Working out whether a year at $700 a month with a lead generation agency actually paid off.

I'll ask the dumb one first. When he says 486 leads, does that mean 486 humans who said they'd consider selling, or 486 form fills including wrong numbers and people who typed in a fake name? Those are wildly different denominators and agencies report the second one because it's bigger.

The first question @jessreyes12 asked is the right one. Until that is answered, the 486 is noise. Here is what stands out in the numbers as given. $32,400 for 4 acquisitions is $8,100 each. On a small rental where the claim is $30,000 to $50,000 of created equity, $8,100 of acquisition cost is defensible. It is an acquisition expense, the same as a wholesale fee, and it belongs inside the deal underwriting rather than in a separate marketing budget that gets approved or declined on its own. The part worth pushing on is that two came from a wholesaler he already knew. That means the agency delivered 2 houses for $32,400, or $16,200 each, and the other two cost whatever the wholesale fee was. Compare $16,200 to a typical wholesale fee on that size house. If wholesale fees in his market run $8,000 to $12,000, the agency is losing on a per deal basis and he is asking for more money. Ask him for the 4 deals side by side with all in acquisition cost attributed to each. If he cannot produce that, the budget increase is a feeling.

The six months with no agency idea sounds clean and it is riskier than it looks. Turning off paid search doesn't just pause the leads. The account loses whatever it learned and you pay to relearn it. If you want a test, cut the budget rather than zero it.

Whatever your arrangement with him says about marketing spend, read it again before this conversation. A line item you fund without approval rights is a different thing from a shared expense you both authorize, and which one you have decides whether you are negotiating or simply being informed. Ask him to put the year two budget in writing as an amendment either way, and if the arrangement involves pooled money from other people there are securities questions that need a licensed attorney rather than a forum thread.

What makes 486 leads against 4 closings anything other than poor? That is under 1 percent.

A seller lead is not a buyer walking into a store. Most cold seller leads are people testing what their house is worth, and the large majority were never selling to anyone. A conversion rate under one percent on cold seller leads is within the normal band. Four purchases out of 486 leads, with two attributable to a different source, is the weaker signal here, not the low conversion rate itself.

I run thin margins and I'd take that $8,100 all day if the equity claim is real. The equity claim isn't real until something sells or gets appraised, which @priya_n21 already said. So you have an agency cost you can measure and a benefit you can't. That asymmetry is the whole problem, not the lead count.

I'd tell him yes to $3,500 with a written cap and a monthly report that shows attribution per deal. If he balks at attribution he already knows the answer.

@hannah_west29's side by side is the one thing worth insisting on. Everything else in this thread is arguing about a number nobody has yet. And @priya_n21, the boring reading is that marketing spend went unmeasured for a year without anyone knowing what a lead was. Fix that before fixing the budget.