January 26


Generate Leads – Stop Buying Them

By Ken Jones

January 26, 2021

buy leads, buyers, free, generate leads, leads, listings, real estate, real estate agent, sellers, tenants

The need to generate leads is fundamental to the success of every real estate agent, as it is for people in all other types of sales businesses.

Because I'm in the business of helping real estate agents build and grow their business, an essential part of my service is to help them generate a continual flow of high-quality leads over which they have total control and without wasting thousands of dollars.

By the way, this is a totally free service that I provide to help real estate agents.

If you prefer, you can listen to this on my podcast, the Ken Jones Real Estate Show.

generate leads

The number one topic of discussion among the agents I help is lead generation. And, the number one question in topic of discussion is, "Which lead referral service do you think should I buy?" And, these are my thoughts on buying leads.


I know people who are paying thousands of dollars A MONTH buying leads; that's insane. In addition to spending (and, wasting) piles of money, there are several other problems that result from buying leads.

While they're getting leads from some of these referral services, a significant number of those referrals don't turn into transactions. And, at the end of the year, the agents who work the hardest after buying leads just about break even. Let me explain the three primary reasons for this poor outcome.

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The first reason agents who buy leads frequently do so poorly, is because many of these leads are stale, meaning they're old and those people already bought or sold, or they've moved on and are working with other agents they met through other sources.

The second reason is that many of these alleged leads, particularly those who say they're interested in selling their property, are merely shopping price. In other words, they're looking for the agent who's going to give them a dirt-cheap commission rate. These are the worst of all because they're buying price, not quality of service.

And, the third reason is, that the agents who buy these referrals can only handle so many people at one time. Consequently, there's only so much time in each day to provide the level of service necessary to create a real estate transaction. This means some leads that were paid for don't get serviced and those people move on to a different agent, assuming they were serious in the first place.

Even agents who have team members find that the time demands - particularly for buyers - is so great, that they simply cannot work enough hours to make as many transactions that are necessary to make any meaningful profit on the money they're paying for those leads.

generate leads

The History of Why Agents Buy Leads

To understand why so many real estate agents waste so much money buying leads when they can generate their own higher quality leads at a tiny fraction of the cost of buying them, we have understand the events that created this mindset.

Back in 1971, when I first started selling real estate, real estate agents were faceless soldiers. They worked for real estate brokerage companies, and those brokerage companies were the kings.

It was the company's identity that was advertised, not the agent's identity. It was the company's identity that was the only identity on lawn signs. The agent's name was never on the signs, not even on sign riders. Real estate agents didn't have their picture on the business card; the company logo was the dominant feature on the business card and the agent's name was in very small print; some were even typed into a blank space.

As for marketing, very few real estate agents even knew the definition of the word. Consequently, there was no such thing as agents doing any type of marketing, such as direct mail marketing. Hell, even the brokerage companies didn't do direct mail marketing at that time.

There was no such thing as the Internet, thus, there were no websites, no Facebook, no Twitter, no LinkedIn, etc. Cell phones and fax machines didn't exist, and many real estate companies didn't even have a photocopy machine. In fact, "homes" magazines weren't available in most places at that time.

In those days, and through the mid to late 1980s (depending on location), newspaper advertising was the primary, if not the sole source of marketing and advertising for most real estate brokerage companies, and real estate agents were not involved.

By now, you're probably wondering how real estate agents got leads at that time.

Well, it was the company that would generate leads for the agents and that was done almost exclusively through newspaper ads. To get leads, each agent would sit in their company's office at their appointed times to answer the phone calls from the leads that were generated by the company's newspaper ads.

Another source of leads in those days was from the "walk-in." A walk-in lead people who saw a newspaper ad or rode past a house with a lawn sign, and decided to go to the real estate agency office to find out more about the house. The walk-in lead was very common through the early to mid 1990s.

generate leads

And, because real estate agents were a dime-a-dozen and were commonly used by the companies as taxi drivers and order-takers, most agents were never trained to do anything. In fact, not only were agents not trained, most were actively discouraged from advancing their knowledge by real estate companies whose owners feared that agents would leave and become competitors.

