The Pros and Cons of Buying Leads in Real Estate
If you’re an established real estate agent, you likely already have some dependable methods for lead generation. Maybe you have some strategies that you feel work well, but you’d like to diversify your lead generation. If you’re a new agent, you might not have any tried and true approaches in place yet.
All of these scenarios inevitably lead to the question of whether or not you should buy leads from a lead generation service.
The alternative to buying leads is creating your own funnel through marketing. There are advantages of this, including the fact that you can develop your brand. However, it takes time to build momentum, and strategies like SEO and social media management aren’t necessarily going to help if you need leads fast.
When you opt for paid leads, you skip some traditional steps, and you’re connected right away with an interested buyer or seller, or at least that’s the theory.
Below are the upsides as well as downsides of buying leads.
The Pros of Buying Leads
The upsides of paying for leads include:
You Get a Steady Stream of Leads
When you buy leads in real estate, you’re gaining access to a constant and consistent flow of leads and possible clients. Finding new clients is one of the hardest parts of real estate.
When you buy leads, you can skip things like cold calls, and you can work on other parts of marketing and branding, but you also give yourself the luxury of time in doing so.
Lead generation services put you in contact with people who are already interested in buying or selling, upping your chances of conversion.
You’re also getting access to a wider pool of potential clients.
When you rely on only traditional methods like referrals, you’re not likely to get as much variety in your potential clients.
Increased Visibility
Most modern consumers start their real estate process online. They search houses online, and many often already have an idea of the houses they’re interested in when they begin working with an agent. Buyers and sellers also go online to find agents.
You’re increasing your exposure when you pay for leads, and you’re going straight to where your targeted audience already is.
Faster Growth
When you try to generate one lead at a time, it isn’t easy to scale your marketing and your business.
You can only do so much when you’re relying on traditional lead generation methods.
You’re going to be able to scale and grow much faster when you work with a company that connects you with paid leads. You can also follow up on more than one lead at a time, allowing you to automate some of the elements of nurturing potential clients.
You can develop a repeatable set of processes and an efficient pipeline.
Paid Leads Help You Get Your Foot in the Door
If you’re a new agent, you don’t have the name and brand recognition of experienced agents. If you don’t have much of a history of working with clients, your referral business will likely be nonexistent. When you buy leads, you can start to get your foot in the door with clients, which will help you build a more robust business.
What Are the Downsides of Buying Leads?
As with anything, there are cons to weigh when you’re thinking about buying leads.
Cost
The cost of buying leads is the number one negative factor you have to think about. You have to consider the price in your budget, and if you’re starting as a new agent, it’s a potential financial risk.
You may pay monthly and an upfront cost. You’re also paying with no guarantee that you will get a client or close a sale.
You have to do the math to calculate your potential ROI.
Not All the Leads Are Qualified
You need to ensure you’re using one of the highly-rated lead generators, and even then, there’s always a chance a lead is a dud and goes nowhere.
Finally, you also have to remember that many other real estate agents in your area are also buying leads. That means you’re competing for the same leads, and many are going to be first-come, first-serve. If you don’t act fast enough or you’re not systematic in your approach, you might be losing out.