Real Estate Lead Cost – Should Realtors Buy Leads?

If you are or are about to be a realtor, you probably would like to know more about real estate lead costs.

Depending on many variables and factors, primarily your real estate marketing channels, your sales skills (including copywriting), and thus the conversion rates, the real estate lead cost will range between $11.60 and $1,200 per lead.

Would you like to learn how I got to these numbers?

The rest of the article will discuss them in-depth and explain why the cost per lead may not be the best metric.

Why There Is No General Answer to Real Estate Lead Costs

Wouldn’t it be nice if I could just tell you, ‘My dear real estate agent, you will always pay exactly $30 per lead and will always convert 10% into a sale of a nice $600,000 property no matter what.’?

That would be almost heaven, with no uncertainties, guesswork, or costly marketing tests and mistakes.

You would know that by spending $300, you would get precisely ten leads and make one sale, earning you $600,000 x 5%=$30,000 in real estate commissions.

This would mean $300 would earn you $30,000 and thus give you an ROI of 10,000% of your $300 marketing investment.

Unfortunately, reality (maybe that’s not the case in the real estate market in Narnia) is not that nice.

And besides, having such steady numbers would mean dealing with predictable robots or the Bork from Star Trek as market participants.

So firstly, it depends on the target group you want to market to (buyers or sellers)

The next variables that affect it are the marketing channels you use to reach them, your copywriting quality, and your offer, which leads to a specific conversion rate.

Marketing channels can be roughly divided into digital marketing and offline marketing.

Since I don’t know whether you target buyers or sellers, I will give you a rough overview of the available channels.

For paid offline marketing channels, the following are available:

• Magazines (print ads)
• Press releases
• Newspapers
• Television
• Radio ads
• Flyers
• Direct mailing
• Cold calling (in general)
• Cold calling (calling expired listings)
• Calling FSBOs

For digital marketing channels (mostly paid advertising), the following are available:

• Your own web presence with content marketing/ SEO (this can be a hybrid consisting of your own time investment and/or outsourced work) via Blogs, Podcasts, Vlogs, etc.
• Email advertising
• PPC advertising on social media, such as Facebook Ads, Pinterest Ads, Twitter Ads, Instagram ads, LinkedIn Ads, etc.
• PPC search advertising or search engine marketing (SEM), such as Google Ads, Bing Ads, etc.
• Real Estate Listing Sites
• Done-for-you real estate lead generation services
• Text message prospecting
• Push notification ads
• Native ads

So let’s get closer to the actual numbers. How?

I will pick marketing channels with enough data about real estate lead costs. Where there is not, I will approach it with a short calculation based on logic.

Before we get into the different marketing channels, let’s establish a basis to calculate the costs per lead to better estimate channels where secondary data wasn’t available during my research.

Before We Can Calculate Some Real Estate Lead Costs, We Need Lead Conversion Rates

In my article about real estate prospecting conversion rates, I analyzed and included the new data from 2022, which we can also use here.

Ads in magazines fall under the print ads category.

I couldn’t find any reliable hard data about print ad conversion rates during my research.

This is likely because it’s not a type of advertising that can be as easily measured as digital advertising. This is even more true when it comes to press releases.

Additionally, most companies using these two methods won’t publicly make this data available.

So, in this case, we assume the generic conversion rate of 1-3% to calculate the cost per lead later on for both.

The data situation for newspaper advertising conversion rates is not much better. But I could find some data, even though it was not enough.

According to this source, the average conversion rate for newspaper ads is allegedly 44% (between 10 and 77%).

Yes, radio still exists too, and so do radio ads. In my article about prospecting conversion rates, I found out that they have a conversion rate of 14%.

According to this source, when it comes to flyers, the conversion rate is between 2% and 3%, so an average of 2.5%.

The situation is slightly better with direct mailing, where the conversion rate is 6.6%.

Regarding cold calling, you can expect a conversion rate of 2% (source).

There are more sources for content marketing, but I hoped to cross-reference more than five. According to this source, the conversion rate for content marketing is 2.9%.