So, the lack of training became engrained in the culture of the real estate agent because the company did everything for the agents, so agents became convinced they didn't need to know anything, especially about marketing and advertising to generate leads.

Lawsuits & 100% Commission Companies

Until the mid 1980s, all real estate agents were "seller" agents; there was no such thing as a "buyer's agent." Then, after a flurry of major lawsuit wins by buyers who claimed that agents and their companies committed fraud because they - the buyers - believed the agents were acting on their behalf, not as the seller's agent, the relationship between the brokerage company and their agents began to change.

But, those lawsuits, as influential as they were, weren't the only motivating factor that changed the broker/agent relationship. It was also the rise of the so-called "100% agency," namely RE/MAX and Realty Executives. More specifically, it was the business model of these 100% companies which empowered their agents to act as their own business entity that had the greater impact on the evolution of the broker/agent relationship as it currently exists.

The changes brought about by these new 100% agency companies changed the industry. Instead of the company providing all the services and sharing the commission with the agent, these 100% companies now required their agents to pay a monthly fee to the company to be associated with that company, and in exchange, the company would allow the agent to keep 100% of every commission the agent generated. However, the agent was also now responsible to provide and pay for all of their own services.

The business model of these 100% companies also allowed their agents to put their picture on their business cards, put their name and photo on their lawn signs, and put their own phone number (which was actually a pager number at the time) on their business cards and lawn signs. But, the most significant of all of the changes brought about by the 100% agency, was that the agent - not the company - was now responsible to do all of their own marketing and advertising to generate leads.

The agents in these 100% companies ultimately started to capture a larger and larger share of the market. This got the attention of the traditional real estate agencies which began to see the need to cut their expenses. So, these traditional companies began to emulate the 100% companies by encouraging their agents to take on more responsibilities, including the responsibility for marketing and adverting and promoting themselves in order to generate leads.

But, there was one major problem ... almost none of these agents (including the agents in the 100% companies) knew anything about how to market to generate leads because they were never taught.

And, because there were so many real estate agents that didn't how to generate leads, they became easy prey for the snake oil salesmen who sold them useless "marketing tools" like scripts and phone calling equipment and services.

After that, they sold them lists of phone numbers, then moved onto selling lists of email addresses, and more scripts followed by some other new shiny flimflam gimmick.

And, when private companies got the right to access to the database of the multiple listing services (MLS) from the National Association of REALTORS®, these hucksters decided to advertise the listings in the MLS; the same listings that were generated by real estate agents. Then, those companies would sell the leads they generated from advertising the agent's own listings, and SELL THOSE LEADS BACK TO THE REAL ESTATE AGENTS!

So, real estate agents who spent their money to get listings, and spent their money to join the National Association of REALTORS® now had some non-real estate company advertise THEIR listings, then sell the leads generated by advertising the agent's listings back to the agents who generated the listings in the first place.

And, what's worse, is their are so many real estate agents who actually PAY THOUSANDS OF DOLLARS A MONTH TO THIRD PARTY COMPANIES to get the leads being generated by their own listings.

An Example of Self Lead Generation 

I opened my real estate agency in January 1978. I had been a top producing real estate agent for 7 years and worked for a couple of the best (and, a few of the worst) real estate agencies in New Jersey.

In addition to being a high-producing agent, I also took time to learn marketing and advertising over the years. And, yes. There is a difference between marketing and advertising.

And, because I created an aggressive marketing strategy and a unique style of advertising, I was able to grow my company from a 1-man-band to nearly 30 agents in less than 18 months.

My Original Logo - 1978

It's important to know, that my agency did not belong to a multiple listing service ... because we didn't need them.

I made this fact the centerpiece of my overall marketing strategy and made it a point to emphasize that my firm worked harder for our sellers because we were an EXCLUSIVE BROKER and didn't rely on other agencies to do our job.

My marketing and advertising helped me to personally list about 100 properties a year, most of which were sold in an average of 16 days over a 4 year period. In fact, I was famous for ads that showed how quickly we sold homes, saying "SOLD IN 1-DAY," "SOLD IN 5-DAYS" in bold print superimposed over the original ad for the property.

In fact, the classified ads I created won the Best Classified Advertising in New Jersey award from the New Jersey Press Association for several consecutive years.

