This post is short--to the point and meant to wake up those who still think that paying for leads is an acceptable practice:

QUESTION: What is wrong with paying money to get leads? Why not take advantage, in my marketing plan to pay more money than the competition to get all the phone calls? Why not sign up to appear as a face on a national website? I will surely make more money than the next guy, right?

ANSWER: That is the objective!! That is how those listing platforms get the big $$!! By forsaking the idea of becoming the most informed agent by reaching out to those homeowners and buyers who want a local expert (or at least an informed agent!) "why not just sit back and let all those goodies come to me by paying big $$ for it?" 

That THINKING is undermining the very reason for our existence. 

It informs the public that we are not really good people or professionals looking to serve the public for the better good! It tells them that those "creepy agents" are only interested in their commissions! Can't you see that??? Why is this so hard to understand? The whole concept of "Pay to Play" came about through the workings of a crooked way of thinking--and it is our doom!

You need to understand the reason why we are licensed--We have a duty to fairness in dealing with the public and fiduciary responsibility to our clients. It is that simple. If we are "Paying to Play" in real estate, we forgo all of the non-technical interaction with the public and we become just another "face" in a sea of unfamiliar people who are trying to "out-pay" our competition TO GET BIGGER COMMISSIONS! As licensed real estate professionals we are quickly becoming a dying breed---and deservedly so!

Who would hire such a person??? 





                                     **ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY.  The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate


Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005


Click here to see my Hampton's website to see all my listings; please email me or call me for all your real estate needs in Southampton, Bridgehampton and Watermill:



Comment balloon 30 commentsPaula Hathaway, REALTOR, LBA • May 17 2019 12:09PM


Good morning Paula. I share your thinking and never understood it either.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) over 1 year ago

Good morning Sheila: Thanks for reading and commenting--I have had it! I can't for the life of me understand what is so hard to comprehend...We have a community here that is suffering and I mean EVERYBODY! Homeowners, landlords, agents...everybody! Thank you for really getting "it"!

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago


It is a double edge sword.  A few years back I remember that your firm made a deal with Z to have their listings on their with the listing agent face only.  So technically you should be getting leads also and not pay for them   Now, as a broker and can send you a bonafide lead and you pay me for a referral fee, if you find them a home and they buy...Are you not paying me for that lead?  

I agree with you that on the issue, but I do know an agent who is a real expert who pays  big bucks every month and gets leads and does well...I think that the industry needs to re-examine their models.  


Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) over 1 year ago

Hi Alexandra: Thanks for this input--glad you mentioned what my company did a few years back---they "partnered" with Z /and the agents threw a fit--I was the most vociferous and blogged about it at the time. Well, as I told them: "You need to be careful with this company; they have already stated their goal to put all brokerages out  of business!" --that fell on deaf ears and sure enough I became a "Hero" (tongue in cheek) because I was the one who brought it to every-ones attention...but the only problem? NO ONE PAID ANY ATTENTION; in fact  I was pilloried for my outspokenness at the time!  Fast forward: Today, Z has bought out all the listing platforms including our internal system here in the Hamptons and Manhattan!! So guess what? We are now in real trouble. BTW, I never got calls from our website either--the whole deal Z had with DE was a scam just to get our content--our listings! That's  what is so infuriating--Agents continue to believe that if "I can just pay them enough" then I will get all the calls!" Hey--IT NEVER HAPPENS!  The minute you think it does work--they got you! I liken it to the "High" that a drug addict gets when they first try a new drug--"I have never had such a good feeling" and they are trapped by that drug, until it kills them--That is the only escape; the only one, unless YOU WAKE UP and see that that thing that made you feel so good??? Well, it is killing you (your business)!!This market is d-e-a-d, dead! It would be interesting to be a fly on the wall and see how well that expert agent is really doing...and who they are really geting their listings/sales from.

Now to your question--A referral fee is a referral fee--you are being referred a customer because you are the local expert in your market. It is not a lead because that customer is really the referring agents customer... Referrals have been around ever since the licensing of agents began--and it has always worked! Thanks for opening up the dialogue.