I also discussed email advertising in my article about real estate prospecting, and there I mentioned a conversion rate of 1.4%.

No decently reliable data about conversion rates of real estate listing sites were available.

The same is true for the different marketing platforms that offer you done-for-you real estate lead generation, such as Zurple and the others I mentioned.

But that’s no biggy since data about the costs per lead are directly available, at least for the three major ones Zillow (Premium Agent), Trulia, and Realtor.com.

And related to the done-for-you services, costs per lead could be calculated based on the monthly costs and the number of leads you can expect to get from them.

According to this 2021 data, the conversion rates in the real estate field range from 3.9% on Google Ads (source) to 10.68% on Facebook Ads (source).

I must say, and excuse my French, but Twitter sucks a bit in terms of click-through rates. It’s between 0.45 (organic Tweets) and 0.86 (Ads)%.

In my article, I calculated that it’s even worse regarding Twitter Ad to landing page conversion rate, which is ~0.02%.

I already covered in this article why it’s not the best lead generation method.

Bing Ads look quite good compared to Google Search Ads. Specifically, within the real estate industry, you can expect a conversion rate of 5.13% (source).

Remember that the costs per click are often lower than on Google since the platform is not that well-known and in demand.

You can expect 15% for push notification ads, native ads a 0.3% to 22%, and text message prospecting at a 16% conversion rate, as already covered in this article.

Also, for all the data above, depending on the marketing channel, the target audience will be in a different product/service awareness stage, so you can’t compare the numbers directly.

This means that someone searching for real estate-related things on Google has already decided about their interest in real estate.

This is even clearer when someone types in the search phrase “houses for sale in XYZ.”

Whereas on Facebook, someone could just watch a cat video found on a friend’s wall and then get “interrupted” by a Facebook ad about real estate just because they liked a video about a nice home once.

The potential lead might still have more interest in buying a new cat house than an actual one.

All this will determine the quality of the lead you generate.

You could say the earlier the potential lead is in the product/service awareness stage, the lower the lead quality.

That’s why many people say you may get many leads on Facebook, but the lead quality is not the best.

For the overview table at the beginning of this article, I calculated the average lead-to-appointment conversion rates based on the available data.

And the overall average is 8.48%. But this number doesn’t say much. Because of the real estate lead costs, we will have to calculate individually for each marketing channel.

So, let’s do this next.

How Much Do Real Estate Leads Cost?

This section will finally cover how much real estate leads cost across different marketing channels available.

To make this section even more complete, I also included the data I collected and calculated in my article about real estate prospecting rates.

So I will either calculate the costs of the following real estate marketing channels based on the conversion rates and/ or use already existing data :

• Magazines (print ads)
• Press Releases
• Television ads
• Radio ads
• Flyers
• Direct mailing
• Cold calling
• Calling expired listings
• Calling FSBOs
• Content marketing/SEO
• Email marketing
• Zillow (Premier Agent)
• Trulia
• Realtors.com
• Facebook ads (social PPC advertising)
• LinkedIn ads (social PPC advertising)
• Twitter ads (social PPC advertising)
• Google ads (search PPC advertising)
• Bing ads (search PPC advertising)
• Push notifications
• Native ads
• Text message prospecting
• LeadPops (done for you real estate lead generation)
• Street Text (done for you real estate lead generation)
• Zurple (done for you real estate lead generation) 
• Ylopo (done for you real estate lead generation)
• Offrs (done for you real estate lead generation) 
• Chime for real estate (done for your real estate lead generation features) 

The Real Estate Lead Cost of Print, Radio, and TV Ads and Press Releases (Traditional Marketing)

Calculating the real estate lead costs for print, radio, and tv ads and press releases is challenging based on the available data.

Why?

Because different magazines, radio, and TV stations have different reaches and costs.

Luckily I found some secondary data during my research that had already determined the average costs per lead from print, radio, and tv ads and press releases.

Consider it a ballpark since it’s not data particular to the real estate industry.

According to this source, you can expect to pay between $37 and $1200 per lead for print and tv ads and $294 for press releases.

