i!
So, when it comes to sales and marketing in real estate, I’ve learned a lot over the years. One really important thing that will give you more business is connecting with clients and customers personally.
As a real estate professional, I understand that buying or selling a home is an incredibly emotional and personal experience. For many people, a home is not just a place to live but a reflection of their identity and aspirations. It can be a place of memories, traditions, and family.
Sales in real estate
– involve the process of connecting buyers and sellers and facilitating the transaction process. From advertising properties and showcasing them to potential buyers to negotiating offers and closing deals, sales professionals in real estate have a lot on their plate.
Marketing in real estate
– is building brand awareness. It involves creating engaging content for social media and other online channels, designing eye-catching advertisements, and developing targeted marketing campaigns.
Let’s begin with understanding real estate and its many facets and what goes behind the real estate business
Real estate Industry and how it is shaping future India
The real estate industry refers to the buying, selling, and renting properties and land, including residential, commercial, and industrial properties. With its significant contribution, the real estate industry has been creating jobs and generating revenues and is considered a lucrative industry.
Real Estate industry is currently a 6% contributor to the national GDP. It is expected to reach 13% by 2025, with market size estimated to reach 1 trillion dollars by 2030, according to a recent report by India Brand Equity Foundation (IBEF). A 3-5% property appreciation puts India on par with other real estate markets like Dubai, Canada, etc.
Real Estate is a resilient industry, as demonstrated by the astounding progress of the residential real estate market in 2022, setting new sales record of 68% YoY and adaptive with the quick acceptance of digitization of real estate platforms and introduction of fractional sales, post-pandemic.
Types of business in real Estate
The industry involves various individuals and entities, such as:
- Real estate agents,
- Brokers,
- Property developers,
- Investors, and
Full real estate cycle
-
Search and discovery: the listing platform is where clients learn about the project.
-
Fresh Property purchase or leasing: Brokers help end users/investors in the purchase
-
Property loan: Bank/lenders provide housing loan
-
Facility/Property Management: Property Management firms or brokers help in renting the property
-
Resale: Brokers help in the resale of the unit.
Real estate market in India
The real estate market can be divided into residential and commercial segments, with the residential sector comprising almost 80% share. In this 80% share, 95% are sentiment-driven first-time investors, for whom owning a house provides a sense of security and ownership. According to Colliers 2023 survey, 58% of developers expect housing prices to increase amidst higher costs and steady demand. The analysis is a result of higher buyer inquiries in 2022.
While post-pandemic sentiment has favored residential real Estate in terms of individual investment, institutional real estate investment in the residential segment has seen -29% growth YoY. Alternate asset classes and office segments saw 92% YoY and 41% growth, respectively.
Sales and Marketing in Residential Real Estate
Any business has four pillars:
- Supply: Product or service which people require
- Demand: Requirement of the supply
- People: Internal stakeholders or team members are required to match supply with demand and smoothly run the operations.
- Tech: Technology or platform to bind all the pillars together.
Whenever a new project is launched by the developer, their motive is to sell the inventory much before the delivery date as specified in their RERA documents. While for some developers, the sale of most of the inventory is a way to acquire funds from the bank to complete the project, while for other developers, the funds are utilized to start new projects.
Lead generation for Real Estate
Lead generation for real estate involves identifying potential clients interested in buying, selling, or renting properties. This process often involves collecting contact information and qualifying leads to determine their level of interest and readiness to make a real estate transaction. Effective lead-generation strategies can help real estate agents, and brokers build a strong pipeline of qualified leads, which can ultimately lead to more successful transactions and increased revenue.
- Online advertising
- Content marketing
- Referral marketing
- Networking
- Direct mail campaigns
- Cold calling
- Partnering with brokers and other professionals
In-house Sales Team Vs Outsourced Team
It is a standard these days that not every developer will have a dedicated sales team to sell the inventory of their latest projects. Either a developer will have a closing team sitting at the site while brokers or channel partners do the sourcing of clients. In other cases, a developer will give a mandate to a broker or channel partner who will sell the inventory.