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

"Why is it so hard to understand?"  Because maybe your point isn't actually on point.

It would appear you assume that just because someone chooses advertising with Z, or or Trulia as part of their business plan that they can't ALSO be a competent, informed agent who looks out for the fiduciary responsibilities they have for their clients.

I know a number of agents who DO advertise on Z, and I'd trust them with my friends and family in a heartbeat.  Z advertising isn't ALL they do, it's just a part of their lead gen program and I've known these people via the Rain, met some in person and they have my full trust.

And why would the consumer choose those who aren't the listing agent?  Because perhaps they DO understand fiduciary and know the listing agent works for the seller and not them.  And they can look at the dozens and dozens of reviews next to the advertising agent's name and see EXACTLY what their peers think of that agent. 

Disclosure:  I don't advertise with any portal, I'm not part of any advisory group, but do believe that each agent should be able to choose their own business paths, even if it's not one I'd ever choose.   Bill

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 over 1 year ago

HI Paula- I don't understand all of the aspects of this but I've been here long enough and read enough posts to know it's not good. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) over 1 year ago

I hear you.  I won't pay for leads from any of those blood sucking companies. If I can't get leads on my own there is something wrong.

Posted by Georgie Hunter R(S) 58089, Maui Real Estate sales and lifestyle info (Hawai'i Life Real Estate Brokers) over 1 year ago

Bill: Wow--what possessed you to try to change my mind??? My point is exactly what it is--you can't make my point!  Sorry, but I have seen what the public wants when they shop on Zillow and it is not the expensive homes here in the Hamptons--The Hamptons buyer is already lined up with agents who they have chosen to work with for years--they have bought houses before with the same agents and do not want to deal with new agents.  So, the one who is spending all that money for "leads", hoping for the "big one" is getting bupkiss. The agent who gets business off Zillow gets his/her business from the markets West of here and that is a recognized fact--entirely different marketplaces and they do very well. More power to them! My point is and always has been that agents who "Pay-to-Play" are different from the agents who work hard to get their own leads. New agents don't get that yet--They just need to get business coming in.  "Mature" agents who are doing it are merely looking for an easy way to get leads. It's that simple--no character assassination on my part, as you are inferring here.

I have never suggested that I know what business path an agent should pick--they have always done what they want--I have nothing to say about that.

I will, however, express my opinion as to what I see happening in my marketplace and I will express it where ever and whenever I choose. I can also spot trends and freely express how I see those trends--it's what I do.  Agents from nearby markets West of here who have a deep resentment about the business they perceive they are missing out on here in the Hamptons are the ones you need to talk to... Oh, and one other thing, phony reviews are rampant on these platforms--you think just anybody can go on Z and give an honest opinion??? Those reviews you see come only from the agents best bets--You have to be invited to write a review and to get a review to appear on Z, in case you didn't know...and BTW, a big part of our responsibility to the public is to fully understand a marketplace and all its vagaries in order to ethically sell and list properties within it.  Thank you for your valuable input here...

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

Hi Kathy: Thanks for reading and bearing with me on all of it--It is a tough one to convey--there is still a big resistance to the idea that by "Paying to-Play" one is really removing the process that bonds agent to buyer or seller. The relationship that comes out of that process is never gained because the process itself is missing. Regardless, I appreciate that you see what is so is NOT good.

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

Hi Georgia: Bless you for your cognition!! You fully understand what "Pay-to-Play" really means! I think it is only fair that we keep those who do not yet fully comprehend what happens with that particular way of doing business in our hearts--one day they will get it; of that I am certain!

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

Long response deleted. 

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 over 1 year ago

I appreciate your passion about this topic and agree with the basic premise. In our market, many of the new hotshots in the market have been around less than 5 years, and brag about their leads and business volume. They claim Zillow works ( it must for them?) and I do see their fresh little faces all over it. In fact, I had one arrogant little twerp ask me how many transactions I close a year - when I replied, his response was "is that all?"  I explained that we actually limit our business as we offer a very high level of service to our clients.  Bla bla bla. Honey badger didn't give a s&@#.

