As we all prepare for the changes triggered by the proposed NAR settlement, there is another, less popularized shift in our regulatory environment that may not be on everyone’s radar yet. Here’s the other development that will impact how some of Realtors generate business: a recent FCC ruling affecting lead aggregators like Zillow, Homelight, and Fast Expert.

Understanding the FCC’s New Ruling

The FCC recently passed regulation that changes the way leads can be sold, specifically targeting practices that might be deemed as overwhelming to consumers. Previously, mortgage and insurance lead generation platforms (like LendingTree in the mortgage space) could sell a consumer’s (lead’s) contact details to numerous service providers. This is a highly profitable business model for these lead portals: they spend money to generate one lead, but  can then sell that lead 20, 30, even 40 times to different service providers. Unfortunately, this practice resulted in potential customers getting blown up on the phone by sometimes dozens of competing service providers.. However, coming this June, these platforms will be required by the FCC to sell one consumer’s information to only one service provider. This has big implications for lead aggregator platforms.

Implications for Real Estate Professionals

What does this mean for us in real estate? The portals we use to acquire leads may have been engaging in similar practices—selling one consumer’s contact information to multiple Realtors. With the new FCC guideline, this business model for the lead aggregators is no longer viable. The direct consequence for Realtors is clear: the cost per lead will likely increase significantly on these platforms as they can no longer sell and distribute the same lead multiple times. Many of these platforms are already expensive, charging heavy advertising fees or asking for high referral fees on the backend … and they will most likely be raising prices with this new change!

Strategies Moving Forward

1. Rethink Your Lead Generation Strategy: With lead costs anticipated to rise for portal-sourced leads, it’s time to reconsider how dependent you are on these purchased leads. This change is an excellent prompt to diversify your lead generation strategies.

2. Enhance Relationships with Your Sphere: The most reliable leads almost always come from people who already know, trust, and respect your work. Strengthening your relationships with your sphere—friends, family, past clients, and acquaintances—is more crucial than ever. These relationships are not only cost-effective, but also typically result in higher quality leads.

3. Explore Alternative Lead Sources: Investigate other avenues for generating leads that don’t rely on third-party aggregators. This could include enhancing your presence on social media, increasing your community involvement, or investing in your own website’s SEO to attract direct inquiries.

Prepare for the Changes

As these new regulations take effect, the landscape of lead generation will inevitably shift. If a significant part of your business relies on leads generated from lead aggregators, now is the time to adapt and identify some alternate lead sources. Focusing more on sphere is always the most cost-effective way to generate leads. If you are looking to shift some of your marketing budget, consider the long-term investment of farming. Looking for a more direct return on your marketing dollar? Consider a pay-per-click lead generation strategy.

Have questions or need advice on adapting your business model? Don’t hesitate to reach out!