Selling Leads to Brokers?

[billright]

I'm a webmaster planning to get licensed as an agent soon. I'm creating a lead generating website. I'm interested to know what price per lead or percentage per closing is regularly payed out to decent leads?

I have talked to one broker so far and he quoted me 10% per lead that closes. He said that any more than that and he would be better off hiring someone to do lead generation for him. I told him I heard of people getting 20% - 50% per closing lead and he said 20% and half of your cut for being an agent is pretty standard payout. So thats 20% - 50%(agent pay percentage) which is = 10% per lead closing.

I don't think this sounds too favorable to my interest. I was wondering what others thought?

Saint Louis,

Thanks,
Bill

[kyle422]

10%-30% depends on who you talk to. Anymore than 30% would be pushing it.

[webmaster]

As a web developer, I dont think you have a good way of actually holding the agents accountable when they sell a property. Also, If I am not mistaken, it is not legal for agents to pay referral fee's to non licenced persons based on a % of closing. So you would likely be better off selling the leads at a "per lead" price. The higher quality your leads, the more agents will pay

[billright]

That sounds right. Thanks for the info..

So what do you think would be a fair "per lead" price to charge? I suppose I would just sell to the highest bidder.

[AaronSOLD]

The problem with lead generation companies like realestate.com is that the quality of the lead is aweful. If you can improve the quality of the lead, then you can ask for more money.

[bobbyj]

Some sites like realestate.com charge a flat per month fee of 200.00 for 10 leads buyer or seller with a one year contract. Others like homegain.com charge a minimal monthly fee per month of 40.00 with unlimited buyer or seller leads and a 30% referral fee for any closed deal. Still other sites like realtytracker.com charge a per lead fee of 29.95 for a buyer lead and 49.95 for a seller lead (they assume the seller lead is more valuable because you will work with the seller as a buyer as well, and you will probably pick up a buyer client from the listing).You can also purchase these leads in bulk at a discounted price. You won't have time to sell your leads to the higest bidder. Internet customers are definitely products of the "I want it now" generation. If they don't get serviced fast they go sour fast!

[Homesurfer]

I think fees based on a percentage should be outlawed, myself. Even Realtor-to-Realtor leads. If not, there should be a definite differentiation between leads and legitimate referrals where the referring agent has a history with the client. A lender for many years, I purposely allowed my real estate license to expire so that I wouldn't be tempted to get in that "referral fee" business, and so that (as a real estate site owner) I would have no conflict-of-interest issues with my customers (real estate agents).

But I'm a contrarian.

[Jester954]

Once licensed you could work with a specific broker and gernerate leads solely for them and work out a decent percentage deal. I'm sure if you brought in a good amount of quality leads that percentage would become more negotiable in your favor.

[Eric Blackwell]

Time for me to agree with the contrarian again! (up to a point).

I totally agree that having a license leaves one open to the temptation of selling leads and I can understand how that looks, acts, and feels like a conflict of interest.

HOWEVER

I don't think that referrals should be outlawed. They serve to HELP clients moving from one area of the country to the other and take the TRUST they have in one AGENT and transfer that trust to another agent.

(Not unlike Google taking one sites trust and transfering it to another via a hyperlink, No?)

I have NO problem considering lead gen for a percentage legitimate and every bit as wholesome as any other form of transaction PROVIDED the following:

1) You are a licensed agents (to not be such would be illegal)

and (here's the kicker)

2) You offer local geographic exclusivity for getting the referral fee.

In other words, you are working as a technology PARTNER with the real estate agent in a given market. This offers NO conflict of interest and a CLEAN and CLEAR choice for the agent...Parter with me or Don't. This offers NO conflict of interest for the clients--They realize that this site is being originated on behalf of ONE real estate agent promoting their business...

This also prevents the "Get 4 Mortgage Quotes Now" syndrome where there really isn't all that much competition and the banks are the only ones who truly win...

As I said above you are simply the agent's technology partner and it is a different way to get paid (as opposed to "I'll build you a site for X") No need for me to compete with myself if I and a technologist / web designer / SEO and no need to force them (agents) to compete against themselves either...

What think ye, my contrarian counterpart?

BTW- I always enjoy your posts...They make me think...

Eric

[Eric Blackwell]

Additional thought...

If a person PAYS up front for web dev / SEO work and understands that it is NON-exclusive, then they are agreeing to a reduced rate for the lack of exclusivity. I think that is totally cool and OK. There is no way to do that when dealing with leads and are paid for on a referral fee basis...

Cheers

Eric