In my article about real estate prospecting rates, I already calculated the costs for radio ads based on data from other sources. You can expect to pay $75.12 per lead for these ads.

The Real Estate Lead Cost of Flyers and Direct Mailing

These lead costs are easier to calculate since there is more control over the reach data. If you print and deliver 1000 flyers or direct mail, then your reach will usually be also 1000 (unless something goes wrong with the delivery).

You can read about direct mailing in this in-depth article.

The cost per lead for direct mailing resulted in $24.46.

I have not yet calculated the cost per lead for flyers, so I will do it now.

Since flyers have a conversion rate of 2.5%, you will need to deliver 40 flyers to generate one lead (1 divided by 2.5%).

To print 40 flyers, you will need to pay 4.3 cents per flyer (source). That is a total printing cost of $1.72.

But that’s unfortunately not yet your cost per lead. You will need to factor in the labor costs to deliver 40 flyers.

We can estimate that you can deliver 40 flyers in a crowded street within one hour.

Let’s assume a slightly above minimum wage of $10 per hour for someone handing out flyers and add on top a one-hour drive (half-hour to the place of delivery and half an hour back).

Now we are talking two hours of work which is $20 for labor costs.

We will neglect the design costs, but you might want to add them if you use a really professional design and a pro-copywriter for the flyer.

So the total costs are now $21.72 to generate one lead with flyers.

The Real Estate Lead Cost of Cold Calling, Calling Expired Listings, and FSBOs

All three marketing methods can be put in the same category: cold calling.

And here, I already determined that the lead-to-appointment conversion rate is, on average, 2%, and the cost per lead is $86.40.

At first glance, you may think that it’s basically free since you just use your phone.

But you will need to make approximately 50 calls to make one conversion (1 divided by 2% conversion rate).

Assuming you can do 12 calls per hour, it would take slightly more than 4 hours.

An hourly rate of $21.60 would get you $86.40 to convert one lead into an appointment.

If you want to be really exact, you would need to factor in your monthly phone bill and calculate what you pay for your phone per hour and multiply that by 4.

Also, the time you need to collect the phone numbers you call from different sources or the cost per “skip traced” contact.

All that would need to be added to the $86.40.

The Real Estate Lead Cost of Content Marketing

Although the concrete source of the data they attained from the web is unclear, according to this source, the average cost per lead of content marketing is $92.

However, the author seems to have worked with 5000 companies and may have gotten the data from there.

During my research, I couldn’t find the particular cost-per-lead data for real estate content marketing.

According to my experience, this number is likely lower.

Why? Let me explain.

The above source shows that the lead conversion rate for content marketing (blog articles) is 2.9%. Per lead, you would need 35 visits.

Suppose you get an average of 200 visits per blog post ranking on page one of Google.

You can get this result by conducting a good search and competition analysis and producing quality content.

To generate 17 leads per month, you would need 583 visits.

And to produce this number of visits, you need to write 30 articles assuming you get it right with the content quality, search, and competition analysis in 10% of the cases.

Assuming a time requirement per blog post of four hours would result in 120 total hours of your time to produce that content.

If you have an hourly rate of $21.60, the total cost would be $2,592.

Now we break the annual website hosting and domain expenses down to the per lead basis, and you can assume $166 per year.

So the monthly website hosting and domain costs per lead (assuming your goal is 17 leads) will be $0.83

Can you divide the $2,592 by 17 leads and add the $0.83 per lead (hosting and domain costs)?

You shouldn’t because this would assume the articles wouldn’t generate leads anymore after one month.

But we can assume that once it ranks, it could stay on the first page of Google for two years without making significant improvements.

So the actual cost per lead is $7.31. ($2,592 divided by 17 leads divided by 24 months plus $0.83).

The Real Estate Lead Cost of Email Marketing

Calculating the cost per lead for email marketing is a bit more tricky.

Why?

You also have to factor in that you usually do a lead nurturing campaign with several touchpoints once you get a new email address.

I already explained a more thorough calculation in this article.

The cost per lead for email marketing is $154.50 if you apply the maximum number of recommended touchpoints in an email nurturing campaign of eight.

