Any idea what real estate pros pay for leads?

16 replies
Hey warriors - working on my first local lead gen site for a realtor and while I don't plan to just sell the leads directly, I'd like to know what real estate folks might pay for the leads that they purchase for comparative purposes.

Once I close enough to actually sell or rent the site I'm sure I'll be talking to a few pros, but I'd love even a ballpark idea now if someone has the answer.

Thanks!

Steve
#estate #idea #leads #pay #pros #real
  • Profile picture of the author Mike Grant
    Depends on the realtor and their typical clients. Obviously a huge difference in commission between a $200k house and a $600k house.
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    • Profile picture of the author David_Nilsson
      Hi Steve.

      First thing I would do is to find out how much commission would be made on an average sale in the area you hope to work in.

      Why, because this can vary greatly.

      From example I have been paid between $2,800 - $22,500 for a sale. I know people who are getting $30,000 per sale right now. (in Australia) and this are properties selling for under $500,000.

      This figure will greatly affect how someone is willing to pay for a lead.

      I also would speak to some agents and ask them directly what a lead is worth to them. These people get paid by commission, so there is no need to beat around the bush. Just ask them.

      Hope this gives you a direction to head in. Just send me a PM if I can be of help.

      Cheers
      Dave
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  • Profile picture of the author LiquidSeo
    Originally Posted by Steve Solem View Post

    Hey warriors - working on my first local lead gen site for a realtor and while I don't plan to just sell the leads directly, I'd like to know what real estate folks might pay for the leads that they purchase for comparative purposes.

    Once I close enough to actually sell or rent the site I'm sure I'll be talking to a few pros, but I'd love even a ballpark idea now if someone has the answer.

    Thanks!

    Steve
    Steve - are you in the US, or in Australia?

    I know locally here in Atlanta real estate leads - the internet kind, go for roughly $50 each. These are not high quality leads, but basically web form submits from lead sites.

    Check out http://www.activerain.com to get a better handle on this topic.

    Brian
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  • Profile picture of the author mrmatt
    Check out other real estate lead sites. You will see how much they are selling for. But I can tell you that the majority of the leads are of the quality that LiquidSEO pointed out. They are simply web submits which is what I am assuming you are going to be doing as well.

    Back in the day when I was in the mortgage business the lead costs would range from a few bucks for aged leads to as much as $85 for a unique lead that was only sold to one person.

    I was damn good at generating leads. Poor at the follow up. More excited that my marketing ideas worked than I was that I just generated 15 to 20 new leads (in a day and not using the internet)

    I hope this works out for you. Keep in mind that these agents and loan officers are constantly getting hounded by companies trying to sell them leads. Have a great hook and tell them why your leads are different.
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  • Profile picture of the author cma01
    Steve,

    I'm not sure where you are located, but in the U.S. most states have very strict licensing rules on agents giving compensation to anyone other than another licensed agent for leads. This even applies to gifts.

    I don't know what the monetary limit is now, but back when I sold real estate I think it was $25.

    Now if you are licensed, you can ask for a referral commission. The standard will vary depending on your location and market, but when I was in real estate the rate was 20% of the gross commission for the referred side of the transaction (either listing or selling.)
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    • Profile picture of the author Steve Solem
      Thanks all for your comments!

      Originally Posted by mgtarheels View Post

      Depends on the realtor and their typical clients. Obviously a huge difference in commission between a $200k house and a $600k house.
      Originally Posted by David_Nilsson View Post

      Hi Steve.

      First thing I would do is to find out how much commission would be made on an average sale in the area you hope to work in.

      Why, because this can vary greatly.

      From example I have been paid between $2,800 - $22,500 for a sale. I know people who are getting $30,000 per sale right now. (in Australia) and this are properties selling for under $500,000.

      This figure will greatly affect how someone is willing to pay for a lead.

      I also would speak to some agents and ask them directly what a lead is worth to them. These people get paid by commission, so there is no need to beat around the bush. Just ask them.

      Hope this gives you a direction to head in. Just send me a PM if I can be of help.

