IMOs that 'provide free leads': what the free leads cost, and how to read that contract

The recruiting ad says free leads. Sometimes it's a fair deal. Here's how to tell, before you sign a contract that's hard to leave.

Where the money comes from. Nobody gives away leads. The cost is in the contract level: an agency that provides leads usually contracts you lower than one that doesn't. That's a legitimate trade if the leads are good and the spread is honest. Ask for the contract level with leads and without, side by side.

Who owns the leads. If you leave, do the leads leave with you? Usually not. Do the clients you wrote from them stay yours? Read the section on the book of business and the release.

What 'free' leads tend to be. Aged, shared, or recycled from agents who left. Not always. Ask for the source and the age, and ask to see a sample.

The math to run. Take a month of the free leads at the lower contract and a month of bought leads at the higher contract, at your close rate, and compare what's left after lead cost and chargebacks. Most agents who run it find the free leads are a good deal for the first ninety days and a bad one after that.

The release. The whole question is moot if you can't leave. Read the release clause before anything else in the agreement. The contracting room has a thread on exactly that.

If you took a free-lead contract, post how it went and what you'd do differently.