NAR’s 2023 Profile of Home Buyers and Sellers has just been released, and it’s packed with insights that can help you take your business to the next level in 2024. According to trainer Bernice Ross, the most important insights concern your lead generation and lead conversion.
NAR’s 2023 Profile of Home Buyers and Sellers has just been released, and it’s packed with insights that can help you take your business to the next level in 2024. The most important insights concern your lead generation and lead conversion.
If you’re ready to discover what to keep and what to leave behind in 2024, the statistics and strategies below can help you do so.
1. Make face-to-face prospecting your top lead generation activity
According to this year’s Profile, a whopping 81 percent of the sellers and 71 percent of the buyers only interviewed one agent, whom they subsequently hired. These are the highest numbers I have seen since I first started tracking them over a decade ago.
Given that there are more than 1.5 million Realtors in the U.S. and fewer listings than last year — competition is fierce. If you’re the first agent who sees them face-to-face when they’re ready to transact, you have a high probability of being the agent who will get the listing or convert that buyer lead.
2024 action steps: Increase the time you spend engaging in face-to-face prospecting activities
Whether it’s holding an open house, door knocking, meeting a past client for coffee or dropping by with an updated “equity checkup” before property tax time to let them know the current value of their home, these are all proven ways to be face-to-face with those who are most likely to transact now. Consequently, make face-to-face lead generation activities your preferred method of lead generation in 2024.
2. Convert incoming leads by responding immediately
The statistics above suggest that engaging in face-to-face lead generation activities is of paramount importance. Nevertheless, they are equally relevant when it comes to lead conversion as well.
Regardless of whether it’s a referral, an internet lead, phone call or web inquiry, your one goal when you respond to the lead is to schedule a face-to-face appointment as soon as possible. If you don’t, they will keep calling or texting until they find an agent who does respond to their inquiries.
2024 action step: Make sure you’re the first agent they interview in person in 2024 by responding immediately to all incoming leads
3. Referrals are still the primary source of business
There’s one fact about the real estate business that has been consistent for decades. Past clients and your sphere are the best sources of referrals for your business. This is especially important since this year’s profile found that 90 percent of buyers would use their agent again or recommend their agent to others.
- Sixty-five percent of sellers found their agent through a referral from a friend, neighbor, or relative or used an agent they had worked with before to buy or sell a home.
- A total of 56 percent of the buyers either used an agent who was referred to them by a friend, neighbor or relative (43 percent) or an agent with whom they had worked in the past to buy or sell a home (13 percent).
Here’s another important point to note. According to the profile, Americans are still currently moving, on average, about once every 10 years. This means that for every 10 members of your sphere or past clients you meet with, at least one should transact in the next 12 months.
2024 action steps: Devote up to 65% of your time and marketing dollars to developing more business from your past clients and sphere of influence
Some strategies include:
- Instead of farming or shotgun marketing techniques to strangers, use your print and digital marketing budget to stay in regular contact with your sphere and past client list.
- Conduct regular client appreciation events. Food trucks and ice cream socials are always popular and relatively inexpensive as well.
- Hold a first-time buyer seminar, and ask your sphere and past clients to invite a friend or family member who may be ready to buy their first home.
- Hold a seller seminar for those who want to know more about listing their home in today’s market. You could also ask them to bring a friend, especially if that person is experiencing financial difficulties and may be in danger of defaulting or going into foreclosure. Your goal is to help them understand how selling now can protect both their equity and their credit as opposed to going into default and facing foreclosure should they fail to address the issue as soon as possible.
3. Reasons to prospect the 60+ Market
There are two notable findings that suggest you’ll want to seriously consider prospecting those age 60+ in 2024 because they’re finally on the move.
- As in the 2022 profile, the 2023 profile results found that the typical homeseller was 60 years old.
- The profile also reports that senior-related housing increased from 7 percent last year to 19 percent in 2023, with 17 percent of buyers purchasing condos and 12 percent purchasing a townhouse or row house.
- Fourteen percent of homebuyers purchased a multigenerational home to care for aging parents because children or relatives over the age of 18 were moving back home and for cost savings.
2024 action steps: Learn how to provide value-added service to seniors
Seniors are often forced to move due to financial issues, the loss of a spouse, mobility issues, the inability to maintain a large home or the inability to live independently. As the boomers age out, there may be even more multigenerational homes, not just among people from other parts of the world such as China and India where this is the norm, but among families who want an older loved one nearby.
Accessory dwelling units (ADUs) provide a great way for someone who owns a single-family home and has the land and appropriate zoning to add a unit on their present property. The old-fashioned version of a “granny flat” or “guest house” is rapidly becoming a growing alternative for providing this type of senior housing.
Steps you can take to reach this lucrative source of sellers and buyers include:
- Customize your print and digital advertising for these groups to show people who represent this demographic.
- Familiarize yourself with the 55+ independent living communities in your area. Many of these communities are eager to provide events that include holiday parties, speakers, local artists and musicians. Consider sponsoring these to remain front and center so that when someone decides to list their home or condominium unit, they will contact you.
- Familiarize yourself with ADUs and whether they may work in your area.
- Educate yourself about “right-sizing,” and avoid using the term “downsizing.”
4. Get the word out about down payment assistance
Due to inflation and higher interest rates, buyers are finding it even more difficult to save for their down payment. As the profile reports, 38 percent said that saving for a down payment was the most difficult step in the process in the purchasing process.
2024 action steps: If you want to work in the first-time buyer market, educate yourself about down payment assistance, the programs available in your area and how they work
DownPaymentResource.com (DPR) aggregates all the down payment assistance programs nationally. Your buyers can visit their site to see if they qualify by answering six short questions.
To quickly locate the type of down payment assistance on currently listed properties, DPR has partnered with Zillow to display this information under the mortgage tab on its site.
The most important reason you will want to pursue this, however, is that in 2022 the average amount of down payment assistance that was granted to buyers was $17,000.
This is a tremendous way to market — all you need to do is get the word out in on your social media pages, print, and digital marketing materials.
5. The 2023 FSBO market almost completely dried up
One of the most surprising findings in the 2023 profile was how few for sale by owner (FSBO) transactions took place between buyers who did not know the seller as opposed to intra-family transfers, divorce, inheritance, etc. According to the Profile:
- Seven percent of recent home sales were FSBO sales this year. This is an all-time low and matches the share seen in 2021.
- The majority of FSBO sellers, 57 percent knew the buyer of the home (43 percent did not know the buyer).
- Perhaps the most surprising statistic is that in rural areas 14 percent of the transactions were FSBOs. That number drops to 3 percent in urban areas.
The number for urban areas is surprising because it means that only about 1.29 percent of all transactions in urban areas were FSBOs where the buyers and sellers did not know each other.
2024 action steps: Consider pivoting your lead generation efforts to non-FSBOs
If you have made working with FSBOs a cornerstone of your business, 2024 could be a grim year based upon what happened with FSBOs in 2023. The question you must answer is whether your time and money would be better spent on other types of lead generation, such as prospecting senior homeowners who have been in their homes 10 years or more.
What action steps will you take?
What has worked well in your business in 2023 that you will want to continue to do in 2024? On the other hand, what hasn’t been working that needs to be left behind and replaced with a more effective lead generation or lead conversion strategy? There’s no better time than right now to take stock of where you have been and then chart your course for where you want to go in 2024.
Bernice Ross, president and CEO of BrokerageUP and RealEstateC