For real estate agents, online leads and advertising that ultimately result in a transaction can be elusive and difficult to find.

For today’s real estate professionals, lead generation is the most important aspect of their business.

According to the National Association of Realtors, the return on investment for online ad spending is negative 32 percent. All told, the real estate industry spends $8.9 billion to generate $6.1 billion in online lead revenue.

Less than a decade ago, in 2007, the return on investment was in the black at 38.5 percent. The sector spent $2.6 billion to generate online lead revenue of $3.6 billion.

From Day 1 in a real estate career, agents get plenty of advice on the best way to generate leads for their business.

Lead generation is not passive.

“The fantasy is that you can buy your way into prosperity or you can market your way into prosperity,” said noted real estate coach Tim Harris.

Harris said that passive lead systems rarely work. When they do, they don’t work consistently.

An agent’s NO. 1 job is to generate new business, making lead generation a top priority.

“I wish they would teach this the first day that you step into real estate school,” said real estate coach Julie Harris.

Agent websites can be linked to portals such as, which can generate leads. However, the purchased leads must be combed through to build a client database. These sites, including Zillow and Trulia, are connected to a meta search portal like Kayak.

It can be a challenge for agents today to have the resources and funds to not only generate leads, but also convert them.

“Leads have to be fully prequalified,” Tim Harris said. “You have to know the buyers’ and the sellers’ motivation. A lead by itself has no value. A prequalified lead when you know their motivations has tremendous value.”

This doesn’t always mean that you have to spend money on leads. Agents can use search function on social media sites like Facebook, Instagram, Twitter and LinkedIn to search for life events like “new job,” “buying a home,” and “selling a home.”

This can help agents who may be in need of a real estate professional in their area. This small step costs nothing and can pay off with potential leads that require no money spent on ads.

Julie Harris notes that when you are calling leads, it is important to have a prepared script.

“If you are not using a script, that is the first issue,” she said. “Why, if you have the challenges that are normal, why would you throw fuel on that fire if you are not converting what is coming in?”

Paying a third party to mine your leads may be like throwing money out the door.

“They charge you a ridiculous fee to prospect your FSBOs and expireds for you and supposedly set up listing appointments,” Tim Harris said. “The question is, why wouldn’t you do this yourself?”

Companies like this come and go. It has happened for years and Tim Harris urges agents to avoid this.

“You have to learn to do what you don’t want to do when you don’t want to do it,” he explained.

Ultimately, when buying leads the challenge is determining how many impressions you’re getting for your money and getting exclusivity on a ZIP code is nearly impossible today.

Competing with a number of agents in a ZIP code can mean that you could receive a small percentage of the leads. This means that your chance of success is minimal for your investment.

Moreover, the return on investment can vary form ZIP code to ZIP code.

Ultimately, online lead generation can only work if you invest the time to make sound decisions and review your options.

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