to get their call.
Another way of answering this question is to look through your client list. I will bet more than 80% are people you knew, referrals from clients, or people you have met at an open house. So why are you marketing to total strangers who take 5 years to buy or sell a house, are only interested in finding a Realtor for a few months during that 5 years and probably already know a Realtor?