      Cheers
      Dave
      Very true guys, thanks! I should've been more clear that I was just wondering what someone might typically pay from one of the larger websites that sell leads to real estate agents. I haven't heard of any that charge and expect a commission on leads, but was thinking of someone like getmyhomesvalue .com which I spent 20 minutes on and couldn't figure out what they charge folks.

      Originally Posted by LiquidSeo View Post

      Steve - are you in the US, or in Australia?

      I know locally here in Atlanta real estate leads - the internet kind, go for roughly $50 each. These are not high quality leads, but basically web form submits from lead sites.

      Check out ActiveRain Real Estate Network to get a better handle on this topic.

      Brian
      Thanks Brian - I'm in PA here and that figure is kind of what I was expecting. Someone recently posted a nice list of what servicemaster charges contractors for leads and most of them averaged $30 - $60 or so, so I guess I'd expect Real estate folks to pay at least that if not much more.

      Originally Posted by mrmatt View Post

      Check out other real estate lead sites. You will see how much they are selling for. But I can tell you that the majority of the leads are of the quality that LiquidSEO pointed out. They are simply web submits which is what I am assuming you are going to be doing as well.

      Back in the day when I was in the mortgage business the lead costs would range from a few bucks for aged leads to as much as $85 for a unique lead that was only sold to one person.

      I was damn good at generating leads. Poor at the follow up. More excited that my marketing ideas worked than I was that I just generated 15 to 20 new leads (in a day and not using the internet)

      I hope this works out for you. Keep in mind that these agents and loan officers are constantly getting hounded by companies trying to sell them leads. Have a great hook and tell them why your leads are different.
      Thanks Matt - that's more or less what I'm doing, but once I hopefully dominate my keyword and get some traffic I plan to either rent or sell the site to one of the real estate pros in this area.

      Originally Posted by cma01 View Post

      Steve,

      I'm not sure where you are located, but in the U.S. most states have very strict licensing rules on agents giving compensation to anyone other than another licensed agent for leads. This even applies to gifts.

      I don't know what the monetary limit is now, but back when I sold real estate I think it was $25.

      Now if you are licensed, you can ask for a referral commission. The standard will vary depending on your location and market, but when I was in real estate the rate was 20% of the gross commission for the referred side of the transaction (either listing or selling.)
      Thanks cma01 - I learn something new everyday and I had no idea states could limit what an agent could pay for a referral!

      Thanks again for your comments all! I can see I'll need to talk to some agents before figuring out a sales price, but either way I'm expecting this to be a profitable venture.

      Cheers,

      Steve
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  • Profile picture of the author cma01
    haven't heard of any that charge and expect a commission on leads, but was thinking of someone like getmyhomesvalue .com which I spent 20 minutes on and couldn't figure out what they charge folks
    When I was in real estate, yes those type of web sites did charge a percentage, but they were licensed as an agency. But then that was almost 10 years ago and there weren't as many options then either.

    However, I know that one of my friends who is a Realtor bought leads from a site that was the real estate equivalent of Servicemaster. I can't remember what she said she paid for them, but she didn't do it very long because it they were such low quality.

    Thanks cma01 - I learn something new everyday and I had no idea states could limit what an agent could pay for a referral!
    The state I was licensed in regulated what anyone with a license could pay to someone without a license. If it is between licensees, it is completely up to them to negotiate.

    Carla

    ETA: I just remembered that my friend recently sent out an email that her company was offering $500 for a lease referral, paid at the signing of the lease. Obviously, the laws differ from state to state. In this case, I'm pretty sure her broker is participating in it as well.
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  • Profile picture of the author LoanShark
    At one time I worked for a Internet Lead company. We charged on a tiered scale based on the price of home the customer was looking for. Depending on the quality, the $30 to $75 range is realistic.

    Another thing to consider, will these leads be exclusive? Most lead providers will make each lead available to up to 4 people. If a customer knows that they are the only one getting the lead, the $75 per would be something they shouldn't blink an eye at.

    Lastly, once you get a understanding of the amount of leads you are receiving, it may be best to have them pre pay for leads or maybe you can say a retainer. With this option you may want to give them a way to filter out the lead. Maybe loan type or down payment amount.