Of course, it could be even half if you have 16 touchpoints. But for the sake of going with ideal numbers, let’s stay with eight touchpoints.

The Real Estate Leads Cost of Well-Known Real Estate Listing Platforms

These are the 13 well-known real estate listing platforms:

• Zillow
• Trulia
• LoopNet
• RealtyTrac
• Apartments.com
• Rent.com
• Movoto
• Apartment Guide
• HotPads
• ForRent.com
• Homes.com
• Redfin
• Compass

I picked the two major ones and calculated the average costs per lead.

Zillow (Premier Agent):

There wasn’t much to calculate since secondary data was available. The average cost per lead ranges between $20-$60 (an average of $40).

Trulia:

No secondary data was available for Trulia, so I needed to calculate the cost per lead.

The cost per month to list a rental property there is $29.

According to this source, they have 23 million visitors per month, and according to Trulia itself, over 1 million homes are listed.

So, a listing from you wouldn’t get 23 million visitors (that would be nice), but rather about 23 million divided by 1 million homes, which would be 23 visitors per month (assuming an equal share of the traffic).

Applying the 4% conversion rate above would mean barely one lead (0.92 leads) per month per listing.

Thus we can deduce that the cost per lead per property you list would be $29.

The Real Estate Lead Cost of Facebook Ads and Google Ads

This one was also a bit easier to research.

This website and this one already have some good information about that, particularly for the real estate industry.

You pay $44.70 on Google Ads, and on Facebook Ads, you pay $16.52 per lead.

The Real Estate Lead Cost of LinkedIn Ads

I calculated the cost per lead of LinkedIn Ads already in my article.

Generally, you can get between a 5% and 15% conversion rate with LinkedIn traffic.

And you pay $105.20 per lead, while the lead quality is the highest compared to other social media platforms, as mentioned in the statistics in my article.

The Real Estate Lead Costs of TikTok Ads

The real estate lead costs of TikTok Ads are based on my estimation in my article “How to Use TikTok in Real Estate.”

Also, this estimation is based on the slightly better measurable TikTok ad type of “Invideo Ads” and a cost per a cost-per-mill impression basis (CPM) of roughly $1.82.

Since there is not much performance data about TikTok ads yet, I market the cost per lead in the overview table as “with reservation.”

According to my calculation, this cost per lead is $1.37, and the conversion rate is 6.65%.

The Real Estate Lead Cost of Twitter Ads?

In this article, I already analyzed Twitter quite a lot regarding marketing performance for the real estate industry.

On average, you pay $0.38 per click for Twitter ads (source).

With an average landing page conversion rate in real estate of 2.6%, you would need 38 clicks to generate one lead (1 divided by 2.6%).

This would be a cost per lead of $14.63 (38 clicks x $0.38).

The Real Estate Lead Cost of Bing Ads

I have not yet analyzed Bing ads for real estate in my articles.

Although small compared to Google Ads, it can be a great additional marketing channel since it is often overlooked.

Most often, the costs per click are between 33% (source) and 60% (source) lower than on Google ads.

The average cost per click is $2.88, the average conversion rate is 5.13%, and the average cost per lead is $29.40 for the real estate industry (source).

The Real Estate Lead Cost of Push Notifications

I had reservations about the lead costs of push notifications in my article about prospecting rates since my calculation resulted in a cost per lead of a ridiculously low $0.70.

This might be true since the costs per click start at $0.1 per click (source).

Why did I have my reservations?

Because most of the data gathered for these costs come from campaigns in industries with lower price tag items.

I suspect that the costs may actually be 5 to 6 times higher for real estate. I would be pretty curious about the lead quality, then.

The Real Estate Lead Cost of Native Ads

I consider the situation of native ads similar to the one with push notifications.

In the same article I mentioned above, I calculated the conversion rate and costs per lead.

The result was a cost per lead of $9.99 and the lowest conversion rate of 0.3% that I could apply.

These numbers should also be taken with one or two grains of salt since it’s not yet that common to advertise real estate via native ads that often.

