Why Buying Leads for Realtors Is a Recipe for Failure

Recently, I had a conversation with a loan officer who was considering buying leads for realtors to entice them to work with him. His reasoning? “Realtors want leads, so I just want to provide them with what they ask for.”

While that logic might seem sound on the surface, I had to explain why this strategy is almost always doomed to fail. In theory, it makes sense—but in practice, it rarely works.

For context, I speak with 10 to 20 different loan officers and mortgage brokers across the country every single week—week after week, for the past six years. Through these conversations, I’ve heard countless stories of loan officers buying leads and handing them to realtors. Almost every time, the outcome is the same: failure. Here’s why.

1. Bad Leads = Bad Reputation

The likelihood of purchased leads being high-quality is low. Most internet leads tend to be unmotivated, unqualified, or simply uninterested. When you provide these to a realtor, they’ll quickly realize you’re wasting their time. Worse yet, they’ll associate you with bad leads, leaving a lasting negative impression. Instead of building a strong business relationship, you’ll be creating a reputation for being unreliable.

2. Buying Loyalty Is Temporary

Let’s say you get lucky and the leads are somewhat decent. Even then, your relationship with the realtor is now based on you providing them leads. Eventually, you’ll want to stop spending $1,000+ per month on lead generation. The moment you do, that realtor will likely move on to another loan officer who is still buying leads. In this scenario, you haven’t earned their partnership—you’ve merely rented it. This is not a sustainable way to grow your business.

3. Lead Generation Is an Uphill Battle

Beyond the financial investment, buying internet leads is an exhausting process. Most of these leads are cold, low-intent, and difficult to convert. Unless you have a well-oiled system and a high volume of consistent business, it’s an inefficient use of time, money, and energy.

The only scenario where investing in internet leads makes sense is if you already have a strong foundation of referral partners and are consistently making at least $10,000 per month in mortgages. In that case, even if lead generation doesn’t work, your business remains stable. But if your entire business model is built on buying leads and they don’t convert, your entire operation is at risk.

The Key Takeaway: Build Relationships First

The most effective way to grow a sustainable mortgage business is through strong, trust-based relationships. Instead of trying to buy realtors’ loyalty with leads, focus on providing genuine value. Offer insights, market knowledge, and excellent service. Establish yourself as a reliable and knowledgeable partner they can trust.

Once you’ve built a solid referral network, then—and only then—does it make sense to consider lead generation as a supplemental strategy. But it should never be the foundation of your business.

Final Thoughts

If you take one lesson from this, let it be this: Don’t buy relationships—earn them. Building a sustainable mortgage business requires trust, consistency, and a strong referral network. Lead generation is a gamble, and in most cases, the odds are stacked against you.

So before you consider buying leads to attract realtors, ask yourself: Am I trying to take a shortcut, or am I truly investing in the long-term success of my business?