Risks employers face if paying too little per application when hiring for real estate jobs

When employers in the real estate industry pay less than the standard $15 per application, they risk attracting candidates who may not possess the necessary skills, qualifications, or experience for the role. Real estate jobs often require strong communication, negotiation abilities, market knowledge, and sometimes specific certifications or licenses. Lower-cost job boards or platforms may draw in unqualified applicants, resulting in hiring managers spending more time sorting through irrelevant applications. This inefficiency slows down the hiring process, negating any initial savings from lower-cost applications and delaying the ability to fill essential real estate roles.

Additionally, paying below the market rate for real estate job applications can lead to distorted recruitment metrics. While a lower cost per application might result in a higher volume of candidates, the quality of those applicants may not align with the expertise required for success in real estate. In an industry where understanding market trends, handling transactions, and building client relationships are critical, hiring underqualified candidates can lead to poor business outcomes. The long-term impact of hiring mistakes, from lost deals to reputational damage, often outweighs the short-term savings gained from paying less per application.

Data gathered from hundreds of job boards shows that the effective cost per application when employers advertise a job is $15 if the job function is real estate. What quality and other risks do employers face if they pay a small fraction of the going rate to a vendor for these leads?

• Risks of Low-Cost Candidate Leads
• Low-Cost Leads Harm Recruitment Quality
• Cheap Leads Waste Time and Resources
• Low-Quality Leads Damage Reputation
• Creative Pricing Models Can Mitigate Risks
• Cheaper Leads Result in Poor Quality
• Cutting Corners Reduces Lead Quality
• Invest in Quality for Better Candidates

Risks of Low-Cost Candidate Leads

The challenge with this model of paying a fraction of job lead costs is the risks, both on the quality of candidates and the cost of hiring that can be incurred. Cheaper leads can be associated with soliciting applications that are either poorly qualified or totally irrelevant, with the vendors not putting enough attention on targeted sourcing and screening. During my time at Zibtek, I have watched many companies take steps toward their goal of cutting back on hiring expenditures, and then waste their energy in the process of working with a bunch of unsuitable candidates. This leads not only to prolonging the entire process of recruitment but also to expensive management errors. When you buy leads at a higher-quality level of service, there is a saving of resources and money because there are high chances that the candidates will fit the role.

Cache Merrill, Founder, Zibtek

Low-Cost Leads Harm Recruitment Quality

When recruiting top talent in real estate, employers seek affordable solutions. However, paying much less than the market rate ($15) for job leads can lead to unexpected problems.

The quality of applicants is a major concern. Low-cost vendors often attract unqualified or inactive candidates, wasting time and resources on unsuccessful interviews. These leads may come from outdated databases, increasing the likelihood of contacting candidates who already have jobs. This mismatch prolongs the hiring process, delaying critical business operations.

Partnering with questionable vendors can harm a company’s reputation and deter top talent. Unhappy candidates share poor experiences with colleagues and online, damaging the employer’s brand. This perception spreads to the industry, signaling to competitors that the company doesn’t value quality talent.

Focusing on cheap leads also distracts from strategic hiring. Employers may miss top performers and end up with teams that lack diversity, stifling creativity and innovation. Limited exposure to fresh perspectives hinders business growth.

To avoid these risks, employers should invest in trustworthy vendors with proven track records. Clearly defining requirements and qualifications is essential. Regularly checking lead quality and adjusting strategies helps ensure successful recruitment.

By understanding the hidden costs of cheap real-estate job leads, employers can make informed decisions, prioritizing quality over cheap alternatives.

Sebastian Jania, Owner, Real Estate Expert, Marketing Manager, Sales Representative, Alberta Property Buyers

Cheap Leads Waste Time and Resources

As an agency growth strategist, I know the risks of cheap lead generation all too well. My agency has paid the price for generic marketing in the past. We now partner with specialized vendors who understand our niche and deliver high-quality leads.

If an agency buys bargain-bin leads, they’ll waste hours vetting unqualified prospects with little chance of closing deals. Client acquisition costs skyrocket while revenue flounders. The agency may get many new contacts but few good fits.

Agencies have unique needs and cultures. A vendor must grasp these nuances to find prospects who match well. They build trust through expertise and deliver leads ready to buy. Cheap leads cannot achieve that depth or make those vital connections. Only highly targeted solutions will yield results.

Bargain leads seem smart short term, but damage accumulates. For professional services, strong long-term partnerships are key. In any field, there are no shortcuts to finding the right clients. Real value comes from real understanding. As CEO of Business Builders, I know the risks of cheap leads all too well. My agency provides high-quality solutions for clients in industries like real estate, and we charge accordingly because we understand the real challenges they face.

If a real estate firm hired a cheap vendor, they’d waste hours on unqualified leads with little knowledge of the industry. Staff would become frustrated, and costs would rise from high turnover and wasted time. They may get many applications but few good matches.

