2010 Oct 4th

One Example of What is Wrong With The Real Estate World

I received this in an email the other day – it was an unsolicited mass mailing(otherwise known as spam) to Hoboken realtors:

hoboken lead

What’s wrong with this beside that I don’t like being spammed?

Well, 07030 is Hoboken.  It would be pretty tough to find a 1200 square foot 2 bedroom condo in Hoboken for under $300,000.

The other zip codes are 07641 – Hawthorne, NJ and 10960 – Nyack, New York.  It’s pretty rare for realtors to be licensed in multiple locations and even rarer multiple states.  Most Hoboken realtors belong only to the Liberty Board MLS which encompasses only Hudson county. The company that sent this, Homethinking.com, is supposed to be expert in real estate?  Why would they send a lead that combines Hoboken, Hawthorne and a different state???

Then, my favorite, the part where they describe the potential buyer’s credit history as “poor”. People with “poor” credit ratings probably should not be applying for mortgages and buying houses.

Just to be clear, this is a solicitation from this company to the realtor seeking $15 for the privilege of buying this lead.  I doubt that many agents will be sending our $15 to Homethinking any time soon.

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  1. JD

    “I doubt that many agents will be sending our $15 to Homethinking any time soon.”

    I can assure you that there are numerous agents out there that will. This is the present and future right there. Online lead generation for local businesses.

    I think you misunderstood what you were sent. Whatever that site is, a potential real estate lead went on it and filled out a form. This site probably just collects potential leads and then sells them off. Like mortgage leads years ago, they cannot use the lead so they contact parties who actually can for a price.

    They may or may not have spammed you. Depends if they followed the “CAN-SPAM” rules. If you can opt out, address is shown, etc.. then an unsolicited email may not be considered spam.

    Now it doesn’t look like they stated “how many” agents can actually buy that lead. If 100 agents can buy it, it is worth very little. If it’s exclusive to a few agents then it’s valuable. And the other factors, such as “bad credit” bring the value of the lead down.

    I think the thing you misunderstood was the multiple locations. You got emailed since 07030 may have been put on the form the potential lead filled out. But that lead may have also selected other cities they want to live, so agents from those zip codes get mailed also.

    Now that lead doesn’t seem relevant for hoboken. 1200-1400 sq. ft., under $300k, poor credit, etc.. Not gonna happen out here. But if it was $500k, great credit, etc.. that lead would be valuable (again depending on how many agents get it). But a hawthorne or nyack agent may find some value.

    And basically if you buy the lead and it is “cold”, then you may not do business with them again. But if you are getting “hot” leads that convert, then it was worth it. A lead generation company will not last if they keep sending garbage leads.

    Thats the gist of local lead generation. There is an agent in Hoboken that is currently banking with targeted, exclusive leads – from a variety of methods – SEO, paid search, landing pages, etc. I’m sure there are more who will figure it all out in the future. And this applies to any industry.

  2. Craig

    I can see a site like Homethinking being successful for those agents that need the help building their business. It could be like the Service Magic of the real estate industry where people go when they are too lazy to do their own due diligence in finding a real estate agent. That being said, successful agents like Lori won’t ever need to pay for these leads. Their business is successfully built on referrals and word of mouth so they have no need to pay for new leads. I doubt Lori even bothers with floor time at her brokerage’s offices.

    The lead in this particular example is obviously useless in Hoboken. But if the lead were someone with $500k to spend, excellent credit, and listed 07030 as their only locale of interest, you can be sure someone out there will pay for it.

  3. Lori

    “A lead generation company will not last if they keep sending garbage leads.”

    In all my years as an agent, I’ve yet to see a paid lead generation company send out anything but garbage leads. Why? Because consumers don’t want to “register” and reveal all their personal information in order to search for a prospective property when they can go to realtor.com or trulia.com and search without registering and without any commitment and get the same (or better) information, pick up a phone and call the agent of their choice or the listing agent. So when asked to give one’s name, address, search criteria, budget, and more, there is huge resistance and the consumer enters junk info. There has been plenty of research done by the industry on consumer behavior on line and forcing consumers to register before providing access to the property listings simply does not work and is a bad business model.

    You are correct, Craig, I don’t pay for leads or do floor time but when I was first starting out, learned that the leads were a waste of time, money and effort but that floor time, where you have the opportunity to connect with and win over an actual person is a fabulous way to get started. Most of the walk-ins are looking for rentals, but not all. If a new agent is willing to work with rentals it is also a great way to develop lasting relationships with the customer that may become a sales opportunity in the future. I can’t tell you how many times, though, I have witnessed a customer walk in and ask a question only to have the floor time agent give a one-word answer and completely squander the chance to help the person and become successful.

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