The Truth About Paid Leads

If you’re new to the business or maybe haven’t always done the best job of building a database, you might wonder how to get real estate leads. It’s possible to move pretty quickly to get names in your database and make connections. 

I’m not a huge fan of outsourcing my business and paying for leads on Zillow or Realtor.com or any of the other big companies. But all that being said, there are times when you or your business need a boost. 

• The fact is, there is a place in every real estate agent’s business for paid leads. 

Whether you prefer buying leads or have an external source of real estate lead generation, such as from a broker or third party, you have to keep your expectations for these leads grounded in reality. There are some drawbacks to working with the big companies, but every so often, you can get lucky and get a connection out of one of those paid leads – and that’s a name to add to your database. That’s the inherent value of a paid lead. 

We have a paid lead program at ROOST Real Estate Company, but when we talk about that, I’d like to be careful in saying that the 30, 40, or even 50 leads you’ll get every month in your inbox are not always going to be today’s business. But you can get into a habit of working these leads to find someone and build a connection. It’s worth seeking them out to find someone that’s a 5-star person, or at least willing to talk to you and have a conversation because that can be a jumping-off point to a more sustainable, lasting relationship. If you can put even some of those names into your database, that’s a real win from a paid lead. 

If you’re paying hundreds of dollars a month buying real estate leads from big companies and not getting new business to cover those costs, is it really worth it?

• You shouldn’t expect to get rich immediately from buying leads. 

Instead, you should be on the lookout for diamonds in the rough. There are far more chances in a paid lead that result in getting a connection and an addition to your database, so that’s worth doing. Because of that, there’s a place for paid leads in your business if you need to build a database. 

Look at names in your database – and adding names to your database – as making deposits in your personal investment account. You’ve got to think about this practice like you would an IRA or a 401k or other retirement accounts because this database, and the connections you’ve built inside of it, are what will continue to generate leads for you throughout your career. As you add names, you’re putting money in your personal investment account for years and years to come. 

Another element to consider when thinking about the truth of paid leads – both good and bad – is the relative quality of these leads. My personal experience with Zillow and Realtor.com is that it’s a free-for-all. 

For example, someone wants to ask a question about a house. What happens?

• That question goes out to everybody on the market on a first-come, first-serve basis. Sometimes the person who asks for the lead gets bombarded by half a dozen agents in 30 minutes. 

That can mean that the lead quality isn’t great. Some avenues help generate better leads. At ROOST, we’ve partnered with a company called Real Geeks. So, if you go to the ROOST website and click the search pages, you’ll see a standard page that’s similar to what others have, but it’s set up to allow searches in the markets where we do business. 

Right now, we have it set up to search:

• The Columbus, OH area
• The Dayton, OH area
• Southwest Florida
• Florida’s Space Coast

Through our website, we get approximately 50 to 60 leads a month that we circulate to our agents, round-robin style. The relative quality of leads sourced through a real estate lead generation website is better than what agents can pay for on Zillow or Realtor.com, too. In my opinion, a lot of people feel like they’re getting burned by the bigger companies because they can get bombarded by calls from agents. 

Our system helps people who come to ROOST look for listings they’re actually interested in vs. going to a site like Zillow and just liking houses because they look cool and not because you have any intention of moving. 

When people come to the website and actually spend enough time to enter their email address or phone number, that’s a better lead than you’ll get elsewhere. 

The Real Value of a Lead

There’s value in working with the right brokerage, and under the right business model, that benefit can extend to the quality and quantity of your leads. We waste a lot of leads because sometimes we don’t have available agents because they’re too busy. Some agents take all they can, but sometimes there’s still not enough coverage. 

However, we’re fortunate that we can provide that for our agents. We’ve got a solid database with leads, and we’re able to give our agents access to that for free. That’s the beauty of a referral-based model that stems from a healthy database of names. 

At ROOST, we work by a round-robin style of sharing leads. This is a great way to make sure there’s even distribution of what leads are incoming and available. One agent gets this lead, the next agent gets the next, and so on. We don’t ask for any monthly fees for access to our leads, we don’t charge a tech fee. 

I hope our database gets much, much bigger in the future – but regardless of how big it gets, I’m passionate about ensuring our agents have that access and opportunity available to them. I want people to be able to scale their database from zero to 100 to 150 or even beyond. 

Final Thoughts

At the end of the day, the names in your database are going to be a valuable tool that helps you keep a steady incoming flow of business. Paid leads do have value, but only if you’re using those leads to add names to your database and grow your business. If you get caught up in the shuffle of dealing with the big companies, you’re going to run into lots of competition, and you’re going to burn yourself out chasing down leads and fighting with other agents to close a sale. 

Look for those diamonds in the rough and try to find leads that are worth paying for – and that’s how you’ll make your time and energy more worthwhile. By applying some calculated strategy and having solid real estate lead generation ideas, agents can sort through leads and find the ones that seem most promising. From there, maintaining those connections and using them as a jumping-off point will lead you to other names – and more leads you didn’t pay for. 

It all comes back to that database full of people you know, trust, and like to work with. And, if the connection is strong enough, that feeling will be mutual. That’s where the true success in real estate is found, and you can’t always quantify its value because, for many agents, those connections are priceless.