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) over 1 year ago

Hi Debb: That is so funny! I find the same thing here--however, those shiny faces no longer have the smile that used to accompany the eager response--now it is tears for all the money spent on Z during one of the slowest markets in memory!! You can't MAKE a buyer buy a house!! You can pay big $$ all day long but as you well know, in a down market very little sells--unless you have a following of loyal buyers and sellers who know you well and respect you enough to continue using your valuable services! Thanks for sharing your experience! 

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

I’ve seen this happen before and it’s good to be able to adapt and handle it as you can in the moment

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 1 year ago

Paula Hathaway, REALTOR, LBA We all get in that place where that can happen but it’s all the adaptability.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 1 year ago

Paula Hathaway, REALTOR, LBA I've been preaching your argument for many, many years.

But, I've found that there are a FAR greater numbers of greedy real estate agents than those who take their role as professionals seriously.

This is why the residential real estate brokerage industry is doomed to become virtually extinct within the next 5+/- years.

Yes. There will ALWAYS be those who will need a professional real estate agent. But, those numbers are shrinking and they're shrinking rapidly.

So, when I say the residential brokerage business will become "virtually extinct," what I mean is that the number of active, productive agents will be cut by more than 1/2 their current numbers.

Posted by Ken Jones, Real Estate Trainer & Consultant (Ken Jones Real Estate Advisor) over 1 year ago

Paying for leads somehow reminds me of the bounty hunters of the wild west who were not very well received but tolerated...Money driven dynamics? COLD

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 1 year ago

Hi Laura: "Adapt" or be left behind--Is that your suggestion? I don't agree, Laura. Adapting is one thing but to intentionally continue to "Pay to Play" is downright suicidal, IMHO...We are a good example of that right here in the Hamptons. There is just a handful who continue to pay--those agents are now in the position of paying thousands a month (Some say $6K) and they are not making any money--they haven't made any substantial income for months now and we don't know for how much longer this downturn will last....You tell me what is going to happen to them. Meanwhile, Z is contacting the same clients and customers directly. I liken it to a retailer who is loyally carrying a line of clothing while the clothing manufacturer is out there undercutting the retailer online....It never lasts! Someone is getting hurt and it isn't the manufacturer! Thanks for opening up the conversation....

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

Hi Ken: I totally agree--the agents who survive will be the ones who, with nose to the grindstone, continue to plug away and continue to work hard to get listings and to attract buyers...The others will "Pay to Play" until they go bankrupt or until they get other jobs! There is no way this business can be sustained the way they are going...I also agree that brokerages will be out of business in 5-6, years if it even takes that long! thanks for your valuable input here!

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

Richie: You are so accurate in your analogy! This is a dog eat dog business anyway--to add to that the likes of the big Z and you have a predictable demise...of someone! Here, it is the agent; next, it is the agency! After that, there will be calm in the street with dead bodies lining the thoroughfare! I can guarantee those bodies are not from Z, T or even R! "The Loss of (not-so) Innocence"

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

I agree with your views on this 100%, Paula!  By paying to play, we are feeding the beast!

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 1 year ago

Myrl: You can say that again! Feeding that beast is the thing that has always gotten to me--it is such a good analogy yet those who do pay look the other way when it is mentioned! I do have a few agents who have come to me to tell me that they have stopped paying and it is the higher paying agents as well...they get "it"...


Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

Not an association we want as Premiere, Featured yadda yadda from the same folks who change the "valuations" daily...sigh

Posted by Sally K. & David L. Hanson, WI Real Estate Agents - Luxury - Divorce (EXP Realty 414-525-0563) over 1 year ago

Some win, some lose, Some people will work with the first agent to call them. Some of those paying Zillow the most are making a very good living, others not so much.


Posted by Michael Eisenberg, Bellingham Real Estate Guy (eXp Realty) over 1 year ago

Hi Sally and David: Thanks for reading and commenting here...Some people will never get that they are destroying our reputation by continuing to pay the beast...those are the ones who will one day wake up without a source of income and feel so sad that they shelled out the fortune to the one who destroyed their livelihood! They are literally paying them to do it!