In addition to my award-winning classified advertising, my list of marketing strategies included my "SOLD IN 1-DAY" newspaper ads, using photographs in our ads and brochures (a first in central New Jersey), a direct mail system marketing to about 5,000 homes every 8 weeks (the first in central New Jersey), radio marketing ads which dramatically widened our market area (the first in New Jersey), a few strategically placed billboards, a variety of listing packages, and several give-away trinkets that included key rings, pens, matchbook covers (most people smoked cigarettes in those days), etc.

All of these marketing methods worked in concert to generate a continual flow of leads that kept my firm in the top 3 sales producing real estate agencies in our market area.

I now call this method my Multi-Synchronous Marketing System.

generate leads

First Best Advertising Award - April 1979

Since 1978 when I started my real estate agency and achieved such amazing success with my Multi-Synchronous Marketing System, the only thing that's changed is that there are many more types of communication tools available to today's real estate agent.

The Problems with Buying Leads

Above all, you really have to understand that real estate agents are small, independent business people. And, the primary purpose - and, in my opinion, the only purpose - of any business, is to make as much profit as possible (legally, of course).

And, as a small, independent business operator, in order to make as much profit as possible, you have to stop wasting your money, ESPECIALLY on things you can do for yourself - like to generate leads instead of buying them.

Most agents don't realize, there are other problems associated with buying leads in addition to wasting their money.

First, when you buy leads, you're placing the success of your business in the hands of someone else. That means, other people, who you don't know and who don't know your - and who don't care anything about you, have total control of the amount of money that you can possibly make. They control what leads you get, what leads you DON'T get, how many leads you get, how much you're going to pay to get those leads, when THEY think you've reached your quota for leads in a given geographic location, and when you've reached your quota of leads for a given time period.


I'm not even going to discus the QUALITY of the leads you're paying for, or how many other suckers are paying the same people to get the same lead that you're getting.

And, what happens when 2 agents get the same lead (which is not at all uncommon)?

Let's say you and another agent get the same seller lead, or let's say you are the only agent to get a lead from the company you're buying leads from. And, let's also say, that lead has a friend or a relative that's a real estate agent. What typically happens is you're now in a price war with that other agent to see who's going to charge the lowest commission to get that listing.

And, if you're buying leads, you probably really need that listing to get money to help you pay for the leads you bought that didn't pan out. So, you're going to cut your commission to the bone. Why? So you can get more leads who are people who don't know anything about you, don't know that you're probably going to do a far better job for them than most other agents, leads of people who are only interested in how low your commission is.

Are these the kinds of leads you're going to try to build your business on?

Because, if you're willing to pay a pile of money to some stranger to get leads who are also strangers and only care how low your price is, people you're going to work yourself into the ground for to earn peanuts, you're not going to last, because you're either going to go broke, or you're going to burn out, or do both.

generate leads

Only 3 Types of Agents Buy Leads

There are typically 3 types of real estate agents that buy leads.

The first is the new agent who doesn't know any better.

The second is the lazy agent who would rather spend their money than do anything for themselves.

And, the third type is the agent who's trying to build a future, but was never taught and never took the time to learn how to generate their own leads. This also includes agents who think they can't generate leads for themselves because they think they either don't have the talent, or they think it'll cost even more money to generate their own leads than it's costing them to buy leads.

If you're a real estate agent in either the first or third group, believe me when I tell you that you definitely can learn to generate your own continual supply of high-quality leads. In fact, I'll teach you how to use my Multi-Synchronous Marketing System - TOTALLY FOR FREE - no gimmicks, no nonsense.

I'll teach you how to create your own multi-synchronous marketing system that will generate a continual flow of high-quality leads. I'm not talking about generating tire kickers. I'm talking about generating high-quality leads; people who are actually ready to sell or buy.

And, best of all, is that the leads I'll teach you how to generate are going to be people who already know who you are. They already know about the quality of your services, and they're not simply looking for just any agent with the lowest commission.

If You Want to Build a Future ...

If you're serious about building a financially rewarding business and personally rewarding career as a real estate sales professional, contact me right now, and let me show you how to build your own Multi-Synchronous Marketing System. And, I won't charge you a penny.

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