18 Essential Real Estate Lead Generation Statistics 2023
This article is part of a larger series on How to Become a Real Estate Agent.
Consistently finding and connecting with potential real estate clients is a necessary part of growing a real estate sales business. However, figuring out the best ways to generate and convert leads into clients can be confusing and overwhelming. To help you make wise decisions for your business, we’ve gathered 18 of the most relevant real estate lead generation statistics and lead conversion statistics—explaining what they mean for you as a real estate professional.
General Real Estate Lead Generation Statistics
All real estate agents and brokers should have strategies for lead generation as part of their business plans. Educating yourself on general real estate statistics will help formulate your strategy and guarantee that you’re making decisions based on success rates and targeting the correct audience.
1. 49% of agents spend $0 to $250 monthly on lead generation
Within the last 12 months, 24% of surveyed Realtors had spent less than $50 per month on real estate lead generation. In addition, 25% of agents—the largest group—reported spending between $50 and $250 per month over the last year. This data shows that the majority of real estate agents spend between $0 to $250 per month on generation efforts.
- On average, real estate agents spend a modest amount of money on lead generation. This suggests that the average real estate lead conversion rate from free or lost-cost strategies is significant enough to keep agents’ businesses growing.
- There is a wide variety of lead generation tools and strategies available, and it’s possible to generate leads for under $50 per month through free methods like referrals and social media marketing.
- Paid lead gen tools are also valuable and can boost your return on investment (ROI) by increasing the lead quality, automating marketing, and sometimes guaranteeing a certain amount of leads per month.
Choosing the right real estate lead source is an incredibly important decision. Make sure you consider the best places to buy real estate leads, like Market Leader. Market Leader is one of the few sources that provide exclusive leads as well as a variety of lead generation solutions like customizable websites, customer relationship management (CRM) software, automation, and a mobile app. With the agent platform, generate exclusive leads and have a marketing funnel up and running easily and quickly.
2. Referrals (62%) are the largest source of foreign real estate leads
The three most common ways that foreign real estate leads found agents in 2022 were referrals, personal contacts, or repeat business—creating a total of 62% of all foreign leads. The most common way to generate foreign real estate leads was through personal contacts, which was 28% of foreign buyers.
“Referrals from previous clients” was the second-highest method at 24%. Other agents connected with out-of-country leads through typical marketing methods like organic search, digital ads, open houses, and signs.
- If you find that a large part of your audience is from outside of the U.S., consider what real estate lead generation strategies would be most effective for them. In most cases, in-person marketing methods have a clear advantage over digital marketing efforts when generating and nurturing foreign real estate leads.
Pro tip: For more details about how to get real estate referrals, read our guide to 9 Ways to Get Real Estate Referrals & Grow Your Business.
3. 38% of homebuyers used an agent recommended to them
Of all the ways that potential buyers can find a real estate agent, 38% used an agent who was personally recommended to them by a friend, neighbor, or family member. When buyers are ready to start a real estate transaction, they prefer to get a recommendation from someone they trust.
- In an increasingly digital market, real estate is still heavily dependent on relationships, reputation, and networking.
- Establish a clear plan to consistently connect with your previous clients and ask for referrals.
- Consider sending a client gift to encourage referrals. Start with our list of ideas in 30 Fun Pop-by Ideas: Small Gifts for Your Real Estate Clients.
4. 63% of sellers found their agent through referrals or previous transactions
Generating real estate seller leads differs from buyer leads because sellers have already participated in at least one real estate transaction. Therefore, many homesellers have worked with an agent in the past, making them more likely to become repeat clients or sources of referrals.
This is likely why 63% of sellers find their agent from a previous transaction or a referral, while buyers often don’t have previous experience with an agent. In addition, 39% of 2022 homesellers worked with the same agent who helped them purchase their house. That statistic rises to 85% for sellers who purchased a home within 10 miles.
- Real estate lead conversion rates for past clients are significantly higher than the industry average.
- Each client is a valuable source of future lead generation and sales.
- Buyer clients may provide real estate referrals, and they are more likely to work with you on multiple transactions.
- The most powerful method of generating homeseller leads is through personal referrals and sphere of influence (SOI) marketing.
