When I was getting re-certified to teach the National Association of Realtor's Accredited Buyer Representation Course (ABR), I was surprised to learn that there were 4 times the amount of real estate leads sold in 2014 than there were closings!
Some lead generation companies have even told me directly that I can offset my costs of doing business with them by reselling the leads to other websites. (if you actually read the Terms of Service agreements on the websites, that practice is usually prohibited). Some want me to upload my client data base of open house rosters, dead leads, etc., so the can use my list to sell to other agents and if anyone else closes the transaction, I am told that I would get paid a referral fee.
If you do sign up as an agent with some of these companies, they expect you to pay a fee to them even if your previous client ends up clicking a link on their website generating a "lead". At least here in Idaho, it is illegal to charge after the fact referral fees that some of these companies and relocation companies try to charge.
It does make me wonder though, what happens if a Realtor is signed up with several websites that each expect a ____% referral fee upon closing? Are you supposed to pay each online referral company their stated fees? (according to most of them, YES).
I think the first real estate lead generation company I ever signed up with was HomeGain. It was a great program at the time and I was pleased to become the top closing agent for them in the state of Idaho. Then, they kept raising their referral fees and started separating out leads to sell different ways. The year after I was awarded the Top Agent in Idaho, I quit accepting their leads altogether since they got too expensive and while the quality was dropping. Now, REPLY Inc., has acquired HomeGain and that era is coming to a close.
Be careful of some of the internet lead generation companies out there because their business model may be illegal in your state. For example, in Idaho, it is illegal to pay "bird dog fees" or referral fees to anyone other than to another licensed real estate broker. All the companies that typically want to sell leads for $25 - $100 each to someone other than a licensed Broker is illegal yet the practice is rampant because they say "well every else does it".
Therefore, I hope a class action attorney reads this blog. When something is illegal and they hear the words "Well everyone else does it!", you need to hand them a bib because they start drooling over the potential case ahead.
Comments (10)Subscribe to CommentsComment