You should understand the risks of working with third party agents. Do you know that as you browse third party websites, or enter your personal information, big tech web companies sell your information to other companies?
Selecting a button on a third party real estate website like Zillow or Redfin and entering your personal information thereafter is risky for a few reasons we will cover in this article. When you enter your personal information it is immediately given to a real estate, and possibly a mortgage company, who is paying for that information as soon as it is entered on that website. The agent you are being sold to works for a real estate company who most likely does not represent the seller. You should be aware of the following risks before engaging in this type of information sharing.
Big Risk #1: Lack of real estate sales experience. What experience does this agent or company need to have to receive your information? They just need to pay a monthly fee. There is no sales experience necessary to receive your information. The agent could have received their real estate license yesterday, and today they are buying your information. Because these third party websites are very popular there is a sense of trust the consumer has in them, as well as the agent that receives their information. Do you really want to give your information to an agent who may or may not have even completed a sales transaction, one who you may use because you believe they are competent in their ability to represent your interest in possibly the largest transaction you may ever make in your lifetime? I have been a Realtor® for 15 years in Sarasota, Florida and have worked on hundreds of transactions for buyers and sellers alike. Experience matters when dealing with the largest trasaction you may ever make in your lifetime.
Big Risk #2: Overstretched workload. Lead-buying agents often take on a high volume of lead contacts to offset the cost of purchasing them. This means they may juggle dozens of prospects simultaneously, affecting their attention to any one client. Buyers may experience delayed responses (especially after the first point of contact), rushed home tours, or generic advice that doesn’t account for their specific needs. When a high interest property hits the market it is imperative to move on the property quickly to have the opportunity to secure that property for yourself. If the agent you are paired with is busy with the other leads they are buying you could miss out on the property you want to buy. Countless times I have worked with buyers who were previously working with an agent who didn’t answer their calls or respond to their requests in a timely manner to view a home as soon as it hit the market. My clients attest to my promptness and attentiveness to their immediate needs because I understand the necessity of staying in close contact with clients who are ready to buy a home. My clients calls rarely, if ever, go unanswered when they call me.
Big Risk #3: Misaligned priorities. Agents who pay for leads may feel pressure to close deals quickly to recoup their investment, potentially prioritizing their own financial goals over the buyer’s best interests. This could lead to pushing buyers toward homes that don’t fully meet their needs or encouraging them to make rushed offers to secure a commission. I have worked with buyers who thanked me and appreciated the fact that I did not pressure them into making an offer on a property they have serious interest in. I understand the fact that this is a large purchase, and buyer’s remorse is real. I listen to my clients, if they are not quite ready and need to process their decision longer I try to position them to not miss out on a property they may want to buy but want to make sure they are making the right decision for themselves and their family.
Big Risk #4: Lack of local market knowledge. Third party platforms often assign agents based on who paid for leads in a given zip code, not who has deep ties to the area. These agents may lack nuanced knowledge of local neighborhoods, school districts, or market trends, which can disadvantage buyers in a competitive market. Without local connections, they may also miss out on off-market or pre-listing opportunities that experienced agents access through their networks. I know a lot of the agents who move to our area need to rely on buying leads to establish their business. I would guess the majority of real estate agents in our area relocated here from another state. Since I was born and raised in Sarasota I have a ton of local knowledge and connections that certainly work to the benefit of my buying clients who are looking for a specific neighborhood or home, whereas an agent from another area could only rely on the MLS to locate a home based on home critera alone. They have no feel for the actual community and which neighborhoods may be a good fit for your lifestyle.
Big Risk #5: Inconsistent communication and follow-through. Because lead-buying agents often work with transient leads, they may not invest in building long-term relationships. This can result in poor communication, missed deadlines, or a lack of follow-through during critical stages of the transaction with tasks like previewing homes and communities, the due diligence and inspection period, financing obligations or closing procedures. Buyers may feel like just another transaction, rather than a valued client with unique needs. I understand that my business comes from those who trust me, and building a relationship on trust is of the utmost importance. My clients have attested to feeling like their interest were being looked after. It is my belief that the clients interest is my interest and that I need to make sure I do right by all of them. My expectations of the client are the same. Transparency and honesty is key to a lasting relationship in business!
Big Risk #6: Potential for hidden costs or conflicts. Some lead-buying agents may steer buyers toward preferred lenders, inspectors, or other service providers who offer kickbacks or incentives, rather than those who offer the best value or quality. This can lead to higher costs or suboptimal services for the buyer. While not all lead-buying agents do this, the pressure to maximize revenue from each lead can create conflicts of interest. I worked with an agent who did this to every client because he received a kickback, so it is defintely a problem in our industry. Even though agents are required to disclose if any kickbacks are given I know that doesn’t always happen. But even if it does, people can be conflicted when they know they will make more money if the client uses their referral. I don’t operate that way, and none of the companies I refer out to clients send me any type of kickback for referring them. I do it because I believe they are what is best for my client. For instance, I tell all my clients that not all Lenders are created equal. It is important for them to understand this fact. I explain why it may be beneficial for them to use the lender I am referring, but also encourage them to shop at least 3 to compare.
Big Risk #7: Lack of long-term support. Lead-buying agents who rely heavily on their lead purchases may view their role as transactional, offering little post-purchase support (e.g., advice on maintenance or resale). You are a means to an end for them, and then on to the next lead. I want to remain a go-to contact for many clients who can reach out to me for years after they have purchased to ask for advice, or ask for a new service provider, or what I know about something happening in their community or development. I understand that the relationship with my clients is how what will allow me to continue to do what I love doing, which is helping more people achieve the American Dream!
These risks highlight the potential downsides of working with agents whose primary client acquisition method is through purchased leads. While the Zillow’s and Redfin’s of the world are great for window shopping, they cannot replace an agent who knows the market area, what your needs are and who fights for your interests solely. The risks aslo underscore the importance of working with an agent who builds their client base through reputation and relationships rather than purchased leads. An experienced agent like myself will always offer personalized attention, local expertise, and a commitment to your best interests, avoiding the pitfalls of the lead-driven approach that many agents use these days by simply buying your information. I’d love to share how I can make your home search stress-free and successful. Can we hop on a quick call to discuss your dream home?
