Ranking the 6 Types of Real Estate Leads for Realtors
There are different industries. Real estate. Aviation. Petrochemicals. Toys. Fast Food.
But there is only one business.
Lead generation.
In fact, it’s better to be a bad agent with leads than a good agent with none (you can refer your leads to good agents for a referral fee!)
Without leads and consumers, you have no business. It is a problem every business must solve, and the central dilemma of any business.
You need to identify where you are going to get your real estate leads before you even start your Realtor business. And where you get them depends on the types of leads you want to target.
The 6 types of real estate leads, in descending order of quality, are:
- Referrals
- Organic
- Portals
- PPC
- Social Media
- Lists
Quality versus Quantity
Quantity and quality is neither good nor bad. It just depends on what lead generation opportunities you have and your conversion in each category.
For example, for one day of lead generating or dollar spent, you might get 1 referral lead, 10 Zillow leads, or 100 list leads. And at a 1:1 conversion for referrals, 1:10 conversion for Zillow leads, and 1:100 conversion for list leads, all of those would convert to about the same number of closings.
The above chart reflects the quality and quantity of leads per unit of effort.
That doesn’t mean one system is better than the other. It just means that you have to make up for quality with quantity.
And it doesn’t mean you can’t generate a large quantity of quality leads. Top agents have their referral game on point for that reason!
The 6 Types of Real Estate Leads for Realtors
Referral Leads
Examples
- Referral Exchange
- Opcity
- Top Agent Network
- your past clients and SOI
Where You Find Them
There are two ways to get referrals:
- work your sphere of influence
- have a great transaction to earn referrals
Nobody is going to refer an agent with whom they had a “meh” experience. Go above and beyond, with client appreciation gifts, great communication, and plenty of follow-up even after your commission check is cashed. Stay top-of-mind for your customers, both past and present!
Agent and business referrals can also be a great source. You can also join referral networks like Referral Exchange, Top Agent Network (invite only), or join a brokerage with a lender referral program.
Why They Contact You
Consumers trust the advice of their friends and family over Google reviews, Better Business ratings, internet searches, or anything else.
Many home buyers and sellers ask their friends and neighbors for recommendations.
There is no more powerful endorsement than the social proof of a client referring you to a friend.
Who Should Target Referral Leads
Everybody.
These are the highest quality leads, and a sign of a mature, quality real estate business. Many top agents work exclusively from referral leads. They’re often very low cost compared to the other marketing methods.
It doesn’t matter what other lead strategies you have; working referrals must be in your wheelhouse.
Referral Tools
Organic Leads
Examples
- SEO with your website
- Social media audience (e.g. YouTube videos, Facebook page, LinkedIn Groups, etc)
- Email marketing leads
Where You Find Them
You don’t find them.
They find you.
Organic leads come to you. Also called content or attraction marketing.
It is usually associated with SEO (search engine optimization) and ranking on Google. But your audience is a form of organic lead, too. Your Twitter followers, Facebook likes, Instagram friends…anyone who sees your content without your having to pay is an organic lead.
That said, mixing organic traffic with promoted traffic is often a necessary combo, especially when scaling. But organic leads are the ultimate goal. Lead generation on auto-pilot!
These are the leads that content marketers target. Content marketers create great content magnets (blogs, guides, websites) that earn organic placement on search engines like Google or YouTube. High-quality content earns more and more visibility and people click through to your site.
Why They Contact You
These are high quality online leads because you’ve often earned their trust before they even reach out to you.
“I’ve been following your blog for months, and we are ready to sell in July and would like to set an appointment”. These are the kinds of emails you get when you chase organic leads and do content marketing. You don’t have to sell them on your services. They’re already sold!
Maybe you capture emails from some of these folks who use your resources (e.g. buyer guides, market updates, etc), at which point you can also nurture them with a great email campaign and high-quality content.
Who Should Target Organic Leads
Content marketers, YouTubers, bloggers, website geeks, social butterflies…
Most agents will likely want to target some form of organic leads. Once you’ve built the foundation, they are free leads! No monthly fee. No competing with other agents. They are your audience and your lead gen system.
Organic lead generation can take a while to get established – often years. It’s a good idea to begin building your organic lead generation early, but be prepared to supplement it with some paid leads while you get it going.
Organic Tools
Portal Leads
Examples
Where You Find Them
The portals are giant home search websites from which you can buy leads. Because of their vast resources and digital savvy, they rank for most of the most competitive keywords on Google. You can’t compete with them there.
But why bother competing when you can join them?
Advertising with one, or several, of the portals is a perfectly legitimate way of keeping your pipeline full of business.
Why They Contact You
These are relatively hot leads because they are actively looking for homes (or sometimes selling homes) when they submit their information.
Unlike referral or organic leads, however, they do not have a connection or relationship with any particular agent, yet. They’re a jump ball! Up for grabs for anyone!
They do however like or trust the portal they are searching. That is why they reach out to you and the other agents whose pictures conveniently are sitting next to the home they want.
Who Should Target Portal Leads
The fastest agent in the West!
Folks looking on at homes on portals often are already along the path to buying a home and are used to instant gratification in online shopping. That means they want to hear quickly from an agent when they ask for more information.
That’s also why many portals hand out leads to multiple agents at once, letting the quickest and best win out.
