Are Zillow Leads for Realtors Worth It?

=Zillow is the most visited real estate website in the United States and reported a monthly average of 236 million users in the third quarter of 2022. With all this online traffic, it’s no wonder they created the subscription-based service, Zillow Premier Agent, to generate leads for real estate professionals.

Zillow says their service instantly connects interested buyers with real estate agents, but are Zillow leads worth it?

It sounds really simple and super lucrative — Zillow Premier Agent promises to deliver leads to you every month for a monthly fee. Of course it’s up to you to convert these leads, but with a stream of interest coming in, what could go wrong, right?

Before you jump headfirst into paying for this service, take a look at what it’s really like to buy Zillow leads, if it’s worth it, and what your alternative options are for real estate marketing.

1. The Zillow leads you really want are very expensive.

Zillow determines your monthly spend based a few things:

• The value of the homes you are targeting,
• The zip codes they are located in,
• And the level of competition among realtors in the area.

So if you are looking to list multi-million dollar homes in Southern California, be ready to pay a pretty penny for it. Real estate agents can expect to pay as high as $2,000 or more a month for primo locations like these.

Your price is also determined by how much you want to show up on the site. So for example, buying 10% of a certain housing market will cost far less than 50% of that market. You’ll receive more leads and show up more often than your competition, but your bill will also be higher.

Based on these factors, Zillow promises to deliver leads to you every month. So how good are these leads?

2. Zillow leads are often poor quality, so the majority of them won’t sign.

The reality is a lot of the leads that come in from Zillow are not serious buyers. They are curious onlookers who are just nosy about properties but aren’t nearly ready to pull the trigger on a serious home search.

Zillow claims that 41% of people visiting the site are planning to buy or sell a home in the next 12 months. That’s less than half!

Let’s be honest, how many times have you gone to Zillow just to look at pretty homes for fun?

The majority of browsers are doing just that — looking for fun. So most of the people filling out forms or reaching out to agents are doing so just for the heck of it, because they can.

However, one person’s lark is another’s massive waste of time. Namely: yours.

Of course, you could get lucky. Zillow real estate leads do produce results sometimes. However, the return on investment is quite low when there are other marketing tactics that produce far more leads — high-quality leads — and more opportunities for you to convert them.

3. There’s a ton of competition for Zillow realtor leads.

Think about this: there are thousands of Zillow realtors, so there are multiple competitors you are up against for every one home listing.

Typically, when a buyer goes to an address, they fill out an online form with their contact information and this gets sent to agents signed up for Zillow Premier Agent. This is convenient for the person browsing, but how do they go about choosing the right person to work with?

Every agent has a profile on Zillow that includes a photo, reviews, star ratings, and other information like level of experience. But how you show up on Zillow isn’t determined by these important factors; it’s determined by how much money you are spending.

Like I mentioned in the first point, the amount of leads you receive and your placement in the agent networks are both based on the percentage of market share you purchased from Zillow. So if you chose 50%, you will show up more than the agent that selected 10%.

If you are a new real estate agent without a lot of capital to draw from early on, this would be a major problem. All the larger brokerages and agents with big bank accounts will always show up first while the newbies stay at the bottom of the page.

To add further insult to injury, these leads could be going to agents who know far less about the property and the area than you.

For all these reasons, Zillow Premier Agent isn’t the best option for realtors looking to grow — especially if they are new to the industry. It just doesn’t offer the best return on investment when there are more effective marketing strategies you can use to bring in interested buyers and sellers.

Take for example one of my clients, The Memphis Luxury Group at Kaizen Realty. When owner Stacy Williams started out in the real estate industry, she tried various types of marketing including Zillow leads. However, she said Zillow leads did not work for her at all.

She said, “I never had one call, one actual client from a Zillow lead.”

Stacy also tried cold calling and door knocking, but it was too time consuming, so she started asking around for marketing advice and also did some research. After hearing from several other real estate agents that postcards worked for them, she reached out to PostcardMania to get started on a direct mail marketing campaign.

It was a good thing she did because the postcards worked.

She ordered 12,000 cards and has been mailing out 1,000 a month consistently. So far, she has mailed 6,000.

Stacy said, “The results of the campaign have been fantastic!”

After a couple months of mailing, Stacy got the biggest listing she has ever had in her career — a home for $1.9 million. Then she received another response from the postcards after the person had been receiving them for several months.

Stacy expects to bring in around $100,000 from these two home sales bringing her return on investment to 800%.

“Postcards have such a small investment for a huge turnaround,” she said.

So why exactly do postcards work? Let’s revisit the weaknesses of Zillow leads and see how postcards work where Zillow leads fail.

