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Frequently Asked Questions (F.A.Q.)
> Return on Investment (ROI); What to expect
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LendingCenter.com
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Arizona
Return on Investment (ROI); What to expect
Many lead sites make claims of a percentage of how many leads will turn into loans. We have heard of some sites that claim 15% or better. That would lead the buyer of these leads to assume that if you purchased 100 leads, 15% of them (15) would turn into loans. We have found through our research and follow up of our best clients that this is a false promise.
Through our research, we have found that the average commission expected on a closed loan to be between $3000 - $4000 dollars. That would mean that the person buying leads would expect to make $45,000 in commissions for a $1500 ($15 per lead X 100) investment. The ACTUAL rate of return on that is 96% ROI.
Not only is this not realistic, but it is near impossible. With the market saturation and competition in the marketplace, a LO or Broker should keep things in perspective.
If one is buying leads online, the LO or Broker should have realistic expectations of what those leads will produce. In this market, our most successful and consistent clients are volume buyers. They know that it takes more than a few hundred dollars to turn leads into loans.
As an LO or Broker, you have to ask yourself this question. How much would you be willing to spend to close 5 loans. How many leads would you consider buying?
The industry has changed and we need to change with it. We need to be realistic of what our expectations are and decide if buying leads is a viable choice to pursue a career in lending.
LendingCenter.com Sales Team
9/2/2009 00:00
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