They get a bad rap, but there are agents who have built their entire business on Zillow and do very well. Many top teams rely on these leads as major pillars of their business. It works.
If you know you can respond quickly, have a good follow up system, and perhaps even an internal sales agent (ISA) or virtual assistant (VA) like Agentology, portal leads are worth considering!
Pay-Per-Click (PPC) Leads
Examples
Where You Find Them
You can run campaigns yourself in Google AdWords. But optimizing your ads, A/B testing, and conversion-rate-optimization is complex and competitive enough that you are best off outsourcing it.
Just about every digital marketing company is eager to run your Google AdWords campaigns. Many real estate platforms offer PPC marketing at an additional cost.
It’s not just Google. Bing has an advertising program, as well.
Why They Contact You
These prospects are searching for specific answers. How much is my home worth? What is this neighborhood like? What parts of my town are USDA loan eligible?
These search queries return results – some organic, and some paid. These highly optimized paid results, if promising answers to their needs, will get clicks and earn you business!
Who Should Target PPC Leads
Agents with big budgets and great followup.
PPC is expensive. Your average cost per conversion can be $1000+. And you pay that money up front, even though they might not close for 6-12 months.
It is also very competitive, meaning that you will need to maximize the buyer and seller leads that comes in. That means you need a fantastic follow-up and nurturing system for these leads. Even just a few slipping through the cracks can tank your return on investment.
Don’t be afraid of these, though, as at least a third of the top agents and teams in America lean heavily on PPC leads.
Paid Social Media Leads
Example
Where You Find Them
You can run your own Facebook Ads fairly easily. Similar to PPC, there are some best practices when it comes to optimizing a campaign, and it can get quite expensive. It is also one to consider outsourcing.
There are companies like BoldLeads that happily will track down leads for you.
Others like Curaytor help you craft your own Facebook ads, and give you control over what you are doing and how much you are spending.
Why They Contact You
You happened to be in the right place at the right time.
Social media ads do have targeting mechanisms in which you can focus on particular demographics. But unlike PPC ads in which you know the user is specifically searching for what you’re offering, social media ads are interruptive. Your average person is probably looking at cat videos, not homes for sale, when your ad pops up in their timeline.
For that reason, you tend to have to get your ad out to a lot of people. And the message is often watered down to try to induce clicks. For example, “Find out what your home is worth” is going to get a lot of Curious George’s who aren’t actually in the market to sell.
For that reason, lead quality doesn’t get much lower than social media ads.
Who Should Target Social Media Leads
Because of the lead quality, you need to be prepared to sift through the garbage, and figure out who is an actual opportunity, who is a future opportunity, and who is a drain on your time and resources. Be sure you have a great CRM and follow up system in place.
You’ll get a lot of leads!
List Leads
Examples
- Cole Realty
- LandVoice
- Quantum Digital
- RedX
- SmartZip
Where You Find Them
A list can be as simple as USPS’s “EDDM” (Ever Door Direct Mail) system, in which you blanket entire mail routes with your postcards.
Hey – direct mail isn’t as popular as it used to be, meaning it is easier to stand out!
Other lists are phone number lists by services like Vulcan7 or RedX – expireds, FSBOs, and other likely home sellers.
Lastly, the new AI “smart lists” like SmartZip promise to use AI to estimate which home sellers are likely to move and allow you to focus your advertising on them.
Why They Contact You
If it’s in your farm, it is because they’ve been getting your junk mail forever (hopefully useful junk mail), and you happen to be there convenient when they are finally at a decision point.
Alternatively, perhaps you are contacting them, if their home just expired on the MLS or they listed their house as a FSBO.
Lastly, maybe you have their phone number.
These are usually weak leads because most people have cell phones which, unlike landlines, are notoriously difficult to attribute to a residence.
It’s also very hard to narrow down which homeowners are most likely to be selling. Sure, the programs like SmartZip promise to use AI to make really good guesses, but even then it is a guess.
Most other lead sources require at least a little bit of buy-in from the lead, who is inviting you to call.
Not list leads.
That makes them one of the weakest leads for real estate agents(but also easiest to get huge quantities!).
Who Should Target List Leads
Folks working expireds and FSBOs should be targeting these lists!
Also, investors, or investor-friendly-agents should consider direct mail and similar prospecting methods for these kinds of leads. Probate lists is another example in which an agent can be an invaluable resource to home sellers.
Picking Your Lead Generation Strategy
Now that you understand the pros and cons of each of the 6 major types of leads, you want to begin choosing a few of the 27 lead generation strategies on which you want to build your business.
Don’t choose too many or you’ll spread yourself thin. Don’t choose too few or a slump in one will doom your entire business.
Conclusion
Understanding where your leads are coming from is useful in assessing the quality of them, what you should expect, and how to handle leads as they come in.
It also should give you insight into which lead sources you should start building (organic and referral) while perhaps using paid lead sources to sustain your business in the meantime.
Lastly, never say “The leads were bad!”. Nothing will make you look more like a noob. Yes, they probably were, depending on the lead source! But that is to be expected, and there are many agents making a killing with each and every type of real estate lead listed above.
Go become a successful agent with your follow up, follow through, and follow back!
Updated April 3, 2023; Originally published September 29, 2018.
