Are pay at close real estate leads really “low risk”?
That's the exact question we wanted to ask Chris Morgan in our recent episode of the /RealEstate podcast. Chris is the VP of sales at Real Geeks, so he knows lead generation is one of agents' biggest concerns.
And if you're here, you've probably wondered this yourself: “Why not just put most of my budget into pay at close leads?”
On paper, pay at close leads in real estate sound perfect. No upfront spend. No ad bills. Just close a deal and pay the fee.
In this article, we’ll look at what pay at close really is, how the numbers compare to owning your own lead generation channel, and why, if they make so much logical sense, team leaders are choosing to move back to branded PPC, Facebook ads, and lead gen services like Real Geeks instead.
Check out the full /RealEstate conversation with Chris on YouTube, or wherever you get your podcasts.
Pay at close leads are leads you don’t pay for upfront. A third-party company generates the lead, routes it to you or your team, and then charges a referral fee only once and if the deal closes.
How much that referral fee is depends on the company. But most of these “pay when you close” programs charge around 30–35% of your gross commission.
Some models, like Zillow Flex, have been reported to charge 25–40% referral fees depending on the market.
So yes. On the one hand, the referral fee is much bigger than what you could be paying with a subscription-based lead gen channel. But on the other hand, you're only paying when you've already secured your money from the lead.
Pay at close leads can be great for agents first starting out because they solve three emotional problems:
Fear of wasting money
You don’t see a monthly ad charge. You only see a fee when money comes in.
Fear of "doing marketing wrong"
Someone else is handling the Google Ads, Facebook ads, landing pages, and split testing. You can just focus on closing.
Need for quick wins
New agents and teams love seeing transactions on the board, even if the net is smaller.
That’s why Chris M. refers to pay at close leads as “short-term feel-good transactions” in the show. They scratch the itch of activity, yes. But they aren't helping you build a business that you truly own.
Let’s compare two simple scenarios for a $500,000 home with a 3% side:
Gross commission: $15,000
Scenario A: Pay at close lead (35% referral fee)
Scenario B: Your own lead generation (PPC + SEO + Facebook + sphere)
Let’s say you spend $12,000 per year on lead generation for real estate with a platform like Real Geeks (site + CRM + PPC / social ads). That gives you, for example, ~300 leads over the year.
Industry data shows internet lead conversion often lands around 0.5–1.2% for typical agents, and can be higher for teams with good follow-up.
At just 1% conversion, those 300 leads = 3 closings.
Now compare:
This means that most agents will be generating more money per deal with their own funnel, and keep those contacts solely in their database.
Over a few years and as your conversions keep improving, the gap gets huge. That's why most agents start out with pay at close leads to solely focus on their closing skills, but inevitably transition into channels they own to actually build a profitable business.
With pay at close leads, you’re often renting someone else’s pipeline:
When you build your own lead generation, your CRM and website become the core asset:
You can’t sell a business you don’t own.
Agents often get into real estate for freedom and autonomy. Pay at close models quietly trade that away.
With many pay at close programs:
So you end up with two bosses:
Your broker or team leader.
The pay at close vendor that controls your lead flow.
Considering many agents get into real estate to avoid having a boss in the first place… this can get frustrating quickly.
When you own your funnel with a system like Real Geeks:
Pay at close leads are not evil. They just come with tradeoffs.
They can make sense when:
But if you build your whole career on “I only work pay at close leads,” you’re always playing someone else’s game at someone else’s margins.
Long-term, a plan that will help you build a sustainable real estate business usually mixes:
A partner like Real Geeks can help you:
You still invest money and time. But you build something that is truly yours.
If you are asking “Are pay at close leads good?” the real question is:
“Do I want to rent my pipeline forever, or do I want to own it?”
Perhaps the best approach is to do both: focus 80% of your efforts on generating long-lasting, business-building channels, and 20% on working through some pay at close leads as an extra source of revenue.
Now, about that 80%:
Get a CRM and website that you own (like Real Geeks).
Turn on a sensible lead generation package for your area and budget. This saves you the time of having to learn marketing yourself (which you can still do if you want full control).
Commit to calling your leads and actually solving their problems, not just collecting forms. Referrals will be another lead generation channel, so building strong relationships is non-negotiable.
Protect your contacts and make your database the core asset of your business. Use automations wisely and focus on value (market reports, videos explaining the buying process, educational assets). You should be your leads' main resource for homebuying and homeselling.
If possible, select one or two extra channels you work on consistently every week: blogging for SEO, creating social media content, etc.
If you want to see how top agents are doing this, check out the full /RealEstate episode with Chris Morgan, or book a Real Geeks demo and ask our sales team what high-performing agents in your market are doing right now.