Is it worth paying for real estate leads?

Buying leads can be a big part of your business and whether or not it'll work depends largely on your skills as a marketer. It's also important that you know what kind of lead will help you grow your business. So we decided to ask some of our favorite realtors about how they use marketing tools like leads in their businesses—and if they think these services are worth purchasing. Here's everything you need to know!

Our first question was simple: Is using a service like Zillow worth paying for leads? We're talking specifically about this one here because while there are other sites out there offering similar services, Zillow has been around longer than any others. The company started back in 2005 and since then has grown into a major player with over 30 million users each month. And according to them, "over 90 percent of all U.S. homebuyers start their search online."

"Zillow provides a wealth of information on homes for sale," says Matt McAndrews, broker/owner of RE/MAX Elite in San Diego, California. "It’s very helpful when working with buyers who want to see exactly what their new neighbors look like before making an offer. For sellers, seeing how many people have viewed their property gives us insight into potential interest, which helps determine pricing strategies."

He continues: "The site offers valuable statistics such as number of days on market and average price per square foot (which varies widely by city). These insights provide invaluable data points for both sides of the transaction. It makes sense to leverage those resources to sell more properties!"

This doesn't mean everyone agrees though. According to Chris Somma, president of Coldwell Banker Commercial Real Estate Services Inc., it may depend on the type of deal you're doing. He explains: "In today's environment, it does take time to generate quality leads. It takes a lot of effort to get good leads from sources outside of MLS [Multiple Listing Service] listings. If you are selling, having access to high-quality leads can really speed things along. On the flip side, if you are looking to purchase, it would be difficult to justify spending money on generating leads unless you were planning to list multiple houses quickly. You might consider hiring someone else to do the legwork instead."

How much should I pay for sales leads?

Next, we wanted to find out how much value people put on different types of leads. In addition to asking the pros, we surveyed hundreds of thousands of members on our website and found plenty of opinions. A few highlights include:

Realtor: $20 - $50

Agent: $0-$10

Buyer agent: $15 - $30

Forum post: $5 - $25

Blog comment: $5 - $25

Facebook ad: $5 - $15

Twitter tweet: $5 - $25

LinkedIn referral: $2 - $5

Google AdWords bid: $3 - $5

Quora answer: $1 - $20

Pinterest pin: $4 - $12

Instagram photo: $3 - $10

Craigslist listing: $10 - $100

And finally, we polled our readers to find out if they believed leads could actually bring in serious cash flow. Over 4,000 answered yes, but another 3,600 said no. That means less than half agree that leads can truly be profitable, so don't expect to break even right off the bat. However, some say they've made enough money that it outweighs the expense. One commenter wrote:

Realtor: My agency charges clients anywhere between $75 and $150 dollars for every call generated. With just two calls a day, that adds up fast. But after a year of consistently booking 5+ showings per week, my client base grew significantly, which allowed me to increase my prices. With three full time agents now running the office, we only have to charge $125 per head. Not bad considering what we used to spend.

Agents: I'm still trying to figure out how to monetize my own leads…it seems to be too expensive to send traffic directly to my website. Maybe I should hire a virtual assistant to handle that task.

To find out where you stand, check out this table below.

Do Realtors pay for leads?

If you're wondering whether or not realtors pay for leads, the short answer is yes. While there aren't any hard rules to follow, it's generally accepted that brokers and agents are responsible for finding qualified prospects through various methods. This includes cold calling, networking events, social media ads, email campaigns, etc. When it comes down to deciding whether or not to pay for leads, however, the decision ultimately rests on your budget. As long as you're willing to invest in the process of getting leads without the guarantee of guaranteed results, it shouldn't matter whether or not you decide to pony up for leads yourself.

"There are several ways to acquire leads. Some are better than others based upon your location, the target demographic, and how much time you have available to devote to the process. Generally speaking, you should always try to go direct whenever possible. Buying leads requires additional overhead costs, and depending on the seller’s motivation, may result in lower net values compared to going direct."

According to Jason Riggs, owner of Century 21 Premier Properties in Las Vegas, Nevada:

"Yes, we pay for leads. I usually pay anywhere from $500-$1000 per active lead. They must come from a reputable source, be recent, and preferably within 10 miles of our area. Most often, the leads are provided via text messaging. Many times the caller isn't interested and simply hangs up. Another thing to keep in mind, you want to focus on areas that fit within your local market. This way you can maximize your leads and minimize wasted time and gas expenses. Also, you'll likely receive fewer leads from certain geographic locations due to lack of demand."

Finally, let's round everything up by answering the ultimate question: Does it pay to buy real estate leads? Yes, it pays! At least according to the experts interviewed above. Just remember that you won't necessarily get instant gratification. Depending on the method of acquiring leads, it could take weeks or months until you see any return on investment.

Still, even if buying leads won't instantly turn a profit, you will eventually reap the rewards of increased exposure. Plus, you'll learn a ton about your industry and hone your craft. All in all, it's definitely worth doing whatever it takes to become successful. Learn more about building your brand and growing your network on our blog.

