Real estate leads pay at closing offer the allure of deferred payments until you close a property transaction.

Yet, these deals come with their own set of risks.

But you can mitigate them to a degree.


1) Increased Costs and Fees

Companies offering pay-at-closing leads often want a hefty share of your commission, ranging from 25% to 50%.

This can eat into your profits.

Mitigation: Don’t rely only on these providers for your lead generation

Besides pay-at-closing companies, there are other options available. 

It’s lead generation methods such as door knocking, social media marketing, cold calls, emails, video marketing, blogs, and podcasts.


2) Follow-Up Commissions

There’s a possibility of having to pay commissions on repeat customers introduced by the lead company.

Mitigation: You want to understand and negotiate the terms of follow-up commissions. 

Ensure you’re aware of any long-term financial commitments you’re entering into with the lead company.


3) Pressure to Close

Pay-at-closing arrangements can create a high-pressure environment. 


You have the usual pressure to close, but on top of that, you often need to maintain your closing rate to stay in the partnership.

Mitigation: You want to focus on enhancing your closing skills and client relationships.

Also, diversify, as earlier mentioned, your lead sources so you don’t depend on the companies.

And you want to be picky about the lead quality.

Because poor lead quality is in conflict with protecting your closing rate.


4) Lead Quality Concerns

The quality of leads provided by pay at closing companies can be pretty variable.

I have already analyzed this in my article

They often lean more toward poorer quality.

Also, leads may not always be exclusive. This means many agents might be working on the same leads.

Mitigation: Develop a robust lead qualification process. It’s to identify high-potential leads early on. 

And again, diversify lead sources to reduce reliance on any single provider.


5) Impact on Business Reputation

What happens when the pay at closing providers lead generation practices are questionable?

Well, in that case, it could impact your agent’s professional reputation.

The client may associate their practices with your business.

Mitigation: You want to vet lead providers for ethical practices and reliability. 

And you want to maintain high professional standards in all transactions.

Also, seek client feedback.

This enables you to address any concerns to protect your professional reputation.


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

Tobias Schnellbacher