The Truth About Online Lead Services: Worth It or Waste?
Most real estate agents face the same question: should I buy leads online, or build my own lead generation system? The answer isn't what most vendors will tell you. Online lead servicescanwork—but only under specific conditions, and for most agents, there are better paths to consistent business.
This guide breaks down the actual economics of purchased leads, shows you when they make sense, and reveals the alternatives that typically deliver better ROI for real estate professionals.
The Real Cost of Bought Leads (It's Not What You Think)
When you see a lead service advertising "$20 per lead" or "$50 per lead," that's only the beginning of your actual cost.
The real economics look like this:
Lead fee:Real estate lead services typically cost between $30–$175 per lead depending on the source and quality level.ClickFunnels reports that average lead generation pricing ranges from $30–$175 per lead across channels.Some platforms charge even more for exclusive or higher-intent leads.
The 80/20 reality:Industry benchmarks show that roughly 20% of purchased leads ever convert to clients. That means 80% of the leads you buy will never become customers.According to Martal's lead generation statistics, approximately 20% of leads turn into sales, leaving 80% who never buy.If a lead costs you $75 and you close 1 in 10, your true cost per acquired customer is actually around $750—before you count the hours you spend on calls, follow-up, and no-shows.
Hidden time investment:Purchased leads require active follow-up. Unlike referrals (where trust is already built), bought leads are cold contacts who don't know you. You need immediate response, consistent nurture campaigns, and a structured follow-up system just to keep them warm enough to convert.Research from Impact Plus shows that response time and follow-up dramatically affect whether cold leads convert; most vendors provide only the contact data and nothing beyond that.
Lead quality varies wildly:Many lists are shared across multiple vendors, which means the same prospect might be called by five different agents the same day. You're competing on price, not differentiation. That drives your conversion rate down even when the advertised CPL looks attractive.
The bottom line: if your true client value (not gross commission, but actual profit after expenses) is under $2,000–$3,000, purchased leads are extremely hard to justify financially.
When Online Lead Services Actually Work for Real Estate Agents
Online lead services aren't universally bad—they work in specific situations where the math and positioning align.
High lifetime value:In real estate, this means clients who close multiple transactions over time. If you have a strong database nurture system and past clients who refer, you can justify higher lead costs. The lifetime value of a client who buys twice and refers three more is substantial enough to absorb expensive lead costs upfront.
Tight geographic targeting:Services like Facebook Lead Ads and some specialized real estate platforms let you target by zip code, price range, and buyer intent. If you're focused on a specific neighborhood and building authority there, targeted paid leads can work better than generic national pools.
Strong follow-up systems in place:Teams that respond within minutes, qualify leads immediately, and run a disciplined follow-up cadence (email sequences, SMS, regular calls) can make expensive leads profitable. The key is treating leads like a sales pipeline, not just a contact list.
Niche positioning:Agents who specialize in luxury homes, new construction, investment properties, or specific buyer types (first-time buyers, relocations) often see better conversion from targeted lead services because their value proposition is clear and differentiated.
If you have none of these, purchased leads will likely disappoint you—no matter the vendor's promises.
When Online Lead Services Become a Money Drain
You're more likely to waste money and burn out in these situations:
Generic positioning in a crowded market:If your message is "I sell real estate in [town]" and you're competing with 50 other agents, purchased leads turn into price wars.ClickFunnels research notes that in competitive markets with low-ticket transactional work, a $50–$150 cost per lead is very hard to justify.Prospects shop you against others, and commissions drop.
No systems for follow-up:Without a CRM, email automation, or a consistent call schedule, you're essentially renting an expensive contact list and watching it go cold.TrustMary research shows that only a single-digit percentage of people are ready to buy at any moment, meaning you need a nurture system to convert the 90%+ who aren't ready now.Most purchased leads need 5–7+ touches before they're ready to engage. Miss that window and the lead is wasted.
Low market activity or seasonal downturns:In slow markets, even high-quality leads convert at lower rates. You're paying for volume when you can't handle the conversion work, or when buyer demand just isn't there.
Lack of differentiation in your offer:If you're not offering something unique (neighborhood expertise, investor connections, first-time buyer education, etc.), prospects have no reason to choose you. They compare you on commission and price—a race to the bottom.
