Brokers, do you know where your agents’ referrals are coming from?
McClelland said his research has found that over 30% of buy-side deals came from leads agents paid for from third-party referral companies.
“I tell brokerage companies, if you’re going to run a study on your firm, that’s one of the studies you need to run,” he said. “You say, all right, wait a minute. Where did these deals come from? Because we all think, it’s the agent. That the agent originated it — not so much anymore.”
According to the 2025 NAR Member Profile, the typical Realtor earns 20% of their business from past clients. The survey unsurprisingly found that this number increases for more experienced agents. When it comes to referrals not made by clients, typical Realtors gained 32% of those from non-personal referral sources.
Common referral sources include community social media boards/groups (20%), church and school groups (14%), and non-profit work in the community (10%). A little over a quarter (26%) of typical Realtors said they did not relieve any non-personal referrals in 2024. In total, the typical Realtor reported that just 1% of their business came from non-personal referrals in 2024.
As for third-party lead generation sites, the typical Realtor did not receive any business this way, however, 30% of respondents received at least some business through paid third-party lead sources. This is further reflected in Realtors reporting that they spent $0 on lead generation in 2024. Surprisingly, however, Realtors also reported spending no money on affinity/referral relationship expenses.
When it comes to technology tools for generating leads, NAR’s 2024 Technology Survey showed that popular options for quality leads include CRM platforms (32%), the local MLS (26%), their firm’s website (20%), digital ad campaigns (19%), and email marketing tools like Constant Contact (19%). Just 14% of respondents selected listing syndication sites and portals as the tech tool providing them with the highest number of quality leads.
How brokers are tracking leads
According to broker-owners interviewed by HousingWire, it is not common for brokers, especially at large firms, to know exactly how many leads come from each source type.
“I only have 25 agents and I have my finger on the pulse of what they are doing, so I know who is buying leads and roughly how many transactions they get that way,” Chip Stella, the managing broker of Rutledge Properties, said. “We have a good book of business, but it is a small brokerage, so it is more manageable. It would be harder to keep track of if I had a larger firm.”
McClelland emphasizes the importance for brokers and team leaders to understand exactly where their agents’ leads are coming from. “What if that lead source dries up for an agent?” he notes. For most agents, referrals are far easier to track—largely because they flow from two key places: their sphere of influence and third-party leads from networks or real estate portals such as Zillow, Realtor.com and Homes.com. Knowing this split makes it clear why brokers need visibility into lead pipelines, while agents can more directly measure the health of their referral networks.
“I treat Zillow zip codes like billboards’
Callie Kelley is one such agent who relies heavily on purchasing leads from a third-party, which for her is Zillow. In fact Kelley has built her business off of Zillow leads.
“My thought was, ‘Where are the most serious buyers in the market?’, and the answer is that they are on Zillow, so that is where the visibility is,” Kelley, the broker-owner of Marathon Realty of Idaho said. “I treat buying Zillow zip codes like buying billboards on Main Street.”
Kelley likes the fact that when a Zillow lead calls her they are typically ready to go and already know which properties they want to go see.
“Zillow connects me immediately with buyers who are willing and wanting to set an appointment to look at a property,” she said.
Kelley says that this convenience is well worth the $25,000 a month she pays Zillow as a Zillow Premier Agent. While Kelley knows that not all agents would agree, Stella can see her rationale.
“Zillow leads are typically ‘ready to go’ in that they have been working independently and have already found a house or houses that they want to see, so it is less effort than if you spend months warming a lead and then spend every weekend with them looking at homes. The effort is worth the cost,” Stella said.
Conversion is all in great conversations
Although the Zillow leads Kelley receives are warm, she said it still takes a fair amount of work to build trust with a consumer who has never met her before.
“You have to know how to talk to people in order to convert cold business,” she said. “For me the quickest way to do this is to educate them on the transaction and the market and then do whatever I need to, to remove roadblocks. I have an entire system to make sure they get connected with reliable lenders, and other service providers.”
No portals for this broker, it’s all sphere
In contrast to Kelley, for Charlie Wills, the broker-owner of The Wills Agency, 96% to 98% of his transactions come from referrals.
“After seven or so years in the business, I hit this point where I was doing the same amount of business no matter what avenue I advertised with or who I communicated with. I knew that there had to be a better way to grow my business,” Wills said.
He credits working with a training group called Core for helping him to build his referral business.
“If people are in your sphere of influence because they are friends with your neighbor or your grandmother, they already are more willing to talk to you than a lead that has never met you before,” he said. “When I was trying to convert those cold leads after a few conversations I’d end up losing that business to an agent they already knew or that a friend recommended.”
Additionally, Wills finds working his sphere of influence a much more enjoyable way for him to generate business.
“For example, the other day I decided I wanted to go hit a bucket of golf balls for 30 minutes and while I was doing that I ended up setting up two meetings with clients,” Wills said. “I’m generating business while doing things I enjoy.”
Regardless of how they get business, agents agree that generating business always costs something, whether that be time, emotional energy or actual dollars.
“The cost is always there,” Wills said. “You just have to figure out which way you want to spend it. For me, I’d rather spend my personal time because being around people is what gives me energy. If I spend money on leads and get nothing from it, that wastes my time and it makes me feel icky, but that is me.”
