In the hustling, bustling world of real estate, agents, brokers, and even investors know that the lifeblood of their success in the industry lies not just in closing deals, but in finding them in the first place. We’re, of course, referring to real estate leads. Leads are potential sales contacts that can be sourced from a wide variety of different channels, often serving as a gateway to prospective clients. While there are a range of methods for real estate lead generation, buying real estate leads has become a popular choice for countless professionals.
With lead generation, professionals have to ask themselves a plethora of questions. Is every lead worth pursuing? Or more to the point of this article, is buying real estate leads worth it in a financial sense? We’ve crafted this comprehensive guide to delve deep into the world of buying real estate leads, assessing the value of the practice, the various sources from which leads can be acquired, and the intricacies that go into making the right choices.
Dive in and get ready to empower your real estate venture with knowledge that could potentially revolutionize your lead acquisition strategies.
Real estate leads are essentially the starting points or initial contacts that have showcased some clear potential to become future collaborators in real estate transactions. Before you begin to source and collate real leads, you often need to complete the process of prospecting, which involves reaching out to people who may or may not have any interest in working with a realtor, investor, or agent.
Once prospecting has been completed and the unrealistic prospects are filtered out, professionals are left with leads. Leads are individuals or entities who’ve at least shown some interest in buying, selling, leasing, or investing in real estate properties. A quality lead could be someone who filled out an interest form on a realtor’s website, a visitor at an open house, or simply someone who inquired about a property through a social media post.
In the highly competitive, mile-a-minute world of real estate, identifying, qualifying, and nurturing these leads is vital, with every lead representing a potential deal, and in turn, a commission.
Leads will arrive at a realtor’s table at various stages of readiness. Many may be in just the earliest stages of their home-buying journey, doing nothing more than conducting preliminary research or window shopping. On the other hand, some leads will be actively looking and ready to put money down on a purchase. Understanding where each lead lies in their buying, renting, or selling journey allows realtors to carefully tailor their approach, ultimately leading to higher conversion rates.
Before you think about buying leads for real estate deals, you need to be fully aware of all the different leads that can be sourced. Real estate leads can be grouped based on a variety of different criteria – whether segmented based on where they’re sourced, the readiness of the potential client, or the method of acquisition.
Here are some of the major types:
Online Leads: Online leads are potential clients that are found through prospecting on the internet, whether through a realtor’s business website, social media platforms, or the posting of online listings. With the rise of digital technology becoming more and more prevalent every day, 97% of real estate searches start online, showcasing just how important it is to have a strong online presence.
Referral Leads: Arguably the most valuable form that leads can come in, referral leads come to you through recommendations by past clients, friends, or colleagues – whoever sent the lead your way, the power that word of mouth carries can’t be understated. According to a survey by the National Association of Realtors (NAR), 35% of sales start with referrals, making it clear just how essential they are to the industry.
FSBO Leads (For Sale By Owner): Leads like this aren’t always easy to find, let alone convert, as by nature they’re homeowners who are trying to sell their property without the aid of a realtor. However, they still have the potential to become clients because many FSBO sellers eventually turn to agents for help, especially if their property isn’t selling. These leads may require some patience, but they have the advantage of being defined by individuals who are actively ready to sell.
Expired Listings: Expired listings are properties that have been on the market in the past, but didn’t sell for whatever reason. The owners of these listings are often frustrated and ready to embrace new strategies and agents, making them a potential high-quality lead source.
Direct Mail Leads: Sending out mailers is a traditional, even old-fashioned way of sourcing leads, but it can still be highly effective. Direct mail leads are potential clients who get back to you in response to direct mail campaigns, whether you choose to send out postcards, newsletters, or brochures.
Event or Open House Leads: Individuals who attend open houses or real estate events showcasing properties make for great leads. The fact that they took time out of their day to visit makes them a warm lead, however, if the event is busy, further qualification will be needed.
Before you know how to buy real estate leads, understanding each type of lead and the strategies required to convert it is essential. Not only does a proper understanding of leads guide realtors in allocating their time and resources effectively, but it also helps to guarantee that each lead is approached with the right strategy, increasing the chances of a successful transaction.
When contemplating the best real estate leads to buy, it’s not a simple ‘add to cart’ purchase process. You need to carefully consider a variety of factors to determine if the acquisition is valuable and profitable.
Here are a few key elements that you should bear in mind:
Source of Lead Generation: It’s vital to properly understand where these leads are coming from, as this will impact how likely they are to convert. Are the leads coming from reputable sources or just scraped from various online platforms? Quality is preferable over quantity, so make sure your leads come from a trustworthy place.