The opportunity cost is real: money you spend on cold leads could have gone into content, SEO, community presence, or referral systems that keep producing long-term.
The Better Alternatives: Lead Sources That Actually Deliver ROI
For most real estate agents, these channels deliver better ROI than generic online lead services:
Referrals and word-of-mouth:Referral leads often cost around $25 per lead (or less) and have the highest close rates because trust is pre-built.Keap's research on lead generation strategies shows that referral leads have the lowest cost per lead and highest close rates because trust is pre-established.A client who refers you has already vouched for your professionalism. This is why successful agents obsess over past client relationships—the economics are undeniable.
SEO and content marketing:Search-driven leads cost significantly less than purchased lists—often around $30 per lead—and they're more qualified because the prospect is already searching for solutions. A blog post about "homes in [neighborhood]" or "how to sell your rental property" attracts intent-based traffic and builds authority over time.
Your owned audience (email and website):Your website and email list remain core lead engines.Email Vendor Selection research indicates that a large majority of marketers use email and owned audiences successfully to generate leads and sales.Agents who build email lists from past clients, website visitors, and community engagement can generate consistent deal flow at minimal cost. Each email sent to your database costs pennies, not dollars.
Social authority and LinkedIn:Consistent content on LinkedIn, local Facebook groups, and community platforms builds authority and drives inbound inquiries. This works especially well for agents who educate (market updates, buyer tips, neighborhood guides) rather than pitch. The cost is your time, not per-lead fees, and inbound leads convert higher.
Circle prospecting and door knocking:Low-tech but proven: targeting homes that sold recently in a neighborhood, expired listings, and active outreach to past buyer/seller neighborhoods generates leads at near-zero cost (your time only) with good conversion rates because you have local expertise to offer.
A concrete example: an agent who blogs consistently, maintains an email list, and asks every happy client for one referral will typically generate more deal flow than an agent paying $50–$100 per lead from an online service—at a fraction of the cost over 6–12 months.
The 90MMD Framework: Building Your Own Lead System
At Lesix Agency, we help agents build systematic lead generation rather than chase expensive vendor solutions. The 90-Minute Marketing Department approach means dedicating 90 minutes daily to high-leverage marketing activities that compound over time.
Instead of buying leads, you're building assets: an email list that grows, content that ranks in search, relationships in your community, and past client connections that turn into repeat and referral business.
This shift from "buying leads" to "building systems" is why many agents go from feast-or-famine cycles (dependent on whoever they're paying that month) to consistent, predictable business (driven by assets they own).
The math: if you spend 90 minutes daily on referral asks, content creation, email nurture, and community presence, you'll generate 3–5 qualified leads per week within 6 months. At a typical 15–20% conversion rate, that's 2–4 closed deals monthly from owned systems—without paying per lead.
The Bottom Line: Do Online Lead Services Make Sense for You?
Here's the decision framework:
Buy leads if:
Your client lifetime value (multiple transactions + referrals over time) exceeds $3,000+
You have a tight geographic niche and can differentiate clearly
You have systems (CRM, email, follow-up cadence) already in place
You're scaling an existing business and need volume fast
Build your own system if:
You're establishing your business and building relationships matters more than speed
Your positioning relies on expertise, local knowledge, or relationships (it should)
You want predictable, repeatable business that doesn't depend on vendor relationships
You're willing to invest time now to reduce costs and increase profit over 2–5 years
The hybrid approach:
Use low-cost targeted ads (Facebook, local search ads) to build your own email list rather than buying vendor lists
Allocate 70% of lead effort to owned systems (referrals, content, past clients) and 30% to paid lead testing
Track cost per lead, conversion rates, and deal value for every source so you know what's actually working
Next Steps: Build Your Lead System
The agents we work with at Lesix Agency don't compete on who can pay the most for leads. They win by building systematic approaches to lead generation that become more profitable and predictable over time.
If you're ready to move away from vendor dependency and build a lead system that actually works—one that gets better and cheaper the longer you run it—let's talk about your specific situation. What's your market, your typical client value, and your current lead sources? We'll sketch out a concrete plan showing you exactly how to generate consistent business without chasing expensive lead services.
Ready to discuss your lead generation strategy?Schedule a discovery call with Rob at The Lesix Agency. Visithttps://lesix.agency/generalto find a time that works for you. We'll review your market, your current results, and build a plan customized to your situation.
