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Are Zillow Leads Worth the Money?
Zillow is a polarizing topic among realtors. Some love it, and some hate it. But nobody can argue its dominance of the real estate market. 180 million people visited Zillow in the month of March alone, and 70% of people looking to buy a home start their search at the real estate database, according to Zillow Senior Business Consultant Aleksander Danilov.
For these reasons, it is important for agents to understand the ins and outs of Zillow’s agent advertising platform. Properly promoting yourself on Zillow can be an effective way to generate leads and grow your business. The question you have to ask is whether Zillow leads are worth they money to you.
Zillow Premier Agent
It’s the age old adage: You’ve got to spend money to make money. If you’re a real estate agent, Premier Agent — Zillow and Trulia’s advertising platform — is a worthwhile place to invest. While both sites allow you to post listings for free, becoming a premier agent has two major benefits:
- Exclusivity: You get to be the exclusive agent promoted on your listings. This increases your odds of getting the full commission. If you don’t sign up for Zillow Premier Agent, other agents will appear on your listing.
- Wider Reach: You get to advertise on local listings provided by non-Zillow Premier Agents. This is a great way to generate buyer leads even if you don’t have a listing of your own to advertise on Zillow.
“The more often you come up in users’ searches the more comfortable they will feel with you,” Danilov says.
Zillow charges agents based on two factors:
- The zip codes you’re featured in.
- The number of times your ad is viewed (cost per impression or CPM, cost per 1,000 impressions).
When you sign up for Premier Agent, you’ll be asked to pick a zip code (or zip codes) that you want to be featured in. Since different zip codes can have very different real estate markets, you’ll pay a different monthly price based on what zip code you choose. Zillow uses median listing prices and competition to determine pricing in each zip code.
You’re also charged more as more people view your ad. Pricing will vary depending on the market and competition, but you can expect to pay anywhere from $20 per 1,000 impressions in a low-end market to $60 per 1,000 impressions in a high-end market.
To determine your costs, you need to figure out how many leads and transactions you are getting per impression. Premier Agents are encouraged to pay for around 5,000 impressions per month to start seeing results. In an average market that could cost $200 per month*. Say it takes 100 impressions for a user to click on your name and send you a message. That would provide you with about 50 leads per month. The average Zillow conversion rate is 3.5 to 4 percent, Danilov says, which would mean two of those leads would transact.
Compare the profits from the sale against the money spent on advertising, and you know your cost of doing business.
*Based on average cost of 1,000 impressions of $40. It could cost as little as $100 for 5,000 impressions all the way to $360. This average is just an example. Actual cost per lead is dependent on the market.
- Follow up immediately: To realize Zillow’s 4 percent conversion rate, Danilov encourages reaching out to leads within 3 to 5 minutes of them messaging you, and keeping up communication. “People want the immediate satisfaction,” Danilov says. “If I’m looking for a home and I want information and people don’t call me back ASAP is that a good experience?”
- Optimize your agent profile: Realtors can set up an agent profile on Zillow free of charge. Once you create your profile, there are several ways to make it stand out:
- Provide valuable local information: This shows that you are an expert in your location and somebody client’s can feel confident in.
- Get client reviews: Allow others to promote you on your profile by sharing good experiences they had working with you.
- Add past sales to your profile: This shows potential leads where you have been active and your areas of expertise.
- Add your listings to Zillow: This may seem obvious but the more listings you have an Zillow, the more places your agent profile shows up.
- Share your work on social media: Zillow gives you the ability to share your listings, reviews and local market stats on social media sites, where you can reach an even larger network of people.
- Use Zillow Advice: Zillow advice is a forum for people discussing real estate in different markets. Enter your city, state or neighborhood and engage with local prospects.