Real estate agents rely heavily on buyers and sellers looking them over before deciding whether or not they want their services in a given area. The more exposure these people have to your expertise, the better chance that someone will hire you when they're ready to sell or purchase. Unfortunately, there's no one-size-fits-all approach here -- each agent has different needs, which means we all have to figure out our own ways to increase visibility.

It can be tempting to try something new, like signing up with a lead generation company to supplement what you've been doing so far. But if you don't know exactly what you should expect from those leads and how much time and money this could actually save you down the road, it might just end up being another expense without any payoff. So let's take a look at what some of the leading experts think about leads and see if there are any good reasons to invest in them.

How much do real estate agents spend on leads?

The average amount spent by REALTORS® on leads varies widely depending on who you ask. In general, though, "referral fees" start around $40 per month (or less), while other agencies charge anywhere between $150-$300/month. That doesn't sound too bad since many of us would love to earn hundreds of dollars every single day, but keep reading below to learn why this may not always be as simple as it sounds.

If you're using a site such as Zillow to gain access to potential clients, then you'll probably find yourself spending very little money at all -- especially compared to what you'd likely spend if you were sending cold emails directly to prospects. As long as you're making sure that everyone knows you're available via social media, you shouldn't need to worry about getting referrals through ads or anything else. If you're already generating enough interest online, then you won't even need to use any kind of website to generate leads. Just focus on finding quality traffic to your listing websites instead!

For example, one agent reported spending only five cents per visitor on Facebook advertising, while another said he was able to get leads for under three dollars each after running Google AdWords campaigns for two weeks straight. On sites like Craigslist, meanwhile, you can often score leads for free, although you may need to put in extra effort to convince anyone to contact you first. Keep in mind that the leads generated in this way aren't necessarily going to convert into sales right away either. You still have to work hard to close deals, and having cheap leads isn't always going to help you achieve that goal.

Finally, remember that you can also build your brand reputation by simply posting listings on multiple platforms. For instance, if you live in Miami and are trying to attract buyers across the country, putting up a post saying "Miami Real Estate Broker Wanted!" on both Yelp and Trulia isn't really necessary. Instead, consider sharing specific details about your experience and education along with photos of recent projects. Your prospective client will come to realize that you're not just another fly-by-night operator, and they will trust you when you tell them how great you are. This is true regardless of whether or not you ever send them an email or call them back.

How much do you pay for leads?

As mentioned above, you can generally expect to pay somewhere between $0-$100/month for leads. Of course, prices vary from agency to agency, but it's important to note that the higher number isn't necessarily indicative of superior service. It depends largely on how well you market yourself, how effectively you reach out to potential customers, and how dedicated you are to building relationships with them. There's nothing wrong with shelling out big bucks to advertise your business whenever possible, but it takes a lot of time and energy to set everything up properly. Plus, you need to be willing to change things up regularly to maintain momentum. And as I mentioned earlier, you shouldn't feel obligated to continue working with certain providers once you hit your target audience anyway.

How do Realtors get free leads?

Of course, it's possible to get leads for free if you know where to look. Many realtors will share their contacts with others who are interested in selling homes, and you can sometimes find similar lists on Twitter or Facebook. These kinds of groups tend to be fairly small, however, meaning that you'll need to go beyond these networks to find a larger pool of qualified candidates. Some professional associations offer memberships that include access to mailing lists and databases of homebuyers and sellers, but these typically require annual dues and membership applications.

There are plenty of places where you can find lots of opportunities to meet local homeowners and renters looking for representation. One thing to keep in mind, though, is that you never know when you'll run into the person whose house you're currently marketing. They may decide to move soon, or maybe you found the perfect property -- either way, the next step is easy to miss. Don't forget to follow up with these folks immediately after you complete a transaction, because you never know when they'll need to refer you again.

In addition, you can always sign up for free events throughout the year. Some realtors will hold open houses specifically for people who are actively seeking homes to rent or buy, and you can usually register for these events months ahead of time. Once you arrive, you'll be greeted by enthusiastic hosts eager to show off their properties, and you can easily make dozens of connections during the event itself.

Is it worth it to buy leads on Zillow?

Zillow offers several options for buying leads. Among the cheapest ones are their Buyer Leads program, which costs $30 annually and gives you access to thousands of active leads. More expensive packages allow you to receive unlimited leads and track performance metrics like clickthrough rates, response rate, and conversion rates. Each package comes with its own perks, so check out the full list of offerings before committing to a particular plan.

But even at the highest price point, you can only get 10% of the total leads that Zillow generates each month. Most of the rest goes to third party advertisers, and it's difficult to say which ones are offering the most value. So unless you can afford to wait until Zillow receives enough leads to fill your quota, it's unlikely that your investment will yield high returns.

Bottom line: while it's definitely a nice perk to get access to leads, you'll probably regret spending so much cash if you're unable to produce enough results to justify the expense. Even if you do manage to turn a profit, you'll lose all of that goodwill by taking advantage of desperate families who desperately needed your assistance. After all, these are the same people who had to resort to illegal tactics and scams to land themselves in your position in the first place. What makes it worse is that you're literally stealing from the very people you claim to support.

