Real estate leads cost

So how much does a real estate lead cost? Well, since we started our own lead generation company , we decided to put together our thoughts on what we think brokerages and agents need to know in terms of pricing before they work with a company such as ours. During our years in business we’ve noticed some common mistakes and questions, so feel free to read on ahead so you can avoid many of them.


Our research has concluded that people spend from 1 to 500 dollars on a lead. The real question is what kind of lead do you want and how hard do you want to work it? At 500 dollars a real lead should close very easily or at minimum come close to the process. This lead knows about you already and knows the house it wants with good credit, in fact this lead may even call you!On the other side a 1-15 dollar lead is someone interested in buying a house, but not necessarily urgently, sometimes they don’t qualify initially, however they may later in the future. These people may also need to be called and worked over.


The most important question is the the system you have in place for a lead. A one person team my want to pay closer to the 500 dollar range for guaranteed leads, which are easier to manage while a larger team may want a higher volume of leads at a lower price and be willing to work them more. Don’t forget to calculate in how much your time is worth as well. If you have a high value team and want to work them over more, be prepared to give each call your full effort and attention. A simple solution to managing a high volume of lower quality leads may be to get higher a salesperson at $15 an hour to comb through hundreds of them. Remember to hire well, this salesperson needs to do a great job with each representation of your company.


So back to the core question at hand how much does the standard real estate lead cost? Well if at the highest end you have leads from $250 to $500 that some may call referrals and at the lowest end you have leads from $1 to $15, which are merely a name and a number to call. We can conclude that the median price is around $100.


Now this $100 lead is not just a random opt in lead like the $1 to $15 dollar ones, however they aren’t people referred by trusted sources either. These leads are generated by companies and then cold called initially. If after the lead is called and expresses they are looking to buy a house in the near future land are want a property, which you have listed; You now have a $100 dollar lead in your hands.
For a bonus you may be wondering, what companies should I do business with? Well, tons of companies do lead generation. You should make sure the one you’re working with walks their talk. Make sure the companies are upfront and honest with you about how they establish their leads. If you can trust these people and you have an open platform for communication then all should be well. Also ask to see if you can pay at the end of the month (which is how we charge) so that if the leads aren’t to your liking and the system is failing your time wasn’t wasted. Any company trying to charge upfront with a contract is reeking of desperation. Don’t look for signing a 6 month commitment up front, the only reasons companies want this is if they can’t give you results and only want your money. We’ve heard a lot of our customers become ripped off like that in the past.


Now that you know how much you’re paying for leads, why don’t you find out how much leads you should be getting depending on what kind of money you’d like to make. Keller William’s Reverse Lead Calculator can help you solve this exact question. The equation assumes you’re receiving a 2.5% lead conversion, which is a great place to start. Remember that the higher your homes are priced the more commission you earn, therefore factoring in the income level of your leads isn’t a bad metric to measure as well.


Well That’s all the tips we have about buying standard real estate leads, if you’d like to talk more you can always contact us directly. How much do you think leads should cost and why?

1 Comment

  1. I would be willing to give a lead generation company a 25% referral fee.
    If you are going to distribute your leads this way please let me know.
    Thank You
    Ira Schwartz


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