The Pros and Cons of Buying Real Estate Leads: Is it Worth the Investment?
As a real estate agent, one of the biggest challenges is finding potential clients who are interested in buying or selling properties. This is where buying real estate leads comes in handy.
These leads can provide access to a pool of potential clients who have expressed interest in buying or selling properties. However, like any investment, there are pros and cons to buying real estate leads. On the one hand, it can save you time and effort in finding potential clients. On the other hand, it can be expensive and may not always guarantee quality leads.
In this article, we'll explore the pros and cons of buying real estate leads and help you answer the question is it worth buying real estate leads?
The Pros of Buying Real Estate Leads
1. Time and Effort Saving: One of the biggest advantages of buying real estate leads is that it saves time and effort. The leads provided by the lead provider are already pre-screened and qualified, meaning that you don't have to spend hours trying to find potential clients. This allows you to focus on other aspects of your business, such as closing deals, building relationships, and marketing.
2. Access to a Wider Pool of Potential Clients: Buying real estate leads gives you access to a wider pool of potential clients who are actively looking to buy or sell properties. This means that you have a higher chance of finding clients who are interested in your services, compared to relying solely on referrals or marketing.
3. Increased Sales and Revenue: Buying real estate leads can result in increased sales and revenue. By having access to a larger pool of potential clients, you can increase your chances of closing deals and generating more revenue for your business. This can also help you achieve your sales goals and improve your bottom line.
The Cons of Buying Real Estate Leads
1. Expensive: The cost is one of the biggest drawbacks of buying real estate leads. Lead providers charge a fee for their services, which can be expensive, especially for small businesses with limited budgets. Additionally, the cost of buying real estate leads can add up quickly, making it difficult to measure the return on investment.
Some places will try to get you into focus on the cost per lead or return on ad spend (ROAS). The problem with that is you're not taking into account the cost of the service.
For example, if you're getting a cost per lead for $10 and you generate 100 leads, that's a total of $1,000, right?
Wrong, you have to factor in the cost of the service, which could be $500, $1000, $2000 or more.
Now what is the true cost per lead?
2. Low-Quality Leads: Not all real estate leads are created equal. Some lead providers may offer low-quality leads that are not interested in your services or are not qualified to buy or sell properties. This can result in wasted time and effort, as well as frustration for your business.
Low-quality leads can be a major waste of time and resources for real estate agents. Not only do they not lead to new business, but they also take away from the time needed to focus on quality leads that may result in sales and revenue.
3. Lack of Control: When you buy real estate leads, you are essentially relying on a third-party provider to provide you with potential clients. This means that you have little control over the quality of leads you receive, the frequency of leads, or the characteristics of the leads themselves. This lack of control can be frustrating and may not align with your specific business needs or goals.
The Cost of Buying Real Estate Leads
The cost of buying real estate leads varies depending on the lead provider and the quality of leads. Lead providers typically charge per lead, with prices ranging from a few dollars to hundreds of dollars per lead. Some providers may also charge a monthly fee for access to their database of leads. It's important to consider the cost of buying real estate leads in relation to your business budget and goals.
The Qualified vs Quantity vs Quality of Real Estate Leads
Quantity of Leads
When you're focus is on generating a quantity of leads:
Get as many as you can
More than you can handle
Makes it a volume game
Takes time and patience to sort through
Conversion is time sensitive
Qualified Leads
When your focus is on generating qualified leads:
Leads that are ready
Might be too far down the Client Journey for you to provide Value
Conversion is about not using someone else
Timing
Qualified leads are better in some cases than others, for example for more real estate agents qualified leads are not that hopeful. If a buyer is already pre-approved, has a signed buyer agreement with an agent, but shows up at your open house, sure they are qualified, but they're not going to be working with you. And they probably won't be in the market again for another 7-20 years.
However, a real estate investor might work with multiple agents. Generating good qualified leads depends on what market you're serving.
Quality leads
The quality of real estate leads is crucial to the success of your business. Low-quality leads can result in wasted time and effort, while high-quality leads can lead to increased sales and revenue.
Get the right leads
They match your marketing and offer
Makes it a value game
It's important to evaluate the quality of leads provided by a lead provider before making a purchase. Look for providers who offer pre-screened and qualified leads, and who have a proven track record of success.
How to Evaluate Real Estate Lead Providers
When evaluating real estate lead providers, there are several factors to consider. These include:
1. Quality of Leads: Look for providers who offer high-quality leads that are pre-screened and qualified.
2. Pricing: Compare prices between providers to ensure that you are getting a good value for your money.
3. Reputation: Look for providers who have a good reputation in the industry and who have a proven track record of success.
4. Customer Support: Look for providers who offer excellent customer support and who are responsive to your needs and concerns.
If you’re looking to add leverage to your business by buying real estate leads check out my Leverage Guide.
How to Generate Your Own Real Estate Leads
Generating your own real estate leads is an effective way to save money and have more control over the quality of leads you receive. Some effective ways to generate your own leads include:
1. Referrals: Ask your current clients for referrals to friends and family who may be interested in buying or selling properties.
2. Networking: Attend industry events and network with other professionals in the real estate industry.
3. Content Marketing: Create valuable content, such as blog posts and social media posts, that attract potential clients to your business.
