How much to spend on online real estate leads every month is the most commonly asked question from anyone about to embark on Google Ads or social media marketing.
While there are several factors to consider like cost per conversion (CPC) and cost per lead (CPL), the short answer is that a good starting budget for online lead generation for real estate agents is $1,500 per month.
Don’t just run out and invest $1,500 yet. There is a lot to understand to ensure you spend your money wisely to close sales rather than compile leads.
Keep reading to learn about online ad spending for real estate agents, the difference between buying and generating a lead and the benefits of generating online leads via Google Ads and Facebook Ads rather than buying them from a third party like Zillow.
Buying vs. Generating Real Estate Leads
A realtor’s CPL depends on where they are getting the lead.
Buying leads is done through a third party like Zillow or realtor.com. With these companies, you are buying real estate leads they generated and vetted, removing the need for you to do the leg work.
Generating real estate leads is accomplished by creating a system and process where you procure leads from marketing tactics like Google pay-per-click campaigns, and then drive them to your website where they must be qualified.
Buying leads is the more expensive option. On Zillow, for instance, a real estate lead can cost $50 to $500 per lead depending on the market.
Sierra Interactive published an article about their average CPL and found it costs $9-13 for buyer leads and $26-30 for seller leads. At Agent Launch, the average CPL is $15 whereas Zillow's CPL can be upwards of $1000 or more.
If you’re generating leads through Google or Facebook, you’re paying for impressions and search volume and CPL is determined by supply and demand.
- If more people are paying for impressions, the cost increases.
- Times when more people are searching for homes result in a higher CPL.
- If fewer people are paying for impressions, the cost decreases.
- Times when fewer people are searching for homes lower the CPL.
TIPS FOR TOP REAL ESTATE AGENTS: CPL isn’t the best metric to figure out if the leads you’re getting are contributing to your sales. A higher CPL can produce better leads whereas a lower one can produce more inexpensive leads that are less likely to convert.
Benefits of Online Leads for Real Estate
There are four benefits to online real estate leads:
- Online leads for real estate agents are predictable. A consistent funnel and strategy can generate roughly the same amount monthly. This will help you streamline your process.
- Online leads are highly targeted. On Google, you can target based on a user’s search history. On YouTube, you can target based on what videos a user watches.
- Online leads offer extensive reporting and tracking. Billboards and bus ads can create more impressions but you have no way of tracking it besides a rough estimate of how many people and drivers saw it, assuming they saw it.
Online lead generation is scalable. For instance, spending $1,000/month to get upwards of 70 leads can be easily scaled to $10,000/month to receive 600-700 leads. Off-line lead generation doesn’t work in a way where if you spend more you will receive more leads. It’s hit-and-miss.
How Much Should a Real Estate Agent Spend on Online Leads?
A good starting budget for online real estate leads is $1,500 per month. With a $1,500 budget using a CPL of $15, you should get about 100 leads per month.
Starting with a lower budget will put the focus on the unqualified leads as you will most likely disqualify about 50% of all leads because they are unreachable, unresponsive or tire kickers (a reality for all agents). About half of all leads are dismissed right off the bat.
Real estate is one of the longest sales cycles, so starting with a budget of $1,500/month will help fill your pipeline over twelve to twenty-four months.
TIPS FOR TOP REAL ESTATE AGENTS: It’s okay to pause your lead generation for a short time to focus on pushing some leads through your pipeline to become clients and close deals.
Watch Eric break down what you should spend on online real estate leads and provide the steps for ROI calculation:
Are Online Leads for Real Estate Agents Worth the Investment?
There’s no question that a realtor’s efforts and lead acquisition dollars should be spent on online lead generation.
This will allow you to create a high volume of leads and successfully execute an omnipresent strategy that includes, retargeting leads with Google, YouTube and Facebook, in-person marketing, targeted mail drops and personalized video content and outreach.
TIPS FOR TOP REAL ESTATE AGENTS: If you are determined to close deals right away, focus on the people in your pipeline, not real estate lead generation. Lead generation is about building future business.
Are Google Real Estate Leads Legit?
Google is a powerful asset for real estate agents and is proven to generate qualified leads and help realtors stand out in a crowded field.
The trick is to understand how to effectively use and optimize Google Ads to connect with targeted users who are ready to convert into leads, and clients soon after.
FAQ
How much should a real estate agent spend on online leads?
It’s recommended to start with a $1,500/month budget and scale from there. This should give you a good number of leads once you’ve disqualified those that aren’t legitimate.
What are the benefits of online leads?
Online leads are predictable, targeted, trackable and scalable. They can be more cost-effective if you properly manage your budgets and campaigns.
What is an online real estate lead?
An online real estate lead is a homebuyer or seller who has expressed some interest in your real estate services via an online platform or your digital marketing. For example, if a potential lead clicks on your Google Ad for real estate, arrives at your leading page and then submits a form, they become a real estate lead. It's then on the real estate agent to follow-up determine if they are a cold, warm or hot lead and work to convert them into a client.