    Just my two cents.... If you need any other ideas email me....
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    • Profile picture of the author attorneydavid
      I'm a realtor in addition to a lawyer. The average internet close rate nationwide is 2% so 1-50 leads will close into a sale. Take the average sales price in your area (actually this will be a little low alot of lower priced stuff is unrepresented).

      So at $200,000 a sale is worth 6000 . A 3-1 ROI is considered good is so if your per sale cost was $2000 and 50 sales a good price would be $40. If your leads are Washington DC the average price might be 600,000 so your price might need to triple. (but the closing rate might go down so) .

      So
      (Average Home Sale Area * 3%)/150= Lead Price

      Hope that helps
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  • Profile picture of the author Steve Solem
    Thanks guys, I appreciate the additional comments here.

    My plan is not to sell individual leads themselves, but once I get the site ranked either rent it to one agent or sell it outright. So, the leads would be exclusive, and with over 8k monthly searches for the keywords I'm targeting I'm expecting that could generate a good number of leads for someone. If $50 a lead is the average going rate (and I'll certainly find that out before pricing the site) I'd only need 8 leads to justify charging $400 a month - but of course I'll need to look at the numbers before deciding on a price.

    Thanks again for everyones input!
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    • Profile picture of the author Marvin Johnston
      Originally Posted by Steve Solem View Post

      My plan is not to sell individual leads themselves, but once I get the site ranked either rent it to one agent or sell it outright.
      Do you have a real estate license?

      There was a *great* discussion over on StomperNet started by someone who developed a leadgen site. One thing brought up there was if you are selling the leads or taking a commision. Depending on your state laws (assuming you are in the US), you might find how you can charge limited depending on if you have your license or not.

      Marvin
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      • Profile picture of the author Steve Solem
        Originally Posted by Marvin Johnston View Post

        Do you have a real estate license?

        There was a *great* discussion over on StomperNet started by someone who developed a leadgen site. One thing brought up there was if you are selling the leads or taking a commision. Depending on your state laws (assuming you are in the US), you might find how you can charge limited depending on if you have your license or not.

        Marvin
        Interesting Marvin - thanks for mentioning that.

        No, no license here, but I can't imagine how that would come into play considering I'm not involved in any real estate transactions and not looking for a percentage...just selling advertising to the people selling the homes.

        But I'll find all that out and figure out the best way to approach this as I get closer to page 1. Right now I'm into this about 4 days and just popped up on page 5 of Google so I'm hoping page one isn't too far off.

        Cheers
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        • Profile picture of the author myob
          Sounds like $50 might be right within the ballpark. Trying to get much more at first may trigger some pullback. One of my clients has a lead generator site for moving companies, and he charges $30 per qualified lead, but sells them to about 5 different companies.
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          • Profile picture of the author attorneydavid
            Small issue, most real estate leads are captured by offering IDX (basically the mls feed) listing data which you need to be a realtor to subscribe too. You could work around but the idx lead capture is impressive and could be a selling point.
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            • Profile picture of the author humbledmarket
              Banned
              Originally Posted by attorneydavid View Post

              Small issue, most real estate leads are captured by offering IDX (basically the mls feed) listing data which you need to be a realtor to subscribe too. You could work around but the idx lead capture is impressive and could be a selling point.
              As many have already said it really depends on the quality of the leads as well as the general sales and who you're really selling to.

              I also agree with this poster. That would definitely increase the value of your leads knowing they have interest in purchase perhaps you can integrate a mixture of both such as a general lead capture, a free gift capture as well as IDX listing data with lead capture.
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  • Profile picture of the author mrmatt
    I am going to totally disagree with attorneydavid and humblemarket.

    Pretty much every realtor website has IDX. So I highly doubt that anyone is going to fork over a name, email and phone number to get access to these listings. It is irrelevant.

    There are multiple ways for you to set up these sites.

    It could be the "get agents to fight over you and reduce their fees get 4 agents to give you a quote" type site.

    Or it could be a site offering free reports about a topic they would be interested in. And there are lots and lots of topics that you could write about that are geared to both buyers and sellers.

    Check out several real estate websites and you will eventually see a variety of reports being offered. But they are usually pretty boring and are not going to get people to fork over their info.

    Things like "10 Things You Need To Know Before Selling Your Home" Yaaaawwwwn!

    Thanks
    Matt
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