We received a question on The Real Word a few weeks ago, asking if we thought it was a racket that realtor.com will charge for leads on your own listing. As more lead generation sites are being used by buyers, the more this question will come up.
Here is what is happening
We know that realtor.com has acquired Opcity, which means if you have a listing on realtor.com, the site will now use Opcity’s lead referral platform. If the listing is yours and you receive a buyer lead, you will pay a referral fee to complete the transaction with that buyer.
My team, One + Company, has used Opcity for buyer leads, and we are finding they do a pretty good job of getting potential buyers on the phone, asking them a series of questions, and making sure they are qualified to buy a home. If you are not strong with lead generation or converting those leads, paying a referral fee for qualified leads is a no-brainer.
Who has control?
If you go back to The Real Word 067 with Tom Ferry, we touch on the fact that whoever holds the lead is in control. If realtor.com has the lead, they will charge a referral fee. As the listing agent, you can choose not to put your listings on Realtor.com and work to generate your own leads.
Keep in mind, the referral fee is only coming out of the buy side. If you have the listing, get the referral, and can complete both sides of the transaction, you keep the total commission for the list side, and only pay a percentage of the commission on the buy side. If another agent brings the buyer, you don’t see any of that commission.
There are plenty of buyers who go through realtor.com or Zillow, and I think we are moving in the direction of every buyer lead coming with a referral fee. I also believe those referral fees will rise. Right now, referral fees are typically between 30-35%, but I can see them going as high as 50% in the future. So you have to ask yourself, how much are you willing to pay?
These sites know that there are Realtors who will take the lead for 40-50%, especially agents who are just starting out. By accepting these leads, new agents are able to get people in their pipeline and develop a relationship. When building a career, creating relationships is what it is all about.
Investing in Your Business
Bottom line is, as an entrepreneur, you must invest in your business. The good news is you can decide what that looks like.
When working with buyers, you will need to be comfortable with paying a fee, because the lead is your way to closing a transaction. Many times, this looks like paying platforms or brokerages a referral fee, but you could also invest in click funnels that help you acquire leads, or invest in content marketing.
If you want to stay clear of referral fees for buyer leads, get more listings. When you control the inventory, you control where buyers have to go.
Jump to 11:22 of The Real Word 070 to watch the full discussion on this topic: