Real estate & rental
Real Estate Agent Lead Value Calculator
Works what a lead is worth to an agent, which sets what one is worth paying for.
Result
This is gross profit, not revenue, and it counts the whole relationship rather than the first job. It assumes the repeat work is real for your business, which is worth checking against your own records before spending against it.
Get a Free Business AuditHow the calculation works
Conversion rate times the net compensation on a typical transaction gives a lead's value, with future transactions and referrals from that client added. The share of that value you are prepared to spend sets the maximum per lead, and the conversion rate is the input that moves it most.
What moves the number
- Conversion rate from lead to closing.
- Net compensation per transaction.
- Repeat and referral value from a converted client.
- Whether leads are exclusive or shared.
Where this one goes wrong
Conversion rate varies by source by a factor large enough to change every conclusion, so a single rate applied across sources makes the cheap ones look good and the good ones look expensive. Track conversion by source. Shared leads in particular convert at a fraction of exclusive ones, and the lifetime value of a converted client, including the referrals they generate, is what makes a seemingly expensive lead source worth paying for.
Before you quote
- Track conversion rate separately by lead source.
- Apply a much lower rate to shared leads.
- Include referral value from converted clients.
Questions
About this calculator
What is a real estate lead worth?
Your conversion rate times the net compensation on a typical transaction, plus the repeat and referral value of a converted client. The conversion rate is the input that moves it most and it varies enormously by source.
Why track conversion by source?
Because the rates differ by a factor large enough to change every conclusion. A single blended rate makes cheap low-converting sources look good and expensive high-converting ones look bad, which is exactly backwards.
Should referral value be included?
Yes, because a satisfied client who refers others is worth several who do not, and that value originated with the lead. Including it is what justifies paying for lead sources that look expensive against a single transaction.
The formula
lead value = close rate x first transaction profit x (1 + repeat transactions)
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How to use this calculator
- Share of leads you win (%). Enter your own figure; the page starts at 32%.
- Average first transaction commission ($). Enter your own figure; the page starts at $9,400.
- Gross margin (%). Enter your own figure; the page starts at 62%.
- Extra transactions over the relationship. Enter your own figure; the page starts at 2.4.
- Share of value you will spend (%). Spending the whole value leaves nothing for the business.
The result updates as you type, so you can try a figure, see what it does to value of one lead, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Share of leads you win | 32% |
| Average first transaction commission | $9,400 |
| Gross margin | 62% |
| Extra transactions over the relationship | 2.4 |
| Share of value you will spend | 25% |
What comes out
| Result | Value |
|---|---|
| Value of one lead main result | $6,341 |
| From the first transaction alone | $1,865 |
| Value of one client | $19,815 |
| Most to pay per lead | $1,585 |
One lead is worth $6,341 in gross profit once the close rate and repeat work are counted. Paying more than $1,585 for one leaves too little behind to be worth doing.
How sensitive the answer is
Holding everything else steady and changing only average first transaction commission, this is what happens to value of one lead. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average first transaction commission ($) | Value of one lead |
|---|---|
| $4,700 | $3,170 |
| $7,050 | $4,756 |
| $9,400 example above | $6,341 |
| $14,100 | $9,511 |
| $18,800 | $12,682 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Share of leads you win (%)
- A percentage, between 0 and 100, starting at 32%.
- Average first transaction commission ($)
- A money amount, starting at $9,400.
- Gross margin (%)
- A percentage, between 0 and 95, starting at 62%.
- Extra transactions over the relationship
- A number, between 0 and 50, starting at 2.4.
- Share of value you will spend (%)
- Spending the whole value leaves nothing for the business.
What the results tell you
| Result | What it is |
|---|---|
| Value of one lead | The headline result. A money figure. |
| From the first transaction alone | A money figure. |
| Value of one client | A money figure. |
| Most to pay per lead | A money figure. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.