Real estate is complex, and each firm has unique needs and culture. A vendor must grasp these nuances to find solid agents and clients. They must build real trust to do quality work. Generic leads cannot achieve depth or make vital connections. Only specialized solutions yield results in real estate.

Cheap leads seem good in the short term but cause long-term damage. For roles demanding expertise, strong partnerships matter. In real estate, as anywhere, there are no shortcuts to finding the right people. The real value comes from real understanding.

Jay Owen, CEO, Business Builders

Low-Quality Leads Damage Reputation

A primary challenge employers encounter is the scarcity of qualified candidates. By paying a lower cost for leads, employers may receive a higher quantity of applications, but those applicants may not have the necessary skills or experience needed for the job. This can lead to wasted time and resources spent on reviewing and interviewing unqualified candidates.

Furthermore, paying a below-market rate for leads could also attract low-quality vendors who may use unethical or illegal tactics to generate more applications. This can damage the reputation of the employer and potentially result in legal consequences.

In addition, by not investing in quality leads, employers may also miss out on potential top talent who may not apply due to the low perceived value of the position or company. This can ultimately hinder the growth and success of the company.

Amanda New, Founder & CEO, Cash For Houses Girl

Creative Pricing Models Can Mitigate Risks

As the owner of Magnetik, I know the risks of cheap lead generation well. When I first started, buying lists and spamming seemed appealing, but unqualified leads wasted time and money. 

Now we rely on targeted ads and partnerships. For a client’s roles, we placed ads on industry sites, reaching interested candidates. The cost was higher, but conversion was 25 versus 5 percent for lists. 

Another client wanted “affordable” leads for a sales role. We suggested a reduced fee to start, with bonuses for hires. The client got leads for $5 each, and we earned $20 for candidates they interviewed, $30 for second interviews, and $100 for hires. They tripled their team for less, and we made 50% more than our usual fees. Cheap leads often mean low quality, but creative pricing models can work. Know your risks, but think outside the ‘you get what you pay for’ box.

Doug Steinberg, Founder & President, Magnetik

Cheaper Leads Result in Poor Quality

If employers pay a small fraction of the typical $15 cost per application for real-estate job leads, they may face several quality and other risks. First, I think candidate quality is the biggest concern. Paying less often means the vendor is cutting corners, possibly sourcing from less reputable job boards or using outdated databases. This can result in receiving applications from unqualified or irrelevant candidates, which wastes time and resources in filtering through unsuitable leads.

Another risk is lead duplication—cheaper vendors may not have robust systems to ensure the leads you’re getting are exclusive. This means you could be competing with multiple employers for the same pool of candidates, making it harder to secure top talent.

Lastly, there’s the risk of fraudulent or fake applications. If the price per lead is too low, the vendor may resort to tactics like using bots to generate applications, which skews data and can lead to significant delays in your hiring process.

In the end, opting for cheaper leads might save money upfront, but it often results in lower-quality hires, lost time, and even increased turnover.

Kenan Acikelli, CEO, Workhy

Cutting Corners Reduces Lead Quality

As someone with over a decade of optimizing sales processes, I know cutting corners on lead quality is extremely risky. In real estate, bad matches waste time and damage morale, while the right hires drive revenue.

My team once used a bargain lead service for an agent role. Of 100 applicants, only 1 had condo experience, as needed. The role stayed open for months, costing deals. When we found the ideal agent, her area’s revenue rose 23 percent.

Real estate demands expertise and trust. Generic solutions cannot grasp needs or build relationships. My company pays premium vendors who understand us. They research and suggest only good matches. It costs more but delivers results.

High turnover from poor hires is expensive. In real estate, the costs of a bad match are huge. Real value comes from real understanding, gained through partnership. An initial investment in quality pays off.

Ryan T. Murphy, Sales Operations Manager, Upfront Operations

Invest in Quality for Better Candidates

I’ve been in the real estate game for a good while now, and I’ve noticed something important about hiring: skimping on what you pay for doesn’t pay off. Really, when you try to cut corners by paying less than the standard rate in most situations, you’re likely to get flooded with candidates who just don’t cut it. They’re usually not the right fit and might not even have the knowledge that’s so important in this industry.

In my experience, going cheap on lead generation or job ads usually ends up bringing in people who lack the important skills you need. This not only wastes your time and drains your resources during the hiring process. Plus, when leads are inexpensive, it’s usually because the vendors aren’t doing a complete job of checking the candidates they send your way. This increases the risk of getting bogged down with applications from people who are unreliable or basically not up to the useful.

So, what’s the fix? Well, it’s worth paying a bit more to work with trusted vendors. Yes, it might sting a bit at first financially, but this technique tends to attract higher-quality candidates. These are the kinds of pros who can hit the ground running and start contributing to your business right away. Trust me, making this investment upfront can really save you a lot of hassle and expense in the long run. It’s about paying for value and quality—two things that are absolutely an absolute must in the real estate sector.

John Gluch, Owner, Gluch Group San Diego