The sourcing and closing are the responsibility of the channel partner. Such channel partners enjoy a larger brokerage from the developer. The lead generation spent is either done by the channel partner or by the developer. The brokerage from a developer in the former case can be up to 10-12%; in the latter cases, the brokerage on the per unit sales is 8-10%.
Channel partners or brokers may choose to either take the mandate for a developer or work on the individual sales of units. The difference between a mandate and retail sales is that in mandate, an agreement is signed where the CP is directed to sell a certain number of units in a certain period.
The MoU is a legal binding between both parties. In retail sales, the broker may choose how many units he wishes to sell in a period of his discretion. A CP may sell 100 flats in two months out of 700 units available in the project and may move on to sell inventories of other projects.
What makes the mandate lucrative is the brokerage on per unit sale. Mandate is a high-risk effort for the channel partner hence the higher percentage. In retail sales, the brokerage is based on the ladder defined by the developer. It may start at 3% on every unit sold up to 10 units and increase to 5% on every additional unit sold with a capping of 15 units, and it goes on.
Retail sale is a low-risk effort, and most small and mid-size channel partners tend to work on the retail sales model.
Every developer or associated channel partner targets to clear 100% of inventory in a record time. Such feats reflect favorably on the developer brand as well as the quality of the project.
100 units in 60 days can be further broken down to 1.6 units per day for 60 days. As all the major business happens on weekends, 60 days will have 16 weekends (Saturday and Sunday). The sales team must sell 6.25 units every weekend.
A typical sales funnel looks like the below:
- Total Leads: Lead generated from all the lead generation activity.
- Qualified leads: Leads who have a genuine requirement/are looking to purchase.
- Site Visit: Qualified leads who come on-site visit.
- Closure: Qualified site visit, which completes the purchase.
A total of 500 leads is required to generate 100 qualified leads converted to 10 site visits, yielding 1 closure.
Therefore, in order to close 100 units in 2 months, 1000 site visits will be required.
What the clients want to experience when talking to the sales team:
When talking to the sales team, clients want to experience a welcoming and informative environment that helps them understand the potential of the property they are interested in. They want to feel like they can ask questions and get honest and accurate answers without feeling pressured or rushed. They also want to be able to visualize themselves living in the property. This means having access to all areas of the property, including the model unit, and seeing and feeling the finishes and details up close.
Closing the deal: Listen with interest
Listen carefully to your client’s concerns, understand their unique situation, and help them make informed decisions that align with their goals. I also use my knowledge of the market to provide guidance on pricing and marketing strategies that will help them achieve their desired outcome.
Real estate is constantly evolving, and you need to be able to adapt your strategies accordingly. So, remind yourself always not to get complacent. Staying on top of industry trends and developments is paramount.
Being proactive is key to driving business. This is just textbook good sales principle. Whether leveraging new marketing channels or adjusting your sales techniques, you must be willing to embrace change and try new things. You can’t just sit back and wait for business to come to you. You must actively seek new leads and opportunities and be willing to put in the work to close deals.
Types of Real Estate Developers
The developers in the residential real estate segment can be divided into three categories:
A: Developers who develop and deliver townships, commercial and residential units, etc.
B: Developers who develop multistory apartments, but may or may not venture into the commercial segment.
C: Developers who do not buy land but instead enter into a joint venture with the landowner and develop single-story apartments that range from the ground plus 4 floors to ground plus 10 floors.
Irrespective of the Category, every developer wishes to sell off their inventory at the earliest. An average sales number would be 25-30 units sold monthly with good team strength and lead generation capability.
Marketing for Real Estate: Brand building & lead generation drives sales.
Real Estate is a high-value, high-risk, and long-term investment. Category A developer sells at high ticket sizes, endorsing the importance of maintaining brand credibility and trust. The larger the ticket size, the larger the risk capacity.
Category A, developers have a vast pool of loyal investor base developed after years of fulfilling the promise of delivery and a robust brand positioning.
For example, Hiranandani Developers – high-quality projects are priced higher than other projects in the vicinity. People still buy from Hiranandani banners because the projects set them apart.
As we go from A to C category projects, the brand-building efforts reduce drastically.
