The Internet is a sea of information. There is an answer to almost any question one could think to ask.

Unfortunately, as with anything as big as the Internet or the sea, there can be pitfalls — and pirates.

The Internet is integrated into our lives more and more each day. It has become more natural to use it for anything and everything. It has earned our trust — for the most part.

This trust is very evident when it comes to the largest investment most people will ever make: their home. A homebuyer leaps on a computer to look at homes. Alas! The buyer has found one that warrants more investigation.

The buyer blindly fills out the information request, giving a name, email address and phone number. Buyers are not sure where the request will land but are confident that someone who knows something about the home will get back to them.

In the same vein, a prospective home seller starts looking for a real estate agent to list and sell their home. They may end up looking at websites that rate agents. Several Realtor selections come to the surface, so they fill out the information box on the website and wait for the phone to ring.

They may even call the number associated with the particular agent of their choosing. In doing so, someone answers the phone — but it is not the agent listed on the site.

These hypothetical clients have fallen prey to the real estate “lead pirates” by giving out personal information.

Lead pirates are companies, agents and brokerages that may sell nothing at all. They are looking for a referral fee. They strategically set themselves up at the top of Google searches. They also use paid placement in the ad section of the Google search.

The lead pirates like to buy space at the top of Web searches to entice buyers and sellers into contacting them.

They are also very proficient at optimizing their placement on searches (also known as search engine optimization, or SEO).

Once the buyer or seller contacts the lead pirate, the pirate calls an agent in the area where the prospective client is looking for a home and offers the client to you! In this case, you are the lead. This referral comes at a cost to the agent of up to a 35 percent cut of the agent’s commission.

That one ill-directed email or phone call could cost agents dearly. In the real world, less commission could mean less service.

The buyer may get a call back from an agent who may or may not be the listing agent for the property. Worse yet, the website the buyer visited may be based in Texas when they are looking for homes in Pennsylvania.

The same is true for the prospective home seller, but the impact may be even greater. A seller who agrees to pay an agent 6 percent for services would like to believe he is getting good value. It is likely that the agent will have to split the commission with another brokerage that sells the home.

Using this scenario, the seller’s agent would get 3 percent commission. After the lead pirates take a referral fee, this gets cut down to 2 percent.

Now, the seller’s agent, understanding that this may be the case, may not spend the dollars required to market the property adequately.

Most real estate agents are not opposed to giving a referral fee for a good customer lead, especially when there is a true relationship between the referrer and customer.

The issue is transparency. Pirates tend to be more opaque than transparent. Arrghhhh!

Knowledge is power!

Jeffrey Hogue is the owner of Weichert Realtors Neighborhood One. You can follow Hogue on his blog at or on Twitter.

Email Jeffrey Hogue.

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