Real estate leads refer to contacts who can become a buyer, seller, or referral source. Real estate agents will often refer to a prospective client as a lead.
Lead generation is the process of finding more leads. Agents who focused on lead generation spend time assessing different sources of leads. These often include various marketing channels and free customer acquisition methods.
Agents who are building their business are constantly searching for sources of leads. These sources can be offline and online, paid and free. The average agent spend over 5% of their earnings on marketing, and much of this focuses on finding new leads.
Lead quality refers to how likely a lead is to turn into a closed transaction. A buyer who has just started their search is lower quality than one who is prequalified for a mortgage. Agents will pay more for a higher-quality lead.
Lead scoring is a method of assigning a number to each lead to represent the quality of that lead. Usually, a lead that has submitted more information or moved further in a process has a higher score. Lead scoring can help agents decide where to focus their time and effort.
Purchased home sales lead prices can vary by market but are often $20-$100 each. Typically, 1-5% of leads convert into a sale. This means at $20-100 per lead, a closed transaction can cost an agent anywhere from $400-$10,000 in lead fees. In some major markets like Manhattan, agents can spend over $500 per lead.
Purchased rental lead prices vary significantly by market but are often $5-$25 each. Similar to home sales, 1-5% of rental leads convert into a closed transaction. This means at $5-25 per lead, a closed rental can cost an agent anywhere from $100-$2,500.
Agents use a combination of marketing platforms and customer relationship management software to manage leads. These tools allow agents to both capture new leads and engage with these leads.
Predictive lead scoring or lead generation attempts to score leads using data. This approach differs from relying solely on manual assessments or how far in a process a lead is. Predictive lead scoring often uses geography, recent purchases, browsing activity, and life events to score a lead. Predictive lead scoring allows an agent to be more proactive with leads that otherwise might look unattractive.
Agents primarily pay for leads online through real estate portals and large online advertising platforms like Google and Facebook. There are also lead aggregators that handle marketing for agents across multiple platforms and sell those leads to agents.