The Math: How We Will Miss Out On
$750k in Commissions
Our investment model is highly profitable due to the effectiveness of our systems to profit from 1-2% of generated leads. But when you look at the properties that won't qualify as investment opportunities through the lens of an Agent. The data doesn’t lie. We will throw away $5.9M in total commission. And realistically, $776k in potential commissions.
825+ Generated Leads
These leads we generate as investors are significantly different than the leads generated by agents or purchased from providers like Zillow or Realtor(dot)com. Our generated “Cash Offer Request” leads are not tire-kickers thinking about selling or buyers that must be chased. Our “Cash Offer Request” leads are Sellers who, based on the intent of their search term, “Sell house fast for cash,” “Sell house as-is,” Quick cash offer on home," etc., need to sell. Overall, this leads to a much higher conversion rate & a considerably shorter sales cycle.
343+ Sold & Listed Properties
To understand how insane this metric is from only 825 leads generated, you need to understand the industry standard. According to NAR, 1-2% of online leads convert into a sale. According to Zillow's quarterly earning call, Zillow sold 137M leads to agents. In the entire U.S, in the last 12 months, there were only 5.6M home sales. Even if every sale came from a Zillow lead, which didn't happen, that conversion rate is still only 4%. So, going by industry standards 825 generated leads should produce (x 2%) about 16 sales. But our “Cash Offer Request” leads convert at a rate of 41.6%. Tell me: What agent wouldn't want these leads?
2,000% Better Leads
The calculator doesn't lie. Here's the math: The conversion rate of our ‘Cash Offer Request’ leads (41.6%) divided by the conversion rate for Zillow, Realtor(dot)com leads (~2%) = 20.8X better conversion. If you're a smart & intelligent marketer, where would you put your money? Spending money on Zillow or Realtor(dot)com leads, you can expect 1-3% conversion rate. Our generated “Cash Offer Request” leads, proven by the data & math, are 2,080% better leads. Here's the interesting part. Of that 41.6% conversion rate, only 2-5% are selling for Cash. The rest are getting listed & sold on the MLS.
Rapport With 244 Sellers
16 Sellers Will Prioritize Speed
228 Sellers Will Prioritize ROI
Of the Sellers that have completed the qualifying process to see what Cash Offer Price we could make work on their property, it was determined that 94.6% of Seller's primary objective was not speed, but rather, ROI. We have found that most Sellers requesting a Cash Offer on their property don't fully understand what that means or what it entails. However, after we educate & walk them through the numbers, most agree that their primary objective of maximizing their ROI at the time of sale could be best achieved by listing & selling their property on the MLS. And, in 99% of the cases, we agree & encourage Sellers to pursue that path.
$2.5M In Total Realtor Commissions
This is where it gets exciting in regard to the size of the opportunity going forward. Of the 228 Sellers we will have built rapport with that have a primary objective of maximizing their ROI, approximately 104 of these properties will sell on the MLS. To take an average price point of $450K @ 2.5% Listing Commission - do the math = $2.5M in estimated paid Listing Commissions.
$750k in Commissions Up For Grabs
As mentioned, 228 Sellers we will talk to & diagnose as wanting to maximize ROI, approximately 70% will not be working with an agent. We know this because of the leads we have worked so far and because the question is asked during our qualifying process. This will lead to dozens of Sellers to ask us for a referral. After all, because of our Consumer Advocate-based approach; educating Sellers who do not understand the Cash Offer process, they trust us. We have given them no reason not to. Many Sellers even ask, “Are you an agent, can you just help me put it on the market.” Remember, we are investors. Not real estate agents. We do not make money by listing properties. So, naturally, our response is, “Sorry, we're not real estate agents. We can't help you list the property. And when asked for a referral to an agent, not wanting to be in the middle, in case the agent didn't perform well, we politely decline. “Unfortunately, I'm sorry. We don't have a good referral for you.” At this point, from a business perspective, like us - you probably realize how stupid & costly this approach has been, up to this point, when analyzing the Opportunity Cost. Because I'm guessing, someone like you, an agent, would love to receive these direct "Come List Me" referrals. Of the 104 properties that will sell on the market - it's obvious, no one is batting 1000. But, just 30% of them, do the math = $750k+ in potential Listing Commissions. Hell, even if we only got 10% of those “Come List Me' opportunities, because we'd already built incredible rapport with the Seller, equals $250,000 in Listing Commissions.
Only Logical Conclusion
If we prioritized finding & vetting a smart, capable, intelligent, ethical, & superiorly skilled Top 50 Agent to form an equal “Skin in The Game” partnership with, who has the same strength of systems we have, so we knew that balls on the listing side wouldn't get dropped, thus, wouldn't become a stain on our reputation. Then we could refer our “Come List Me” Sellers directly to that trusted Realtor partnership. Instead of someone else getting that potential $750k in commissions, we could pass it on to our committed Partner.
