Is now the right time to buy real estate leads?
According to NAR Chief Economist Lawrence Yun, mortgage rates hit a 20-year high in October 2022. Meanwhile, interest rates skyrocketed.
Since then, things appear to be easing up for buyers. “The upcoming months should see a return of buyers,” Yun said, “as mortgage rates appear to have already peaked and have been coming down since mid-November.”
That’s definitely good news for buyers. But that’s not to say everything’s going to be hunky-dory for all consumers from now on.
We’re likely to see at least a “cooling” or a downturn in 2023.
What challenge could this present for you? Getting more leads, especially listing leads.
The solution is to have a variety of lead generation strategies in your arsenal now (both paid and unpaid) so you can set yourself up to experience success during the dry times.
But the questions remain… Should buying real estate leads be something you do this year? Are paid leads even worth it?
Is It Worth It To Buy Real Estate Leads?
According to NAR’s membership profile research, roughly 1 in 3 REALTORS® (32%) generated business by acquiring leads through a third-party provider.
And believe it or not, it’s not just new agents who are buying leads. In fact, it’s the most experienced agents (those who’ve been in the industry for 16 years or more) who generate business most often by buying real estate leads.
Many top-performing agents swear by it. Take Matt Tenczar, for example. He’s a REALTOR® from the Bay Area who has closed nearly 700 transactions over the last 31 years.
To see such remarkable success, he has implemented a number of effective lead generation tactics. (Learn some of his secrets by checking out Market Leader’s webinar called “Shift Happens: How To Thrive in Any Market.”) Over the last decade or so, one of these tactics has been acquiring leads through Market Leader.
Or consider Julia Levy’s story. She’s been a real estate professional in North Florida for over 40 years, and she too has seen success buying real estate leads from Market Leader – once scoring six million dollars’ worth of closings in nine months.
So is it worth it? The best and most accurate answer to that question is this: It can be.
No one can guarantee success will come as a result of buying leads for real estate agents. Of course not. That part – the follow up and follow through – depends on each individual agent, their skill level, and their unique situation.
Sure, there are some tried-and-true best practices for generating leads. But there aren’t any “silver bullets.” What works well for one agent might not work at all for another.
But if there’s any guarantee to be made here it’s that paid leads can indeed pay off.
Buying leads is a common practice among agents of all experience levels because it has three main advantages:
1. It Allows for Consistency
Most agents fail to make it past their first five years in the business. The reason is often that they undergo a series of boom-and-bust cycles.
Why? Because they fail to generate new leads until they’ve closed transactions with their current client list. It’s like being a farmer who waits until harvest time to plant seeds.
As a result, these agents endure long stretches of time between earning a commission. At some point the dry spells become so long that they can no longer afford to stay in the industry.
On the other hand, many top-producing agents avoid these cycles by getting (i.e., buying) a steady stream of leads every month in order to get new clients and close transactions – at all points throughout the year, regardless of seasonality and housing market shifts.
2. It’s a Passive Lead Generation Strategy
The concept of online lead generation can be too abstract, so let’s think about it in more concrete terms. Imagine if you had a team of, say, two or three assistants whose sole responsibility was to go out and find leads for you.
Meanwhile, as your assistants are generating leads, you can focus on generating leads in other ways, building relationships, working with clients, and closing deals.
Then once a month, your assistants would round up all the leads they were able to find, put them on a bus, and drive them straight to your office.
So once a month – every month – you’d have a guaranteed number of buyer and seller leads to add to your CRM. All without having to do any of the work yourself.
That’s essentially what the best real estate leads can do for you.
3. It Has the Potential for a Strong ROI
Buying real estate leads can be costly. The pricing of lead generation services varies greatly, but you can expect to pay hundreds each month.
But if you convert even just one or two of the leads you get, you will likely end up making thousands in return. Like many top-performers have said, buying real estate leads has the potential to produce the best ROI out of all of your other lead generation strategies.
The best way to know if it’ll work for you is to give it a genuine trial run so you can calculate your own ROI. One easy way to get a ballpark figure is to see how many quality leads you can generate out of every $100 you spend on paid leads each month.
A word of caution. As tempting as it is, don’t expect an immediate return on investment. Like all seed-planting – ahem – lead generation strategies, it may take a while before you see results. After all, this is real estate, not a get-rich-quick scheme.
How To Find the Best Paid Lead Sources
As soon as you start looking to buy real estate leads, you’ll notice there are many different providers out there. It can be difficult to know which lead sources are good and which are… not so good.
The good ones will bring you legitimate, high-quality leads who actually have the potential to become clients. And the not-so-good ones will waste your time and energy (and money) with poor quality “leads” who – for a variety of reasons – will never become clients, no matter how good you are at follow up and lead nurturing.
Here’s the key: Look for providers who can bring you qualified and exclusive leads. Let’s break that down.
What Are Qualified Leads?
Even though you might feel like it at times, you don’t need just any leads to come your way. You need “qualified” leads. Here’s what that means.
- They’re willing to buy or sell, either now or sometime in the not-so-distant future.
- They are looking to buy or sell in your area(s).
- They aren’t already working with another agent.
- Their finances are in order. Prospective buyers who are pre-approved for a mortgage and have the right budget. And prospective sellers who are willing and able to sell at a price that makes sense according to the current market.
- Ideally, they’re interested in speaking with you specifically, not just any agent.
No lead providers can promise that 100% of the leads they generate for you will match that description. But it’s helpful to know that some are better at finding qualified leads than others.
What Are Exclusive Leads?
Most lead generation companies send leads to multiple agents at the same time. That can be as frustrating as it sounds. It’s a rat race.
You have to elbow your way through your competition to be the first one to make contact. Not only is that inconvenient, stressful, and anxiety-inducing for you as the agent, but it’s also irritating for consumers. No one wants to feel like a guppy in a pool of hungry sharks.
So as you’re shopping around, look for the word “exclusive.” To say that leads are “exclusive” means that they will be sent only to you, not a bunch of your competitors.
Make sure you’ll get what (or rather, “who”) you pay for.
How Does Market Leader Compare to the Rest?
Market Leader is a pioneer in lead generation and contact management systems. We’ve been helping real estate professionals grow and manage their businesses since 1999.
Our mission is to make life-long customers through outstanding leads, software, education, and customer support.
With Market Leader, you can get a guaranteed minimum number of exclusive leads from your desired areas delivered each month.
For quick reference, here’s how Market Leader’s buyer and seller leads compare to those of other providers:
Take the first step toward building your pipeline and keeping it full all year long. Learn more about what it means to buy real estate leads from Market Leader.