Last Updated on March 29, 2026 by Elizabeth Nolan
Every year, NAR surveys nearly 5,000 REALTORS® about where their business actually comes from. The 2025 Member Profile — covering 2024 transaction data — contains one of the most clarifying data sets in the industry on this question.
As we move into 2026, the numbers haven’t shifted enough to change the argument. But they’re worth understanding clearly, because the lead generation industry is very good at making the data hard to see.
What the Numbers Actually Show
On where business comes from, the 2025 NAR Member Profile is unambiguous:
- 20% of the typical agent’s business comes from repeat clients
- 21% comes from referrals from past clients and customers
- 41 cents of every dollar comes from people who already know you
Now look at what paid lead sources produced for the median agent in 2024.
Zero.
Thirty percent of agents bought at least some paid leads. But the median agent — the one sitting exactly in the middle of the entire profession — closed nothing from third-party lead platforms. Not one transaction.
The Experience Curve Is the Real Story
The data becomes even more instructive when broken down by tenure. Among agents with 16 or more years of experience:
- 40% said repeat clients made up more than half their business
- Referrals accounted for 28% of their business, compared to 21% for the typical agent overall
That’s nearly 70% of a senior agent’s book coming from people who already know, trust, and recommend them.
This didn’t happen by accident. It happened because every transaction they closed became a relationship asset — a future source of repeat business and referrals — rather than a closed file. The pipeline compounds quietly, year after year, while they focus on serving the clients in front of them.
Why the Lead-Buying Math Doesn’t Work for Most Agents
Industry estimates put average Zillow Premier Agent lead costs at $139–$223 per lead in non-major metros, with monthly budgets typically starting around $1,000 and climbing significantly in competitive markets. Set that against a median outcome of zero closed transactions and the ROI case collapses quickly.
The 30% of agents who did get some business from paid leads are not a monolith. A meaningful share of that group are high-volume teams with dedicated inside sales agents calling new leads within minutes, CRMs built for cold lead nurturing, and the capital to sustain 6–12 months of low conversion rates. The solo agent spending $1,000 a month on Zillow is not playing the same game as a 20-person team with a full follow-up infrastructure. They’re just funding it.
It also helps to understand the platform business model. Zillow generated $2.2 billion in revenue in 2024, up 15% year over year, driven primarily by Premier Agent advertising — agent money. The product is marketed to every agent. It consistently works for a specific subset. Those are two very different things.
What Newer and Growing Agents Should Do Instead
The most common mistake newer agents make is assuming they have nothing to work with because they don’t have past clients yet. The NAR data tells a different story: the business pipeline starts with people who know you, not people who’ve transacted with you.
Every agent starting out already has a sphere. The job is to activate it systematically.
Build your database before you build your pipeline. Every person you know — friends, former colleagues, neighbors, family — goes into a CRM from day one. Not just active leads. Everyone. The sphere doesn’t self-organize, and the agents generating 40% repeat business in year 16 started keeping track in year one.
Use what your brokerage already built. Agents at major firms have enterprise CRM tools, marketing platforms, and transaction management systems sitting largely idle. If you’re at Compass, Keller Williams, Coldwell Banker, or any major brokerage, your technology stack is already ahead of what most independent agents can buy. Learn it before you spend money elsewhere. The problem is almost never access — it’s activation.
Stay top of mind consistently. The reason experienced agents generate 28% of their business from referrals isn’t magic — it’s that they’ve stayed in contact with their sphere for years. That habit is fully replicable from year one. It requires consistency, not budget.
Build agent-to-agent referral relationships. Licensed agent to licensed agent referrals — with proper disclosure and a signed referral fee agreement — are one of the most underused growth strategies in the business. Agents in feeder markets, agents who work a different specialty or price point, agents who are winding down and need a trusted colleague to hand clients to — these are all legitimate, compliant referral sources that cost nothing but relationship-building.
A note on working with lenders, attorneys, and title reps. You’ll hear a lot of advice about “partnering with your lender” or building reciprocal referral loops with settlement service providers. Proceed carefully here. RESPA Section 8 prohibits giving or receiving anything of value in exchange for referrals involving mortgage, title, or escrow services. You can absolutely build genuine professional relationships with these partners — co-presenting educational content, being a reliable and communicative transaction partner, showing up to the same professional events. But a formalized exchange where referrals flow in both directions with anything of value attached crosses a legal line. When in doubt, run it by your broker before you structure anything.
The One Case Where Buying Leads Makes Sense
There is a narrow scenario where paid leads are worth considering: you’re new to a market with little existing sphere, you have the capital to sustain 6–12 months of low conversion rates, and you have the follow-up infrastructure — a real CRM, a consistent contact cadence, fast response times — to actually work cold leads. That’s a specific situation, and if it describes you, go in clear-eyed about the math.
For everyone else, the NAR data has already answered the question. Relationship business compounds. Paid lead business evaporates the moment you stop paying.
The agents generating 70% of their volume from people who already know them didn’t buy their way there. They built something over time that no platform can replicate or take away.
That’s the business worth building.
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Beyond the Transaction: How Real Estate Agents Build Relationships That Last a Lifetime
If you’ve considered the data and want to evaluate lead platforms anyway, here’s an honest breakdown of what’s available and what each one actually costs.
Should Real Estate Agents Buy Leads? How to Decide
All statistics from the 2025 NAR Member Profile, based on 2024 transaction data. Survey conducted March 2025 with 4,947 NAR members. Zillow lead cost estimates reflect recent industry reporting and vary significantly by market. This post does not constitute legal advice — consult your broker regarding RESPA compliance and referral fee arrangements in your state.
