Pay at Closing for these Real Estate Leads in 2023

Tired of paying a hefty upfront cost for leads that are junk, aren’t even looking to buy or sell a home, or won’t close for months or even years?

Sick of paying a monthly fee only to have other agents get the same leads?

Looking for a way to grow your business without sinking more money into it first?

Fortunately, there are programs and strategies for getting leads without paying upfront! You only pay at closing in the form of a referral fee!

You get a lead. You close it. And the referrer gets a chunk of your commission.

Below are some of the pros and cons that are generally (but not always) true of referral lead sources.

Types of Pay-at-Closing Leads with Examples

Lender Referrals

You no doubt know your local agents who work with lender referral programs. This is the most common form of referral leads.

Take Rocket Mortgage for an example.

They are trying to be the “Zillow of mortgage” (although Zillow would say that Zillow is the “Zillow of mortgage”). It is part of the “Rocket” family of products which includes Quicken Loans and One Reverse Mortgage.

Quicken Loans and Rocket Mortgage are some of the top-visited lending sites in the US and have mastered PPC spending and advertising.

Agents and brokers can join their Partner Agent Network which gets leads from across their brands. Some of their minimum requirements include:

• Must have a minimum of 24 months of experience working as a full-time agent.
• Must be a full-time agent with a minimum of eight closed transactions in the last 12 months.

Rocket Mortgage made a splash in 2018 when they started Rocket Homes, a search portal just like Zillow, Realtor.com, or Trulia. They are determined to get more buyers and sellers into the funnel so they can sell them mortgages and sell leads to agents.

Military Affiliated Banks

The military-affiliated banking services and credit unions like Navy Federal Credit Union (NFCU) and Veterans United all have robust agent referral networks. (USAA used to have Movers Advantage, a popular program, but ended the program in 2019).

The NFCU program is called Realty Plus.

These companies partner almost exclusively with brokers and are not available to single agents or teams. If these programs interest you, your best bet is to find a broker who already works these leads.

These also tend to have some of the steepest referral fees, from what I understand speaking with agent members in my market. Military customers can be fiercely loyal to their military-friendly banks (I have USAA – great website UI and good experiences all around).

There are also military referral networks like MILLIE’s Agent Hero program that might be worth exploring as well.

Others

• Golden1 Credit Union
• HomeStory
• LemonBrew

Agent Referrals

Not a service, but agent referrals is a great way to get free leads that you pay for at closing.

This is a scrappy way to build a business.

Partner with a top agent, or any agent who’s been in the business more than a year, to go through their old, neglected leads. You can then give them a referral on anything that converts when you close a deal.

The leads are cold, but I guarantee persistence and hustling can turn them into something.

If you think working another agent’s cold leads sounds like a waste of time, think again. That is how Opcity got its start, buying old Realtor.com leads, working them, and then selling them to agents at a profit.

Other companies like SetSchedule buy leads from Zillow and others similarly, allowing agents to work these seemingly dead leads and bring them back to life.

Referral Networks

If you can’t connect with another agent in your market or brokerage to work their cold leads, there are referral networks that allow you to both give and take leads.

Even better, there are lots of ways to execute this strategy, both for top-performing agents and for the part-timer who just got their license.

Obviously, the intra-brokerage referral networks at Keller Williams, RE/MAX, and the Realogy franchises are robust and a point in favor of joining or franchising with the big box brokerages.

Among other strategies, at the high end is something like Leading Real Estate Agents of the World, an invitation-only referral network for the top brokers and teams. Members often proudly display their membership on their website.

There are also other networks like Facebook groups like Lab Coat Agent’s referral group or local BNI groups.

Others

• ReferralCloud
• Referral Exchange

Review Sites

Unable to compete directly with listing portals like Zillow or Realtor.com, there is an entire category of business that instead specializes in searching for agents instead of houses.

Clever is an example.

They are a flat fee listing brokerage that conducts its own lead generation. For leads they can’t service, they have an agent partner program for a referral fee.

They assign leads out based on your review quality.

Because these are advertising to buyers and sellers that they are quality agents, they tend to have standards they seek in an agent partner. Some, like Effective Agents, claim to only work with the top 3% of agents, or have ranking algorithms analyzing your active inventory volume and performance when building recommendations.

Others

• AgentHarvest
• Agent Fixup
• Agent Pronto
• Effective Agents
• Homebird
• Mellohome
• SoldNest
• UpNest (Realtor.com)

Relocation

Diving into a niche like relocation can be a way to work leads based on referrals.

Cartus, a Realogy subsidiary, is an industry leader in relocation.

Cartus leads, however, go to Realogy’s own network of brokerages. So if you aren’t with one of those brands, tough cookies.

Many of these companies have certification courses required to be eligible for the program.