It would also be interesting to know how the quality of leads would turn out here.

The Real Estate Lead Cost of Text Message Marketing

With text message marketing, almost the same conditions apply to cold calling.

Most of the costs per lead depend on the hourly rate; you could also add your phone bill and the time cost to collect the phone numbers.

In the same article mentioned above, I calculated a cost per lead for text message marketing of $21.60 with a conversion rate of 16%.

The Real Estate Lead Cost of Done-for-You Real Estate Lead Generation Providers

I have already reviewed real estate marketing providers that, among other things, offer done-for-you real estate lead generation in different articles.

The mentioned providers are LeadPops, Street Text, Zurple, Ylopo, Offrs, and Chime.

Each of the links will take you to the respective review. In these articles, I calculated the following costs per real estate lead:

• LeadPops (lead generation on Facebook): $3.30 – $12.43
• LeadPops (lead generation on Google): $50 – $132
• Street Text: $75.24
• Zurple: $32.27
• Ylopo: $11.60-$14
• Offrs: $117.76
• Chime: $8.57 to $14

Is it a Good Idea to Focus on Costs per Lead?

At first, this might be a good idea.

But let’s take, for example, the average cost per lead from Facebook, which is between $46.53 and $77.48.

Do leads from Facebook have the same quality as leads from, let’s say, Google Ads that cost you $64.07?

I wouldn’t necessarily say so.

You have to work a lead from Facebook more often through a funnel to convert further into a customer who wants to do a showing than from a Google Ad if you target your audience with a buyer intent keyword such as ‘Houses for sale in New York.’

In the latter case, the potential customer is closer to ‘solution awareness‘ than the Facebook audience being more often in the ‘unawareness stage’ and interrupted by your campaign.

If you factor in the lead-to-closing ratio, it will paint a different picture.

The lead-to-closing ratio asks how many leads you need to close a real estate deal.

This data depends a lot on your sales skills.

What happens if you apply this to your marketing channels?

You may find out that a particular marketing channel that seems to have at first glance, high costs per lead turns out to be cheaper since the leads give you a better closing rate.

Should Realtors Buy Leads?

It’s not about the cost per lead but the quality of the lead or, even better, the lead-to-closing ratio, which heavily depends on your sales skills.

How does it help if you get a cost per lead down to, let’s say, 10 cents with a lead-to-closing ratio or closing rate of 0.002%?

You would basically have marketing costs of 10 cents divided by 0,002% equals $20,000 to close one deal with this ratio, or put in other words, a cost per sale of $20,000.

This would also mean that you had a sales problem.

With a $600,000 property giving you a full 5% commission, this would still mean a profit ($30,000-$20,000) of $10,000.

But things could get a bit ugly once you get into average housing prices and might even have to split a commission.

So in my humble opinion, the better question to ask would be:’ What’s the cost per sale for the marketing channels you use?

So should realtors buy leads?

Provided you have a well-oiled sales process and do not yet have your own working lead generation process, as a realtor, you may want to give it a try to buy leads for a limited time.

Remember, in (real estate) marketing, it’s all about testing.

Suppose you don’t yet have your own working lead generation process.

In that case, buying leads from different providers can be a great option to get real estate leads faster than going through the process of testing and improving real estate marketing campaigns across different channels for several months.

The important thing here is that you stay aware of the quality of the leads you are provided with, and they should at least be exclusive.

Before you conclude that the leads provided are bad quality, you may also want to take a critical look at your sales process, and whether it might be a sales problem you might have instead of being bad leads.

Therefore, your sales process and skills should be in good shape before testing this method, so you can exclude this factor right from the beginning as a possible cause for bad results.

If you can exclude sales as being the problem, I would move on to the next provider or real estate marketing method.

This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.

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Tobias Schnellbacher

Tobias is an internet entrepreneur with a passion for digital marketing and copywriting, particularly in the real estate sector. He also likes cats and fitness. For nine years, he operated an international online referral real estate agency serving U.S., Canadian, and German sellers and buyers, which resulted in multiple seven-figure property sales.Learn more

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