Cost vs. Potential ROI: How much does each lead cost? More importantly, how does this cost compare to the potential return on investment? If you’re spending a significant amount on leads from a certain place but the conversion rate is low, then you should reconsider where you’re looking.
Lead Exclusivity: Exclusivity is important in the competitive realm of real estate. Are the leads yours and yours alone, or are they being sold to multiple agents? Exclusive leads tend to be pricier but come with a higher conversion rate, as there aren’t as many agents scrambling to make deals.
Lead Readiness: As mentioned prior, leads come at various stages of their buying journey. Some might be in the early, window-shopping phases, while others are primed and ready to make a purchase. Ensure you know what you’re getting before putting money down.
Feedback and Reviews: Before purchasing any leads, it’s always wise to look up reviews from other agents who’ve bought leads from the same source. The experiences of other professionals will undoubtedly provide valuable insights.
Lead Replacement Policy: Does the provider offer a replacement policy for leads that turn out to be duds or irrelevant? Some lead providers guarantee a certain level of quality and will replace or refund leads that don’t meet the criteria, so your investment isn’t wasted.
Support and Training: Some lead providers offer valuable training sessions or resources on how to effectively convert the leads they sell. This added service can make a difference, especially for agents new to buying leads.
There are many limbs to the real estate industry, and thusly there are many sources for its leads. We’ve put together a list of the best places to buy them, along with the associated pros and cons:
While Zillow is primarily known as a listing site, their Premier Agent branch allows professionals to pay for high-quality leads.
Advantages: ZPA is known for its vast user base, and its capacity to offer high-quality leads. The system can also provide exclusive ad placements for its premium agents.
Disadvantages: Sourcing leads on Zillow can be costly, with it being a base for massive quantities of competition among agents due to its popularity.
As the top competitor to Zillow, with a more agent-focused approach, it’s no surprise that you can purchase leads from their platform.
Advantages: Realtor offers a vast range of lead generation options and tools, while also give agents the potential to widen their wide reach.
Disadvantages: Just like Zillow, it can be on the pricier side, while also being one of the top choice for lead acquisition.
This is a bit of a cheat answer because their official statement is that they “don’t sell leads” – rather, Redfin sells referral space on their website, alongside client reviews, so leads can find you themselves.
Advantages: Because of the nature of a referral fee rather than upfront costs for leads, clients that you come into contact with are usually more serious in their interest.
Disadvantages: You only pay when the deal closes, which means that Redfin takes a bigger chunk at one time.
From the team at PropertyBase, BoldLeads blends lead acquisition with full-service CRM capacities. With its monthly spending fees, agents get automated marketing services and engagement indicators.
Advantages: Unlike many of the other sources on this list, BoldLeads actually offers exclusive territories and leads for agents, while also acting as an all-in-one solution.
Disadvantages: Some users find their platform challenging to navigate, with the CRM platform considered a little bit dated.
Zurple is a great choice for lead generation or buying, as it allows you to create branded home search websites for buyers, along with providing lead nurturing features.
Advantages: Zurple is known for its excellent AI-driven, automated conversation software that actively engages leads until they’re ready to convert.
Disadvantages: It’s more of a wide-spanning management tool than a straightforward lead source, requiring integration with other platforms.
With leads collated from HomeValues.com and software integrated with Leads Direct, Market Leader offers a monthly subscription and pay-per-lead model.
Advantages: Market leader offers full exclusivity with the leads that you acquire, with a guaranteed number of leads provided every single month.
Disadvantages: The software lacks lead tracking features, so must be integrated with another CRM system.
When choosing where to buy real estate leads, it’s vital to not only consider the financial costs but also the long-term value, how well it will fit your business model, and how easily it can be integrated with your existing CRM.
In the real estate market, staying ahead of the competition is everything. Buying real estate leads can be a strategic move in any agent’s playbook for securing potential clients and expanding their business reach.
Over this blog, we’ve covered.
But beyond the specifics of buying leads, it’s essential to remember that not all leads are created equal. The key lies in discerning which ones align best with your business needs, long-term goals, and capabilities. With a well-thought-out strategy and the proper sources in place, buying real estate leads can be a valuable investment.
Take what you’ve learned today and apply it! There are plenty of ways to invest in yourself as a real estate agent, and allocating some funds to buy leads for real estate should be on your business checklist list. For more insights into the real estate industry, check out our blog today.
