| The purpose of prospecting is to develop prospective | | | | contact-to-contract cycle than others, therefore |
| clients for your business. The real estate prospecting | | | | delivering a greater return on time investment and |
| process involves two-steps. | | | | higher value to your business. In order, here are the |
| 1. Identify and create leads by establishing contact with | | | | factors that most influence the value of your |
| people who have interest in what you are offering and | | | | prospecting approaches: |
| the ability to become clients. | | | | 1. Past Clients. The highest-value form of prospecting is |
| 2. Secure a face-to-face appointment for a | | | | calling past clients and those in your direct sphere of |
| pre-determined time in the future. | | | | influence. These people have either used your |
| Realtors seek two categories of clients: Sellers, who | | | | services in the past or know you and your character. |
| become listing clients and buyers, who become real | | | | Asking them to do business with you again is |
| estate purchasers. The following sections provide tips | | | | described as canvassing. Asking them to refer their |
| on how to prospect for clients in each group. | | | | friends is described as prospecting for referrals. |
| Prospecting for listings | | | | These calls are the easiest to make because they |
| Listing leads come from past clients, those in your | | | | reach those with whom you have established |
| sphere of influence, expired listings, FSBO conversions, | | | | relationships. Typically, Realtors experience less |
| open houses, lead cultivation, and door knocking - but | | | | resistance when placing calls to this group than to any |
| they rarely come without some effort, and here's why. | | | | other. They also make the calls with high expectations |
| The tendency when people are sending you referrals | | | | that their efforts will generate leads. How long it takes |
| is to send you prospective buyers. The public's | | | | to acquire leads using this approach varies greatly. |
| perception is that Realtors sell houses; that we put | | | | You could secure a lead on your very first call or on |
| people in our cars and drive them around and find | | | | your 100th call, so the ratio of leads generated to time |
| them a home to buy. | | | | invested is difficult to anticipate. |
| To generate listing leads, you have to do some pretty | | | | 2. Expireds. I could make a case for this being the #1 |
| active prospecting work:o Listing referrals do not come | | | | highest-value prospecting approach, as well, due to the |
| naturally. Specifically ask those within your sphere of | | | | ease of locating expired listings and the relatively quick |
| influence, your circle of past clients, or your referral | | | | contact-to-contract cycle. Expired listings come up in |
| groups to share the names of people who need or | | | | the MLS daily, along with all the information you need |
| want to sell real estate.o To achieve a greater listing | | | | to make the contact. Many go back on the market |
| inventory and develop a specialty as a listing agent, | | | | with another agent within a week, so the sales cycle is |
| cultivate listing prospects by working expired and | | | | short, which is a key reasons that expireds offer such |
| FSBO listings.o To prioritize your efforts, follow the | | | | a high rate of return for the effort. |
| Prospecting Hierarchy of Value for help assessing | | | | Few agents engage in calling expireds, largely because |
| which sources of listing leads are the most productive | | | | the sellers, who have not experienced success with |
| for your business. | | | | their last agents, can be hostile toward new agents, as |
| Prospecting for buyers | | | | well. Many agents feel "it's beneath them" to contact |
| Prospecting for buyers is easier than prospecting for | | | | these prospects - which further contributes to the |
| listings, partly because referrals arrive more naturally, | | | | opportunity for the ones who do. |
| and partly because open houses attract prospective | | | | 3. FSBOs. Converting for sale by owner contracts |
| buyers and provide you with such a great prospecting | | | | requires more work than securing expired listings. You |
| platform. | | | | have to seek them out through newspaper ads or |
| If you are short on buyer prospects, increase the | | | | FSBO subscription services like Landvoice. Once you |
| frequency of your open houses. The type of houses | | | | target a FSBO property, figuring out whom to call |
| you choose to show will determine the kinds of | | | | takes another round of effort, which is why FSBOs |
| prospects you generate. Obviously, higher priced and | | | | are further down the value hierarchy than past clients, |
| more exclusive properties draw more discerning buyer | | | | those in your sphere, or expireds. |
| prospects, while lower priced properties attract less | | | | The sales cycle for FSBOs is four to five weeks on |
| affluent prospects. | | | | average. FSBO sellers generally try to sell by |
| To build your business quickly, work to generate leads | | | | themselves for that time frame before engaging the |
| from more first-time home buyers by planning more | | | | services of a real estate agent. Over that period, you |
| open houses in the low range of your marketplace. | | | | must be willing to do lead follow-up weekly in order to |
| The benefits of developing first-time buyer prospects | | | | secure an appointment four to five weeks away. |
| include:o First-time buyers can be sold into homes | | | | 4. Open Houses and Door Knocking. These |
| quickly, as they aren't burdened with the need to sell | | | | face-to-face techniques provide greater time |
| homes in order to make purchases possible.o They | | | | investment than phone contacts, simply because you |
| lack experience with other Realtors. They do not have | | | | can't see as many people face-to-face as you can |
| current agent affiliations, nor do they approach a new | | | | speak with over the phone. The advantage: It's harder |
| Realtor relationship with baggage that may have been | | | | for people to reject you face-to-face. |
| acquired from a less-than-stellar past experience.o | | | | 5. Cold Calling. This technique, tried and true since the |
| They acquire strong loyalty when good service is | | | | advent of the phone, has lost effectiveness over the |
| rendered, allowing you to establish a long-term | | | | years due to the preponderance of two-income, busy |
| relationship that may span 10-15 years and multiple | | | | families and the onset of No-Call laws. But there are |
| home sales and purchases over that period.o They | | | | agents who still make money, and a lot of it, cold |
| provide you with an opportunity to establish | | | | calling. It is not something I recommend highly, since |
| relationships with their friends who are also considering | | | | there are so many other techniques that provide |
| first-time purchases.o To prioritize your efforts, follow | | | | higher returns with less effort. It is, however, better |
| the Prospecting Hierarchy of Value for help assessing | | | | than waiting for the phone to ring |
| which sources of buyer leads are the most productive | | | | Following these tips on how to prospect for seller and |
| for your business. | | | | buyer clients will help you maximize your efforts, thus |
| The Prospecting Hierarchy of Value | | | | delivering a greater return on time investment and |
| In prospecting, some approaches involve a shorter | | | | higher value to your business. |