5. 67% of buyers & 82% of sellers only contacted one real estate agent
It’s recommended that homebuyers and homeowners meet with multiple real estate agents before starting their transaction, but real estate lead generation statistics show that this is not typically what happens. In reality, 67% of buyers interviewed only one agent, and 82% of sellers worked with the first agent they contacted.
With such a large majority of buyers and sellers choosing the first agent they meet, it shows that your first impression—regardless of whether it’s online or in-person—is key to closing a deal.
- Since most homebuyers and homesellers don’t interview more than one agent, you have the highest chance of converting a potential client if you meet them before other agents.
- Evaluate the kind of impression your online and in-person presence makes on potential leads, and adjust your marketing strategies so you can be the first (and last) agent that both buyers and sellers reach out to.
6. 89% of homebuyers & 85% of homesellers would recommend their real estate agent
Even though buying a house is a complicated process that often presents many unknown challenges, 89% of homebuyers in 2022 said that they would happily work with their real estate agent again or recommend them to others. In addition, a similar statistic shows that 85% of homesellers would also be happy to recommend their agents to others.
However, the National Association of Realtors (NAR) also reported that only 12% of buyers and 39% of sellers actually did work with their agents again when the opportunity arrived.
- The majority of Realtors are serving their clients well, but missing out on valuable opportunities for repeat clients.
- Agents don’t realize how easily their previous clients can lead to new business.
- It’s difficult to manage follow-ups manually, so real estate CRMs are vital.
The best real estate CRMs keep your contacts organized with pipelines and notes, and allow you to schedule and automate follow-up messages at specific times. LionDesk, a real estate CRM, even connects your contacts to a transaction management tool to streamline communication with clients before, during, and after their transactions. Try LionDesk free for 30 days.
Challenges of Generating Leads
Lead generation is arguably the most important element of any real estate career, but unfortunately, it doesn’t come easily. In fact, generating quality leads presents various challenges for real estate agents and marketers. It’s important to understand the biggest difficulties that agents experience when generating leads in order to create solutions and improve the success rate of real estate agents.
For more details about the challenges that new agents face and how to overcome them, read the Top 9 Reasons Why Real Estate Agents Fail.
7. About 37% of marketers struggle the most with generating high-quality leads
Out of all the challenges that come with generating leads, 37.1% of professionals in a variety of industries noted that consistently getting new, high-quality leads was the most difficult. Other notable difficulties include calculating return on investment (ROI) (31%), reaching the right audience (30%), understanding lead quality (25%), and determining the right marketing channels (14%).
Once you become a real estate agent, it takes time to learn about your audience and how to most successfully reach them. There are an endless number of options to find, generate, and nurture leads, but this data shows that it is not a black-and-white or plug-and-play tactic.
- Learning how to generate high-quality leads is challenging for real estate agents of all skill levels, so expect to invest your time, energy, and finances into various strategies before finding success. This process is vital to building a successful and long-term business.
To set yourself up for success, read our tips and tricks on the top 15 ways to generate real estate leads to discover strategies that can work for you.
8. Most difficult factor of lead generation: Conveying your value as a real estate agent
In a survey of U.S. marketing decision-makers, 35.4% said that the most difficult factor in generating quality leads is buyers misunderstanding the value of the offering. In addition, 25.6% of marketers reported challenges with their audience being unaware of their services, and another 25.3% noted that one-on-one outreach methods aren’t scalable.
Previous real estate lead generation statistics show that first impressions are a vital part of an agent’s ability to close new clients and sales. However, it can be difficult to communicate your entire offer online or the first time you meet someone in-person. In fact, if you don’t already have a clear understanding of your own unique selling proposition (USP), then it will be downright impossible.
With a clear USP, clarify your audience and your offer in a concise way and implement marketing strategies that appeal to your ideal clients. For example, instead of introducing yourself as a real estate agent, a clear USP helps you identify that you are an education-focused agent who assists buyers and sellers in getting the maximum profit out of their homes.
- Learning how to communicate your brand and how you stand out from other agents will have a massive impact on your lead generation conversion rates.
- To help you communicate effectively in person, learn how to create a successful real estate elevator pitch that can properly tell clients about your value as an agent.
If you don’t have a clear real estate brand that fits your USP and helps you attract a targeted audience, learn how in our guide to real estate branding.
