The real estate industry has moved into the internet arena, and cyber space has become a viable tool for shopping for one's dream home. Many buyers are utilizing the web to research their potential purchases from the comforts of home. According to studies done by the National Association of Realtors, seventy seven per cent of homebuyers in 2005 researched their purchase via the internet. This increased traffic has opened the door for real estate lead generation, but is the internet a viable source for real estate leads?

As a real estate agent, solicitations from real estate lead generation companies seem to fill our email servers daily, but are they worth the cost and effort? If you follow a few rules, the answer is yes. Internet leads can be a very profitable source, when pursued with the same diligence one would pursue traditional sources.

Before generating traffic and capturing leads, ask yourself a few questions. First, can I follow-up with the leads provided in a timely fashion. If the answer is no, stop, go no further.

A second study done by the National Association of Realtors, the average response time by an agent for information requested was three days. That's right, on average it took an agent three days to reply to a request for information the agent offered on their website. So, if you can not respond in a timely manner, do not pursue.

Do you have the organizational tools to follow-up? Follow-up is easy when an agent has ten leads, but what about one hundred leads. This is where a database program can be very beneficial. Don't re-invent the wheel. There are many real estate contact databases out there. Find one that is right for you.

Are the leads exclusive? Many lead providers will sell the lead to more than one agent, claiming the agents must be quick in responding to solicit the leads business. The lead generator is doubling their profit, and the lead becomes annoyed very quickly by all the attention from several agents. Therefore, unless the lead is exclusive, do not pursue. If price is the motivating factor, reconsider your motivation as you will get a bum lead for a bum price.

Another great question before getting started, can you contact other agents within the lead generation program for references? Most real estate lead generation companies will provide a list of testimonials provided by agents within the system, follow-up with other agents on the site as well.

What kind of results do you expect? If you are looking a 20-30% close rate, internet leads probably aren't for you. The industry average seems to be about 1% and some companies boast 2-3% with exceptional agents converting 5-10%. I think you will find the return on investment to be exceptional if you convert 5% of your leads.

Finally, what's your time frame? If you need immediate results, keep looking. Internet buyers tend to research homes for 3.7 months before contacting an agent. The good news is that +80% of the time, internet buyers will do business with the first agent they contact.

Moral to the story: internet leads can be an excellent supplement to a healthy business, but patience, organizational skills and realistic expectations are a must.