‘Buy a lead or buy lunch’: Should you pay for leads or focus on referrals?

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As an agent, the question of whether to pay for leads or focus on growing a referral business can be daunting for the uninitiated.

The pros and cons of each were weighed by panelists Stan Ponte and Dana Cadena and moderator Kymber Menkiti at Inman Connect New York on Tuesday.

Ponte, a senior global real estate adviser at Sotheby’s International Realty, said he’s a firm believer in the “pay to play” method for building out your network.

“Some people are stronger behind a computer, and some people talk a lot, like me,” he said. “I do better in person, that’s my strength, so I pay to be in person with people as much as possible.”

Cadena, an agent with Keller Williams in New Jersey, stressed the importance of maintaining a healthy network through years of nurturing relationships.

“There’s financial capital, and then there’s social capital,” she said. “Relationships are our social capital.”

Keeping close track of your relationships helps stir up more business through referrals, Cadena said, and leads to your network growing even more.

“We really work with who we know,” she said. “We make that top list of the 200 people who love, know, and like us and then really peel the onion with ‘who do they hire?’ Business to business, who do they hire, other professionals who source their business can certainly impact and source ours … when those vendors and business to business contacts think of real estate, they need to think of you.”

Ponte said he makes an effort to get out into non-real estate circles that intersect with his personal passions, including theater and LGBTQ+ rights, working to ingratiate himself into those communities and become well known as a real estate agent within them.

“I spend a lot of time and resources supporting organizations that support the loves of my life,” he said. “By doing that I surround myself with like-minded, similar thinking people who then — it isn’t just that I’m a real estate broker, I’m a part of a community that I sell in, that I believe in, and I get to spend my day with clients that I like.”

More traditional referral networks through affinity groups like the Black Realtor Network and the Rainbow Network have their benefits as well, according to Cadena.

“There are so many other groups that like-minded agents can certainly connect — like the Inman community,” she said.

But when faced with paying for leads or growing his network, Ponte said he’d rather focus on human connection.

“I can either buy a lead or I can buy lunch,” he said. “I’d rather buy lunch.”

Email Ben Verde