4. SEO: Optimize your website for search engines to attract potential clients who are actively looking for real estate services.
If you're serious about how to generate real estate leads yourself, here's an article with 34 lead generation ideas.
The Importance of Nurturing Real Estate Leads
Nurturing real estate leads is crucial to converting them into clients.
The reason it's so hard to convert real estate leads is because you're doing it wrong. Most of the real estate lead conversion tactics taught to us are focused on Speed to Lead.
“Just respond faster,” the thought leaders tell us.
If a lead was actually a request for contact, that would be good advice.
The reality is, the majority of leads are not requests for contact. They are requests for content. Or what we call Sign Ups.
For example, many real estate leads are signing up:
to search for homes,
check their home value,
download a report or
watch a video
Sign Ups aren't requesting you contact them, so the quicker you do doesn’t really matter. If anything, it might annoy them more.
Three Steps To Better Lead Conversion
1. GET THEM TO TAKE THE FIRST STEP:
Remember, we’re not trying to get the real estate lead into a listing contract and closing right now. You’re simply trying to get them to take the first step, then the next step.
That could mean responding to an
email
or message.
clicking a link.
watching a video.
Don’t be like Evel Knievel here and think you have to get your Sign Up to jump over the Grand Canyon.
You just want to help them take the next, easy step.
2. GO DEEPER OR SHIFT
If you have the email, move the real estate lead to text.
On text, move to phone call.
Had a phone call? Move to in-person.
It doesn’t always need to be done this way. Many leads will jump from Sign Up to in-person, with a text or message. A phone call isn’t even needed. But the key here is to keep them moving.
Connecting on different platforms is better than having the same conversation on one.
It adds dimension and connectivity versus a singular interaction.
3. DON’T CONTACT THEN RETRACT
One and Done doesn’t cut it.
Look for openings, and reasons to circle back.
If you’re not progressing the conversation forward, at least keep it moving.
Bonus Lead Nurture Tip: Track
Track the progress of your leads over time and adjust your strategy. By tracking the data, you can quickly adjust your real estate lead conversion strategy and start to see more leads become clients.
Keep reading how to convert real estate leads. It goes deeper into the lead nurturing tips above.
Conclusion: Is Buying Real Estate Leads Worth the Investment?
Buying real estate leads can be a valuable investment for your business, but it's important to weigh the pros and cons before making the investment. While buying real estate leads can save time and effort and provide access to a wider pool of potential clients, it can also be expensive and may not guarantee high-quality leads. Ultimately, it will depend on your individual business needs and goals.
If you're looking for ways to generate real estate leads yourself, then developing a comprehensive lead generation strategy is essential. This should include online marketing strategies such as content marketing and SEO, as well as traditional methods like networking. It's also important to focus on nurturing real estate leads through multiple communication channels in order to convert them into clients. By tracking the progress of your leads over time and adjusting your strategy accordingly, you can start to identify the best methods, the best use of your time, and the best use of your money.
Here’s 4 things you can do right now:
1. LEADS (GET TO 6 FIGURES): PROGRAMS & COURSES
2. LEVEL UP (GET 6 FIGURES+ ): COACHING
3. LEVEL UP ACCELERATOR: ONE DAY DEEP DIVE
4. LEVERAGE (TIME BACK FOR 6+, 7 FIGURES): LET DARIN DO IT
FAQ about buying real estate leads:
If you have other questions about real estate lead generation, DM on my Instagram.
Q. How much do Facebook Real Estate Ads cost?
A. Facebook Real Estate Ads can cost anywhere from a few dollars to several hundred, depending on your budget and the reach you want for your ad. Generally, the more competitive an area is and the larger the target audience is, the more expensive it will be to run the ad. The cost of Facebook Ads can also vary based on how much time and effort you put into creating relevant content and optimizing targeting parameters. On average, real estate agents spend between $100-$500 per month on Facebook Ads. Investment in paid ads should be balanced with other lead generation strategies such as organic content marketing and SEO in order to maximize ROI.
What we do in our business and what I coach is what is called the using the Coffee a Day Budget.
Would you spend money on a coffee every day if you were meeting a client, past client or new prospect?
$5 a day on ad spend.
That's it.
$5.
With the typical cost of ads being $10 per 1000-person reach, you'll be in front of 500 people a day on just $5.
Q. What other lead generation strategies work best for real estate agents?
A. In addition to online marketing and paid ads, there are many other strategies that real estate agents can use to generate leads. I look at lead generation or acquiring lead in four categories, called PAPER.
Pursue
Attract
Paid
Earn & Return
Q. What are the benefits of using organic content marketing for real estate lead generation?
A. Organic content marketing, or what I call Attract, is an effective way for real estate agents to generate leads without having to invest in paid advertising. Through organic content such as blog posts, articles, videos, and social media posts, real estate agents can create high-quality content that is relevant to their target audience and establish themselves as thought leaders in their field. This type of content is not only cost-effective but also helps to build trust with potential clients and establish long-term relationships with them. Additionally, organic content enables agents to capture leads through email opt-ins or contact forms and generate referral traffic from search engine rankings.
You can see how to use this type of marketing by using the Triple-A Approach.
Q. What are some tips for creating effective real estate ads?
A. Read this article, Nail these 3 things for Successful Paid Ads