Others

• Aires
• Atlas
• BGRS
• Graebel
• Sirva
• Xonex

Portals

Opcity was the quintessential “pay at closing” lead service. The fast-growing Austin company was acquired by Realtor.com.

Opcity does its own lead generation, as well as purchases leads from other sources, and then sell those leads to brokerages in exchange for a referral fee. Only pay if you close!

The catch with Opcity is that they are only available to brokerage-level participants – not individual agents. And they are selective about those participants as well.

Realtor.com still has its traditional leads you can purchase.

Depending on how the rollout with Realtor.com goes, these kinds of leads may open to more types and levels of agents. But more than likely Realtor.com will still be highly selective about the agents they send these leads to.

Zillow Flex

Realtor.com isn’t the only portal eyeballing new ways of selling its leads.

Zillow waded into the pool with the Flex program.

Just like Realtor.com and Opcity, this program sends out leads to select agents for a referral fee (Zillow is technically a broker in every state).

And like Realtor.com, Zillow is not bashful about making it clear that they will be selective about the agents they work with for this program. They are prioritizing current Zillow Premier Agents first, focusing on high-performing brokerages and teams.

Others

• Homelight
• Estately (Anywhere)
• Movoto (OJO)
• Redfin

Commission Advance

This isn’t exactly paying at closing, but if you are needing money sooner than closing in order to pay bills or keep your marketing going strong, there are commission advance companies that are options.

It goes without saying that you should be careful taking out loans on commissions for transactions that haven’t closed yet. Most of these advances loan up to 80% of so of your expected commission and require a signed contract in place before extending the loan.

Typical fees are as much as 10% of the advance, so it is not likely a tool you want to use frequently if you can avoid it.

eCommission is a popular option that has partnered with many major brokerages.

Some brokerages offer commission advances internally or partner with Commission Advance companies.

Others

• Commission Express
• Concord Commission Advance
• Express Cash Flow
• Instant Commissions
• RealCommissions
• RLTY Capital

Pros and Cons of Paying at Closing

Pros

• No Out of Pocket Costs. The obvious benefit of paying for leads at closing is…paying for leads at closing. No out of pocket costs until you’re actually collecting a check. Talk about leading with revenue!
• Aligned Incentives. Not only do you only pay when it closes, but it aligns your incentives with the lead generator. They only get paid if the leads they give you close and actually make you money! They’re incentivized to only give you highly motivated, high-quality leads. You are both on the same page of turning a lead into a transaction.
• Focus on the Customer. If real estate lead generation annoys you and you just want to help home buyers and sellers, outsourcing your lead generation in exchange for referral fees can be a win-win for your lifestyle. Don’t worry about digital marketing, Facebook ads, PPC, complicated funnels, or the race to qualify leads. Just be a great Realtor!
• Exclusive Leads. There’s only one closing. One commission. It doesn’t get much more exclusive than that. These also often are warm handoffs. No race for the fastest phone call to win the lead.

Cons

• Small Fish Need Not Apply. Aligning incentives works both ways. Now the lead generation company is very keen that you get their leads to closing, or they don’t get paid! They have zero tolerance for failing to call or nurture the leads they’re giving you. The result is that they only want to work with good agents. The best agents. Most of these programs are selective about which agents and brokerages they work with and newbies are often out of luck (though there are a few exceptions).
• Smaller Chunk of the Pie. The convenience of deferring payment also comes at a cost. Referral fees tend to be a chunky portion of the commission. 25-50% is not uncommon. If you have great lead generation in place and have mastered follow-up, you’ll probably achieve a higher ROI paying for leads upfront and keep the entire commission to yourself.
• Strings Attached. Getting back to lead generators being particular about the leads they’re giving you, they also tend to come with strings attached. There may be rules about who “owns” the potential buyer or seller for future marketing purposes. Or you may need to use particular transaction software and keep up with reporting requirements.

Typical Referral Fees

Some companies require upfront fees to join the program.

As mentioned, referral fees are likely between 25-50% of a transaction. Relocation and lender referrals are steeper while agent-to-agent referrals are likely at the lower end.

I wrote an article here about negotiating referral fees and rules with other agents.

Conclusion

The alternative to paying for leads at closing is not paying at all!

If you’re a new agent looking for leads, I recommend hustling to get started. Work with an agent in your office. Join a team.

It’s good that you’re trying to avoid spending too much upfront.

But referrals are not just noobs short on cash. Top real estate professionals frequently work referral leads, and have business practices in place. In fact, the big companies like Zillow and Realtor.com are betting that referral-based business is the future of the industry, instead of paying for leads upfront. Whether they are right remains to be seen.

Hopefully, you’ve received a few good ideas on how to find potential clients without paying upfront!

Updated April 11, 2023; Originally published August 20, 2019.