That's why we recommend sticking to methods that involve minimal financial risk, while simultaneously providing excellent customer service and helping you grow your business. No matter where you fall in this spectrum, it pays to stay focused on your goals rather than chasing shiny objects.

Buying and selling homes can be an expensive endeavor, especially if you're not doing it full-time or have a lot of competition in your area. But even if you've got some serious cash burning a hole in your pocket, there's no reason to go without good leads when looking to buy properties—especially since many buyers are willing to shell out money to get what they want.

However, we wanted to find out whether or not investing in real estate leads actually makes sense from both a financial and time perspective. To that end, we reached out to several leading realtors across our network who offered their thoughts on this topic. Below, you'll see each agent's take on the matter (along with links to relevant articles) followed by my own personal opinion.

How much should I spend on real estate leads?

The first thing that needs to be considered before investing in real estate leads is exactly how much you want to invest. There’s a huge range here depending on what type of property you need to purchase, but generally speaking, expect to fork over anywhere between $100-$500 per lead. Of course, this amount will vary based on multiple factors like location and price, so keep those things in mind when choosing which leads to pursue.

If you don't have any specific requirements in terms of pricing, however, then you might just want to pick one number and stick with it regardless of whatever other considerations come into play. For example, say you decide to commit to spending $200 per month on leads until you find your next house. That means you'd have to wait approximately 12 months for your investment to recoup itself. If you were able to find a home within that timeframe, then you would have made back all of the initial investment plus interest!

Of course, you could always lower the amount you're willing to spend per lead and still save yourself a ton of time. In fact, this is likely the more realistic option for anyone who doesn't plan on purchasing anything right away. Plus, you won't sacrifice quality either way because we guarantee that every lead provided through LeadAdvisor is 100% verified and ready to close immediately upon submission.

Are paid leads worth it?

This point may seem obvious, but let me explain why it really matters anyway. Buying leads isn't just about getting something off the ground quickly, nor does it mean you can skip all the legwork involved in finding potential clients. Instead, having access to qualified prospects means that you'll be able to build a steady stream of income long after the deal has closed. This can help offset costs associated with advertising, marketing, and other expenses.

As mentioned above, the key factor determining whether or not you should consider investing in real estate leads comes down to two main questions: How much are you willing to pay, and how valuable do you think these leads are going to prove once you find them? The answer to these questions depends entirely on what kind of business model you use and how often you intend to re-invest in new leads.

For instance, someone operating a traditional brokerage firm may choose to focus solely on generating enough revenue from commissions to cover overhead while using outside sources only as needed. Meanwhile, someone running a referral service may opt to rely heavily on referrals alone instead of relying on outside sources at all. Whichever method works better for you, though, ultimately boils down to your comfort level and experience with the industry.

Another important consideration to keep in mind when evaluating the value of leads is the risk involved. You never know how well a particular lead is going to pan out until you try to contact him/her and set up a showing. Of course, it's possible that certain leads turn out to be complete duds, so it pays to err on the side of caution here too.

But again, the real benefit of investing in leads lies in the opportunity to generate recurring sales that allow you to grow your company faster than you otherwise would. And if that happens, you won't ever regret it.

Is it worth it to pay for leads?

It seems pretty simple: Would you rather pay $50 now or $150 later? Well, that's probably not quite the question you're asking, but it's definitely one you should ask yourself nonetheless. What we meant was, "What am I willing to lose in order to gain?" Because chances are, if you're already making decent money, you aren't hurting for funds. So unless you absolutely require additional capital to get started, paying for leads doesn't seem like such a bad idea.

On the flipside, if you're trying to start a business and your finances are tight, then perhaps it's a bit harder to justify shelling out money on leads. However, if you can handle the risk, then the payoff usually outweighs the downside. Especially considering the fact that your competitors won't be able to offer similar services.

Personally, I would recommend giving it a shot whenever you feel comfortable. It's certainly not guaranteed that you'll wind up with a successful listing, but you never know until you try. After all, sometimes people are surprised by how affordable real estate leads can be compared to other methods of acquiring listings.

Should I buy leads as a realtor?

There are plenty of ways to acquire real estate leads besides hiring a broker. Some people prefer cold calling, whereas others prefer reaching out via email. Still others prefer social media. Whatever method you choose, it's important that you follow proper protocol in order to protect your reputation as a professional.

In addition, remember that the more leads you have coming in, the less time you'll have to work on other tasks like negotiating offers or setting appointments. With that being said, there's nothing wrong with outsourcing part of your workload to experienced professionals. Not only will it make life easier for you, but it also helps ensure that you stay focused on what truly counts--making deals happen.

So yes, you can hire a professional to provide you with the leads you need. Just understand that it takes a lot of effort to produce leads, and you shouldn't expect results overnight. Also keep in mind that leads typically expire after 90 days, so you'll need to continually feed the machine with fresh leads. On the bright side, this process is completely automated, so you don't have to worry about handling calls or emails anymore.

Ultimately, the choice is yours. As long as you approach it logically and responsibly, you should have little problem staying profitable throughout the entire process.

Have you tried buying real estate leads? Are they worth the price tag? Let us know below!