Are you willing to invest ($3,000 a month) on leads?

Most lead generation companies make you sign a 6-month contract and commit to $18,000 for 6 months worth of advertising.

Leads were beyond suspicious and in my humble opinion, consisted primarily of fake leads.  So if a lead costs $10 then assume a sale would cost a $1000 (100 leads at $10 each).  If that is less than the profit you made on the home sale then it may be a good source.

Facebook ads as a potential source for leads as well you can generally get leads for $5-$10 in most markets with Facebook and can be another option to test.

Critical Mass Budget

Now an impression alone doesn’t mean a lead and so it is important to realize the difference between the two. Typically to get a lead you can expect to need about 500 – 1000 impressions, this makes the cost per lead often around $30 – $60, but this can vary depending on your market.  Generally, you can expect that around 3-5% of leads will turn into a sale.

This means that your cost per sale would be around $900 – $1500 dollars depending on the cost per impression and conversion of leads to sales.  Now you can quickly determine if the site will work for your real estate model by taking the sale price of your home and the typical 3% commission to see if enough profit is made on each home sold. If your homes sell for a minimum of $100,000 in your market, RealtyGo can be a great way to generate new business.  Remember that RealtyGo is different than the standard lead generation service available to realtors and gives you exclusivity on listings you claim.

The cost of an Agent lead platform is determined by two major factors: The average home price in your chosen zip code and the number of other agents competing for space. Using Zillow Premier’s cost estimator for Michigan, for example, we found monthly ad budgets ranging from just shy of $150 to close to $1,000.

Use one of Zillow’s tools for helping agents determine where they want to advertise and how much they want to spend.

***  For example, in the Northern Michigan town of Traverse City, it takes an estimated $743 per month to acquire five leads in the zip code 49686. However, in the neighboring zip code of 49696, five leads would take only $672.

Unfortunately, while there is no real ceiling to investing in the Agent lead platform, there is definitely a floor.