Most Effective Lead Generation Strategies
With such an abundance of possible lead generation strategies, it can be tempting for agents to only focus on the strategies that seem easiest or are more comfortable to them. However, it’s necessary to be aware of what strategies are the most effective in the industry and actually move the needle to help agents find new leads and clients.
9. 46% of Realtors say social media is the top tech tool for generating leads
In a list of the top real estate marketing and lead generation tools, a massive 46% of Realtors reported that social media was the best source of high-quality real estate leads. Other lead sources like email marketing, digital ads, and content marketing are also effective, but have significantly lower real estate conversion rates.
- Social media is no longer just one of many options for generating leads—it is now a necessary marketing element for every agent.
- Social media is effective for targeting prospective clients, building rapport, and growing your real estate brand.
To learn more about how to maximize your social media strategies, review our article 15 Ways to Crush Your Real Estate Social Media Marketing.
10. 89% of Realtors use Facebook to generate leads
A whopping 89% of Realtors use Facebook to generate leads, making it easily the most-used social platform. Realtors use it for marketing their business and connecting with clients. The next-highest social media platforms were Instagram (59%) and LinkedIn (53%), which are still used by more than half of all agents.
The heavy use of Facebook is a sign that many potential real estate clients in every area of the U.S. are active on this platform. It’s wise to be active on Facebook so you can compete where most clients are, but you may also consider developing an audience where there is less real estate competition.
For example, only 12% of realtors are on TikTok, but it’s easy to find real estate agents and brokers who have large followings on this platform. If your target demographic uses TikTok and it fits your brand and personality, you might get the best results from a less commonly used social platform.
- Facebook is an ideal place for agents to begin marketing on social media.
- Create a variety of real estate Facebook posts and present clear avenues to connect with local buyers.
- Repurpose content to fit other platforms to multiply your reach.
If you need support to start marketing on Facebook, read the top ways to generate real estate leads on Facebook.
11. 40% of marketers note the importance of individual outreach
When real estate professionals think about the most effective methods of generating quality leads that result in sales, the number one method was one-to-one outreach at 40.6%. Closely following, 37.6% noted that the key to their success came from addressing their client’s challenges head-on. Notably, brand visibility and paid media campaigns were also highly rated as important factors for lead generation success.
- Relationships are still key to real estate success.
- One-on-one outreach is considered the most effective way of generating and converting new leads.
- In an increasingly digital industry, it’s necessary for realtors to build a reputation online without losing the ability or habit of connecting individually with leads.
12. Zillow is the #1 most visited real estate website
Zillow has been the most popular real estate website for a number of years, and that is continuing in 2023. Exact estimates of Zillow’s traffic vary, but ranges of their traffic in January 2023 range from 89 million to 300 million. Other estimations say that Zillow receives an average of 60 million visits each month. In addition, one of the other top-ranked real estate platforms is Trulia, which is owned by Zillow.
This is extremely important information for real estate professionals, especially since Zillow provides opportunities for real estate agents to take advantage of this traffic for their business as a Zillow Premier Agent.
- When compared to every other marketing tool, online real estate platforms generate the highest amount of traffic.
- Successful agents should consider how they can leverage the massive popularity of platforms like Zillow and Trulia to grow their business more efficiently. Read our full review of Zillow Premier Agent to learn more.
Since Zillow is a pillar of the modern real estate world as well as a real estate lead generation tool for agents, consider becoming a Premier Agent. Leveraging existing Zillow traffic into quality leads is a powerful way to grow your business. In addition, by being a Premier Agent, you can post your listings on Zillow or be featured on other listings to draw in potential buyer leads.
Real Estate Lead Conversion Statistics
Generating real estate leads is the first part of the process of gaining new leads, but they actually need to convert into clients in order to grow your business. It’s important to recognize that every lead generation strategy has different levels of effectiveness, so you must continue tracking and evaluating your real estate prospecting conversion rates. Read on to learn more about the average real estate lead conversion rates.
13. The average conversion rate in real estate is 2.4%
Real estate lead conversion statistics can range wildly, but Ruler Analytics found that the average conversion rate in the real estate industry is 2.4%. Real estate transactions are one of the biggest financial decisions and processes that your clients make, so the process of building trust and forming relationships is particularly important and time-consuming.