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

Michael: Sorry to say that here in this market I am watching as agents lose their houses and fall into poverty...either that or they are leaving for a paying job, having given up the ghost..leaving a shambles behind them--those are the agents who only paid for leads--never learned the research necessary to get the leads on their own. It's like a child who was never given the chance to learn things on their own--always had a parent who stepped in and bailed them out of everything! Such a shame but they have brought it upon themselves...I swear I am witnessing a new effort for agents who have never figured out how to determine the market value of a property or learned how to figure out setbacks and lot coverage etc, suddenly taking a new interest and needing guidance to do it right...SAD! These same agents paid for years, as newbies, for their leads and took the Z estimates as gospel--sold their clients down the river, because I swear, those houses that they sold at the distorted higher prices now sit--the owners can't afford to maintain them and the price they paid will come back to even only after another 10 years or is nuts here! Prices have come down 20-30-% and they STILL sit! 

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

My career before real estate was in office supplies, both commercial and retail. In the 90's we began to see the arrival of the "category killers," such as Office Depot, Office Max, and Staples. Their model was raise investor capitol, underprice the competition, which drove their competition out of business. With huge market share and competition gone, prices were raised back up.

Similar to Amazon, who showed no profit for years and years. Use investor capitol to expand rapidly and cover your loses. Don't make money at first, just grow fast and big. The one with the most market share wins and this massive size stops potential competitors from entering the market.  

Sounds like just like Zillow right? Leverage investor capitol, grab all the market share (monthly visitors) you can while losing money. Once you buy up/scare off competitors and dominate the market, well, you can call the shots. 

Your passion is evident and appreciated Paula. The brokerage model and our industry is on the cusp much, much more (and accelerating) change.  


Posted by John Van Hogen, Serving Sellers / Buyers / Investors 503-680-9390 (Keller Williams Realty Professionals) over 1 year ago

Hi John: You gave me quite a chill--Yes it does sound just like Zillow!! The fact that I have been saying this to the real estate community since the beginning is the worst part for me because NO ONE listened to me! I did not get my point across and that is killing me! I have been blogging and telling the real estate market nationwide what was coming--how did I know? Because they made that their mission statement---"To put all brokerages out of business"...No hiding the fact--it was stated up front as they opened in 2007--as they sold off EXPEDIA to the highest bidder, making their fortune that put them in the position to do just what they are doing today! It is the scariest thing I have ever witnessed! Thank you so much for your valuable input here, John. I totally agree that we are on the cusp and it is not comfortable--I speak to my fellow agents every day and it is amazing how they respond--some shrug it off (those are the ones addicted to the lead generating machine that just kicks out fake leads, garbage that makes it LOOK like they are giving you what you paid for; but it really isn't!) and some are as incensed as I am....but it is now just so much noise--meaning nothing! I am afraid it is too late--we need to put our thinking caps on because I truly believe that Z will get its comeuppance in the end and will fade away because of inadequate knowledge. We have to be ready--our companies must change course and design local-focused, agent focused branding that cannot compete with Z and R and any other listing platform bent on destroying something as complex as real estate transactions...!!

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago

From someone on the outside looking in, and as a Virtual Assistant who has worked with many real estate professionals, I think the issue is that many agents don't feel they have the time or expertise to adequately market themselves, their knowledge, or their experience. As such, many agents feel that their best bet is to pay for lead generation. There are much better ways to spend your money on marketing your business!

Posted by Renae Bolton, I'm your Professional Real Estate Marketing VA! (Marketing 4 Realtors) over 1 year ago

Hi Renae: I have found that there are 2 types of agents who buy leads:

  • Newbies, just to get their phone to ring and
  • established agents who think they are missing out on business and are too lazy to do the hard work.
  • Just MHO

Thanks for reading and commenting!

Posted by Paula Hathaway, REALTOR, LBA, ...A Local Expert in all The Hamptons (Douglas Elliman Real Estate) over 1 year ago