Though each developer from the above Category wants to move up in the hierarchy and achieve the status of category A, each Category has a pre-defined rule for spending on branding and lead generation. Lower the ticket size and unit to sell, lower or negligible the marketing spent on branding as the focus is more on lead generation.
Lead generation for Real Estate
Lead generation for real estate involves identifying potential clients interested in buying, selling, or renting properties. This process often involves collecting contact information and qualifying leads to determine their level of interest and readiness to make a real estate transaction. Effective lead-generation strategies can help real estate agents, and brokers build a strong pipeline of qualified leads, which can ultimately lead to more successful transactions and increased revenue.
- Online advertising
- Content marketing
- Referral marketing
- Networking
- Direct mail campaigns
- Cold calling
- Partnering with brokers and other professionals
In-house Sales Team Vs Outsourced Team
It is a standard these days that not every developer will have a dedicated sales team to sell the inventory of their latest projects. Either a developer will have a closing team sitting at the site while brokers or channel partners do the sourcing of clients. In other cases, a developer will give a mandate to a broker or channel partner who will sell the inventory.
The sourcing and closing are the responsibility of the channel partner. Such channel partners enjoy a larger brokerage from the developer. The lead generation spent is either done by the channel partner or by the developer. The brokerage from a developer in the former case can be up to 10-12%; in the latter cases, the brokerage on the per unit sales is 8-10%.
Channel partners or brokers may choose to either take the mandate for a developer or work on the individual sales of units. The difference between a mandate and retail sales is that in mandate, an agreement is signed where the CP is directed to sell a certain number of units in a certain period.
The MoU is a legal binding between both parties. In retail sales, the broker may choose how many units he wishes to sell in a period of his discretion. A CP may sell 100 flats in two months out of 700 units available in the project and may move on to sell inventories of other projects.
What makes the mandate lucrative is the brokerage on per unit sale. Mandate is a high-risk effort for the channel partner hence the higher percentage. In retail sales, the brokerage is based on the ladder defined by the developer. It may start at 3% on every unit sold up to 10 units and increase to 5% on every additional unit sold with a capping of 15 units, and it goes on.
Retail sale is a low-risk effort, and most small and mid-size channel partners tend to work on the retail sales model.
Every developer or associated channel partner targets to clear 100% of inventory in a record time. Such feats reflect favorably on the developer brand as well as the quality of the project.
100 units in 60 days can be further broken down to 1.6 units per day for 60 days. As all the major business happens on weekends, 60 days will have 16 weekends (Saturday and Sunday). The sales team must sell 6.25 units every weekend.
A typical sales funnel looks like the below:
- Total Leads: Lead generated from all the lead generation activity.
- Qualified leads: Leads who have a genuine requirement/are looking to purchase.
- Site Visit: Qualified leads who come on-site visit.
- Closure: Qualified site visit, which completes the purchase.
A total of 500 leads is required to generate 100 qualified leads converted to 10 site visits, yielding 1 closure.
Therefore, in order to close 100 units in 2 months, 1000 site visits will be required.
What the clients want to experience when talking to the sales team:
When talking to the sales team, clients want to experience a welcoming and informative environment that helps them understand the potential of the property they are interested in. They want to feel like they can ask questions and get honest and accurate answers without feeling pressured or rushed. They also want to be able to visualize themselves living in the property. This means having access to all areas of the property, including the model unit, and seeing and feeling the finishes and details up close.
Closing the deal: Listen with interest
Listen carefully to your client’s concerns, understand their unique situation, and help them make informed decisions that align with their goals. I also use my knowledge of the market to provide guidance on pricing and marketing strategies that will help them achieve their desired outcome.
Real estate is constantly evolving, and you need to be able to adapt your strategies accordingly. So, remind yourself always not to get complacent. Staying on top of industry trends and developments is paramount.
Being proactive is key to driving business. This is just textbook good sales principle. Whether leveraging new marketing channels or adjusting your sales techniques, you must be willing to embrace change and try new things. You can’t just sit back and wait for business to come to you. You must actively seek new leads and opportunities and be willing to put in the work to close deals.