- Larger transactions like real estate purchases are expected to have a longer nurturing process.
- Although the average conversion rates in the real estate industry appear low, conversion rates in all industries are generally between 1.8% and 4.6%.
- Conversion rates can range massively, so test different methods and strategies to find what is most effective for your audience.
14. Real estate conversion rates range from 1.7% to 3.5%
An in-depth marketing study by Ruler Analytics shows the average real estate internet lead conversion rates based on a variety of common marketing strategies. These include:
- Email: 3.5%
- Referrals: 2.7%
- Organic search: 2.2%
- Paid search: 2%
- Call: 1.7%
- Form: 0.6%
These statistics can help form your strategies for generating, nurturing, and converting leads. However, keep in mind that real estate lead conversion rates can vary slightly depending on different factors like the source, number of agents surveyed, and the time of year. For example, a different study shows that the average conversion rate for online real estate leads through paid search in 2022 was 3.52%.
- Keep track of your lead conversion rates to help you determine if your strategies are effective or in need of improvement.
- Version rates will depend on your effort, audience, and individual marketing strategies.
Measuring your average real estate lead conversion rates against industry standards can help you make the best marketing decisions. If you don’t currently keep track of your contacts and conversions, make sure you use a marketing tool like HubSpot that can help you generate accurate conversion rates. HubSpot automatically generates visual charts and reports to help you understand your progress on multiple communication channels.
15. 61.7% of buyers who search online convert over the phone
Within each lead generation strategy, there are additional tools and strategies that will impact your results. Organic search and paid ads drive 57% of all website visitors, but only a small percentage of visitors translate into leads or clients.
In fact, an interesting study found that 61.7% of homebuyers who searched online ended up becoming clients over the phone—quite an increase from the average conversion rate of organic search alone (3.2%). It’s clear that a personal, one-on-one connection in combination with search engine optimization (SEO) is much more effective than either method individually.
- A complete marketing strategy will be significantly more effective than an individual lead generation strategy or tool on its own.
- When you combine multiple strategies like organic search and one-on-one phone calls, you can multiply your conversion rates.
Return on Investment (ROI) for Lead Generation
As you invest in real estate lead generation, it’s important to evaluate your expenses and profits in order to maintain and increase profitability as you grow. However, you will find that calculating exact ROI is difficult since there are an unlimited number of factors that affect an agent’s ROI. Although there is limited data about ROI, here are a few of the most important lead generation and conversion statistics to help you improve profits.
16. The average cost per lead from paid search is $44.70
The average cost per lead (CPL) for paid search in real estate is $44.70. Calculating your average cost per lead in real estate is important because it breaks down your total costs and income to show you exactly how much you are paying for each lead. Having this calculation can help you minimize your spending and maximize your income.
- Investing in lead generation can involve a combination of time, effort, and money.
- In order to get the maximum number of leads, clients, and income, you should know your CPL and learn how to minimize it.
17. Referred clients have a higher lifetime value by 25%
Every real estate client has the potential to become a repeat client and provide future referrals for the agent. However, when a new client is referred by someone they trust, they increase your profit margin by 25%. You save money on advertising and marketing, and you increase the chances of having a client who will continue to refer you without additional ad spend.
- Real estate referrals are the most likely to become loyal, long-term customers.
- Referrals from a trusted friend, family member, or colleague require less effort to convert into clients.
- Referred leads and clients are more valuable over time than leads from other sources.
18. New clients cost 6-7 times more than existing clients
Even though a few real estate lead conversion statistics above show that referrals don’t always drive the highest conversion rates, it costs six to seven times more to get new clients than it costs to retain existing ones. Since referred clients are typically more profitable and since a large majority of real estate transactions come from personal connections, it’s clear that the fastest way to maximize your ROI is through referrals.
- Successful real estate agents often generate a majority of their income from referrals alone.
- Real estate referrals are one of the most important pieces of a successful business because they naturally compound to generate more leads and more profit.
Generating leads for your real estate business is essential to earning money and growing your business. There are various ways to successfully generate, nurture, and convert leads, like social media, organic search, referrals, and networking. While there is no cut-and-dry method to grow your business or know exactly what will work best for your audience, you should use real estate lead generation statistics to inform your decisions and help you find success more quickly.