Cost: Postcards fit into any budget, big or small, and still deliver a great return on investment.

Direct mail marketing is very scalable. You can start out mailing as few as 500 cards a month and increase the amount over time as your business expands.

For example, let’s say you decide to try a real estate direct mail campaign and start with 1,000 postcards using the money you would have budgeted for a Zillow leads account.

According to the Direct Marketing Association of America, the national average response rate for direct mail across all industries is 2-10 responses per 1,000 cards. So out of those 1,000 people who received your postcard, you can expect to get about 50 responses on the high end and 10 on the low end. If your conversion rate is 1%, you would most likely achieve 1 listing since 1% of 50 is .5.

Now let’s compare that to Zillow leads which promises about 4 leads (responses) a month. At a 1% conversion rate, you would get .04 listings.

The logic shows that the more people you reach with your advertising, the more chances you’ll have to convert them. At the end of the day, it’s a numbers game, and you need as many prospects as possible to give you more opportunities for conversion.

Do you want 50 interested buyers and sellers reaching out to you or 5?

Based on these averages, you are more likely to get multiple home listings in the pipeline with direct mail than Zillow.

Quality: Postcards deliver quality leads.

The way leads are delivered on Zillow is a completely different process than how leads come to you through postcards. Firstly, a person on Zillow typically only gives out their contact information after looking at a specific property whereas postcards advertise the real estate agents themselves.

A curious person who just wants more information about a property but has no serious intention of selling or buying could easily fill out Zillow’s form. But when someone receives a postcard in the mail, it takes additional effort just to reach out to that agent or broker. The recipient would have to pick up the phone and dial a number, sit down at the computer and write an email to them, or scan a QR code to visit them online.

Someone who is not seriously looking to buy or sell would do any of those things. Hence, when the time does come that someone is ready to start house shopping or sell their house, they have the postcard ready to go for a real phone call.

The Zillow lead service also puts more of the onus on the agent to call the lead back once they receive the information so there’s more work involved. With postcards, people are contacting you — they have to put in that effort.

Buyers and sellers also feel like they have more control over the process when they get to initiate the conversation with a postcard. I’m sure you’ve casually filled out an online form for some information only to discover that it led to hundreds of phone calls afterward that you didn’t want to field.

With so much free data available today, no one wants to have to deal with multiple real estate agents calling them vying for their business. Since prospects have the choice to pick up your phone call or not, that leaves you with less opportunity to persuade them to sign on the dotted line.

Competition: There’s less competition in the mailbox.

This year, the United States Postal Service announced that marketing mail revenue has decreased $333 million and mail volume has decreased 2.6 billion pieces. Some of the reasons include inflation causing advertising budgets to drop and a shift in spending toward digital advertising, television and radio.

Marketing mail declined 16%, so that means you have less competition in the mailbox already. Even if other real estate agents are investing in direct mail too, you’d still have a better chance of getting a phone call from a postcard. Why? Because you have even more opportunities to persuade them to use your postcard over the others.

Consider this…

With a postcard you can add an offer like a lower commission rate, a free real estate guide, or even a home depot gift card to persuade them to call you. You can also put a friendly photo of yourself on the front, a positive five-star review, photos of homes you’ve sold, and other helpful information like your level of experience, knowledge, and certifications and licenses.

Zillow leads don’t allow you to leverage any of those tactics. It’s simply you either have the cash to spend on a higher market percentage or not.

With lead-generating design elements on your postcard, you can show prospects exactly why they should choose you over your competition. To get the best results, include at least one offer, a five-star review, professional head shot, and a strong call to action.

Some common real estate offers you could use include:

-A $25 gift card to Home Depot, Lowe’s, or other home goods store

-Free professional home staging

-A low commission rate

-Free comparative market analysis

-Free home warranty

-Free moving services

-Free cleaning services

-Cash back at closing

Now that you know how Zillow leads work and what some of the pitfalls are, you can make a more informed decision about your marketing plans.

We have mailed over 14 million real estate postcards in 2022 on behalf of agents nationwide. You can also find dozens of successful case studies from real estate agents on our website! Scroll through many different postcard designs and read all the details of how they generated revenue with direct mail so that you can apply the same tactics for your business.

PostcardMania offers direct mail marketing campaigns that fit different budgets and different business goals. A marketing consultant will walk you through all your options for targeting, seamless production and delivery, as well as choices for template or custom postcard designs.

If you’d like more information on how to get a real estate postcard campaign started, call one of our marketing consultants at 1-800-628-1804. They can walk you through the whole process and make the experience fast and easy.