Real Estate Agent with Douglas Elliman Real Estate 30HA0800896


This post is short--to the point and meant to wake up those who still think that paying for leads is an acceptable practice:

QUESTION: What is wrong with paying money to get leads? Why not take advantage, in my marketing plan to pay more money than the competition to get all the phone calls? Why not sign up to appear as a face on a national website? I will surely make more money than the next guy, right?

ANSWER: That is the objective!! That is how those listing platforms get the big $$!! By forsaking the idea of becoming the most informed agent by reaching out to those homeowners and buyers who want a local expert (or at least an informed agent!) "why not just sit back and let all those goodies come to me by paying big $$ for it?" 

That THINKING is undermining the very reason for our existence. 

It informs the public that we are not really good people or professionals looking to serve the public for the better good! It tells them that those "creepy agents" are only interested in their commissions! Can't you see that??? Why is this so hard to understand? The whole concept of "Pay to Play" came about through the workings of a crooked way of thinking--and it is our doom!

You need to understand the reason why we are licensed--We have a duty to fairness in dealing with the public and fiduciary responsibility to our clients. It is that simple. If we are "Paying to Play" in real estate, we forgo all of the non-technical interaction with the public and we become just another "face" in a sea of unfamiliar people who are trying to "out-pay" our competition TO GET BIGGER COMMISSIONS! As licensed real estate professionals we are quickly becoming a dying breed---and deservedly so!

Who would hire such a person??? 



Comments (30)

Liz and Bill Spear
RE/MAX Alliance 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Alliance Cincinnati & Dayton suburbs

Long response deleted. 

May 18, 2019 06:08 AM
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

I appreciate your passion about this topic and agree with the basic premise. In our market, many of the new hotshots in the market have been around less than 5 years, and brag about their leads and business volume. They claim Zillow works ( it must for them?) and I do see their fresh little faces all over it. In fact, I had one arrogant little twerp ask me how many transactions I close a year - when I replied, his response was "is that all?"  I explained that we actually limit our business as we offer a very high level of service to our clients.  Bla bla bla. Honey badger didn't give a s&@#.

May 18, 2019 07:15 AM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Hi Debb: That is so funny! I find the same thing here--however, those shiny faces no longer have the smile that used to accompany the eager response--now it is tears for all the money spent on Z during one of the slowest markets in memory!! You can't MAKE a buyer buy a house!! You can pay big $$ all day long but as you well know, in a down market very little sells--unless you have a following of loyal buyers and sellers who know you well and respect you enough to continue using your valuable services! Thanks for sharing your experience! 

May 18, 2019 07:37 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I’ve seen this happen before and it’s good to be able to adapt and handle it as you can in the moment

May 18, 2019 11:19 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Paula Hathaway, REALTOR, LBA We all get in that place where that can happen but it’s all the adaptability.

May 18, 2019 11:20 PM
Ken Jones
Kenneth J. Jones, Inc. - Toms River, NJ

Paula Hathaway, REALTOR, LBA I've been preaching your argument for many, many years.

But, I've found that there are a FAR greater numbers of greedy real estate agents than those who take their role as professionals seriously.

This is why the residential real estate brokerage industry is doomed to become virtually extinct within the next 5+/- years.

Yes. There will ALWAYS be those who will need a professional real estate agent. But, those numbers are shrinking and they're shrinking rapidly.

So, when I say the residential brokerage business will become "virtually extinct," what I mean is that the number of active, productive agents will be cut by more than 1/2 their current numbers.

May 19, 2019 05:41 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Paying for leads somehow reminds me of the bounty hunters of the wild west who were not very well received but tolerated...Money driven dynamics? COLD

May 19, 2019 06:51 AM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Hi Laura: "Adapt" or be left behind--Is that your suggestion? I don't agree, Laura. Adapting is one thing but to intentionally continue to "Pay to Play" is downright suicidal, IMHO...We are a good example of that right here in the Hamptons. There is just a handful who continue to pay--those agents are now in the position of paying thousands a month (Some say $6K) and they are not making any money--they haven't made any substantial income for months now and we don't know for how much longer this downturn will last....You tell me what is going to happen to them. Meanwhile, Z is contacting the same clients and customers directly. I liken it to a retailer who is loyally carrying a line of clothing while the clothing manufacturer is out there undercutting the retailer online....It never lasts! Someone is getting hurt and it isn't the manufacturer! Thanks for opening up the conversation....

May 19, 2019 08:01 AM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Hi Ken: I totally agree--the agents who survive will be the ones who, with nose to the grindstone, continue to plug away and continue to work hard to get listings and to attract buyers...The others will "Pay to Play" until they go bankrupt or until they get other jobs! There is no way this business can be sustained the way they are going...I also agree that brokerages will be out of business in 5-6, years if it even takes that long! thanks for your valuable input here!

May 19, 2019 08:06 AM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Richie: You are so accurate in your analogy! This is a dog eat dog business anyway--to add to that the likes of the big Z and you have a predictable demise...of someone! Here, it is the agent; next, it is the agency! After that, there will be calm in the street with dead bodies lining the thoroughfare! I can guarantee those bodies are not from Z, T or even R! "The Loss of (not-so) Innocence"

May 19, 2019 08:11 AM
Richie Alan Naggar

I continue to enjoy you dear Paula

May 19, 2019 02:14 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I agree with your views on this 100%, Paula!  By paying to play, we are feeding the beast!

May 19, 2019 10:40 AM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Myrl: You can say that again! Feeding that beast is the thing that has always gotten to me--it is such a good analogy yet those who do pay look the other way when it is mentioned! I do have a few agents who have come to me to tell me that they have stopped paying and it is the higher paying agents as well...they get "it"...


May 20, 2019 08:34 AM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Not an association we want as Premiere, Featured yadda yadda from the same folks who change the "valuations" daily...sigh

May 20, 2019 03:47 PM
Michael Eisenberg
eXp Realty - Bellingham, WA
Bellingham Real Estate Guy

Some win, some lose, Some people will work with the first agent to call them. Some of those paying Zillow the most are making a very good living, others not so much.


May 20, 2019 05:23 PM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Hi Sally and David: Thanks for reading and commenting here...Some people will never get that they are destroying our reputation by continuing to pay the beast...those are the ones who will one day wake up without a source of income and feel so sad that they shelled out the fortune to the one who destroyed their livelihood! They are literally paying them to do it!

May 20, 2019 05:58 PM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Michael: Sorry to say that here in this market I am watching as agents lose their houses and fall into poverty...either that or they are leaving for a paying job, having given up the ghost..leaving a shambles behind them--those are the agents who only paid for leads--never learned the research necessary to get the leads on their own. It's like a child who was never given the chance to learn things on their own--always had a parent who stepped in and bailed them out of everything! Such a shame but they have brought it upon themselves...I swear I am witnessing a new effort for agents who have never figured out how to determine the market value of a property or learned how to figure out setbacks and lot coverage etc, suddenly taking a new interest and needing guidance to do it right...SAD! These same agents paid for years, as newbies, for their leads and took the Z estimates as gospel--sold their clients down the river, because I swear, those houses that they sold at the distorted higher prices now sit--the owners can't afford to maintain them and the price they paid will come back to even only after another 10 years or so...it is nuts here! Prices have come down 20-30-% and they STILL sit! 

May 20, 2019 06:08 PM
John Van Hogen
Keller Williams Realty Professionals - Hillsboro, OR
Serving Sellers / Buyers / Investors 503-680-9390

My career before real estate was in office supplies, both commercial and retail. In the 90's we began to see the arrival of the "category killers," such as Office Depot, Office Max, and Staples. Their model was raise investor capitol, underprice the competition, which drove their competition out of business. With huge market share and competition gone, prices were raised back up.

Similar to Amazon, who showed no profit for years and years. Use investor capitol to expand rapidly and cover your loses. Don't make money at first, just grow fast and big. The one with the most market share wins and this massive size stops potential competitors from entering the market.  

Sounds like just like Zillow right? Leverage investor capitol, grab all the market share (monthly visitors) you can while losing money. Once you buy up/scare off competitors and dominate the market, well, you can call the shots. 

Your passion is evident and appreciated Paula. The brokerage model and our industry is on the cusp much, much more (and accelerating) change.  


May 21, 2019 05:00 PM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Hi John: You gave me quite a chill--Yes it does sound just like Zillow!! The fact that I have been saying this to the real estate community since the beginning is the worst part for me because NO ONE listened to me! I did not get my point across and that is killing me! I have been blogging and telling the real estate market nationwide what was coming--how did I know? Because they made that their mission statement---"To put all brokerages out of business"...No hiding the fact--it was stated up front as they opened in 2007--as they sold off EXPEDIA to the highest bidder, making their fortune that put them in the position to do just what they are doing today! It is the scariest thing I have ever witnessed! Thank you so much for your valuable input here, John. I totally agree that we are on the cusp and it is not comfortable--I speak to my fellow agents every day and it is amazing how they respond--some shrug it off (those are the ones addicted to the lead generating machine that just kicks out fake leads, garbage that makes it LOOK like they are giving you what you paid for; but it really isn't!) and some are as incensed as I am....but it is now just so much noise--meaning nothing! I am afraid it is too late--we need to put our thinking caps on because I truly believe that Z will get its comeuppance in the end and will fade away because of inadequate knowledge. We have to be ready--our companies must change course and design local-focused, agent focused branding that cannot compete with Z and R and any other listing platform bent on destroying something as complex as real estate transactions...!!

May 21, 2019 06:49 PM
John Van Hogen

Timely headline from yesterday:

Best friends 4ever? Redfin strikes deal with Zillow to list in 4 cities.

The long-time rivals partner on deal that affects Redfin listings in Seattle, Charlotte, Des Moines and Nashville


Backstory: In March, a trial partnership between Redfin (never shown a profit) and RE/MAX was announced, with Redfin marketing to consumers in few cities and supplying leads to RE/MAX. Many predicted this would lead to RE/MAX buying Redfin eventually. Subsequent to that, Redfin announced buyers could now submit offers for Redfin's iBuyer properties directly on the site, eliminating the buyer's agent/broker. Naturally, RE/MAX wasted no time in severing that trial partnership.

Now yesterday's news...take a guess how this new trial program is likely to end.    

May 22, 2019 01:02 PM
Renae Bolton
Marketing 4 Realtors - Garfield Heights, OH
I'm your Professional Real Estate Marketing VA!

From someone on the outside looking in, and as a Virtual Assistant who has worked with many real estate professionals, I think the issue is that many agents don't feel they have the time or expertise to adequately market themselves, their knowledge, or their experience. As such, many agents feel that their best bet is to pay for lead generation. There are much better ways to spend your money on marketing your business!

May 23, 2019 10:27 AM
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Hi Renae: I have found that there are 2 types of agents who buy leads:

  • Newbies, just to get their phone to ring and
  • established agents who think they are missing out on business and are too lazy to do the hard work.
  • Just MHO

Thanks for reading and commenting!

May 23, 2019 10:56 AM