How to Qualify Leads in Real Estate

INTRODUCTION Time is money. Benjamin Franklin is credited with saying: “Time is money.” As a real estate agent, it’s worth taking this adage to heart as part of your business development and prospecting strategy. Many agents waste a lot of energy by not investing the time to assess the readiness and urgency of a prospect to move forward. In a way, this is understandable. You work the phones and finally connect with a prospect who seems eager to sell their home. The prospect’s eagerness can be alluring. After all, who wouldn’t like to quickly turn a call into a listing that results in a nice commission check? The problem is that the prospect’s apparent enthusiasm could lead you down a rabbit hole, wasting your time and energy. This post will discuss the critical aspects of real estate lead qualification. The goal of lead qualification is simple: to identify homeowners who have decided to sell and are ready to start the process with you. A critical part of any agent’s job is to learn how to ask pertinent questions that help you get a sense of the prospect’s motivation. And, of course, asking solid questions helps minimize wasted time on your end and informs you as to the prospect’s needs. The following sections of this post will break down the most critical questions you need to address by qualifying your leads. HOW TO QUALIFY REAL ESTATE LEADS Qualifying your leads involves fact-finding and building rapport with the prospect. We can group the fact-finding process into several buckets. Urgency and motivation to sell. It’s important for you to understand how committed the prospect is to selling, as well as their urgency to sell. Here are areas to explore: Why are you thinking of selling your property? Try to uncover their reasons for listing, which might include issues like a desire to downsize, job relocation, financial pressures, change in marital status, or any variety of personal reasons. If the homeowner is not clear on why they want to sell, it means they aren’t ready to sell soon. Do you reside on the property? You’ll want to know if they are selling their residence or an investment property. This will help you gauge their motivation and urgency. How soon would you need to sell your property? Again, this question helps you assess how quickly the homeowner wants to move with the listing process. Are you moving within town or to another city? The answer to this question will tell you a lot about the person’s urgency. If they are relocating, they’ll likely want to move the process along quickly. Are you the decision maker? If you’re working with a married couple, for example, you need to coordinate schedules with two people. If one of them travels on business frequently, that adds another twist to the process. This is also a critical question when working with someone going through a divorce or break-up. Understanding timeline and flexibility. Exploring these questions can reveal potential complexities in a deal. How quickly do you need to sell? A high degree of urgency might suggest the person is more willing to negotiate or price their property more aggressively. Do you have a deadline to sell? Understanding this question can help you prioritize your marketing approach and negotiation parameters. Should we know of any factors that could impact the timeline? This question gets to issues such as potential home renovations, which could set the timeline back by months. Property-related issues. A thorough examination of the property’s condition will help you understand its market value and gauge the need for improvements before listing. How long have you owned the property? This question relates to the amount of equity the owner might have and their level of attachment. What is the condition of the property? Your goal is determining how open and sincere the owner is about their property. If the owner has a dramatically different view of their home's quality, the selling process could get bogged down. Have you recently made any upgrades or renovations? If the owner provides detailed information about what they’ve done to improve the home, you know they are ready to sell. Financial expectations. This line of questioning helps you determine if the owner is realistic about their home’s value in the context of pricing in your market. How much would you like your property to sell for? If the prospect’s estimate of the value of their home is out of range vis-à-vis comparative prices, you’ll need to spend more time educating them and moving them toward a viable price. Do you face any financial challenges that might impact the sale? If the prospect faces financial challenges, you might need to move the sale along faster. It’s essential to get an honest assessment of their financial situation. Have you had a recent appraisal of your property? This question provides insights into the degree to which the prospect is informed about their property. Would you be ready to move for the right amount of money today? This is a very important question. If the prospect is not ready to move, you may be looking at a drawn-out process. Therefore, this question speaks to urgency but is framed in the context of financial return. REAL ESTATE LEAD QUALIFICATION: BEHAVIORAL SIGNS We reviewed tactical questions for qualifying real estate leads in the previous section. But when meeting with a prospect or having a Zoom video call, behavioral signs can indicate how the person is actually feeling and help you gauge how invested they are in moving forward. Below, we break these behavior signs into three categories. Positive behavior signs. Body language: Maintaining eye contact, nodding, and leaning toward you indicate comfort with talking to you and interest in what you have to say. Asking detailed, specific questions about the process suggests the prospect is actively engaged in working with you. The prospect’s willingness to share personal information indicates an important level of trust with you. An enthusiastic tone of voice and high energy suggests the prospect is emotionally invested in the process. Neutral behavioral signs. Delays or pauses in answering questions indicate a degree of uncertainty about the process. Vague or uncommitted responses (i.e., “I’m not sure”) suggest that the prospect is not engaged in moving forward. Changing the subject to minor or unrelated topics displays a sense of discomfort with Negative behavioral signs. Closed-off body language (arm crossed, avoiding eye contact) indicates discomfort in the process or a lack of trust. Unwillingness to answer direct questions indicates reluctance or lack of preparedness. Conflicting information (saying they’re ready to buy but bemoaning their financial situation) suggests a lack of clarity or fear in moving forward. Disengagement or distracted behaviors (checking phone, one-word answers) suggest that the prospect isn’t really ready to sell or is fearful of starting the process. We don’t often give sufficient weight to how our prospects behave. However, awareness of the behavior traits outlined above can go a long way to helping you honestly gauge a prospect’s level of interest in moving forward. SUPERIOR REAL ESTATE LEADS MATTER The Vulcan7 difference. As we stated at the outset of this post, many real estate agents waste time and energy by working with unqualified leads. Hopefully, the tips outlined above will help as you assess the readiness of your prospects to move forward with a listing. Of course, one of the best strategies for success is to work with a leader in real estate lead generation. Since 2011, many of the top-producing agents in our industry have turned to Vulcan7 as the foundation of their prospecting efforts. Here are three reasons why: Vulcan7 delivers the BEST REAL ESTATE LEADS in the business to your desktop every morning, starting with the most accurate data available for expireds, FSBOs, FRBOs and pre-foreclosure leads. Vulcan7’s best-in-class CRM (Customer Relationship Management) software simplifies lead follow-up, which is essential as you go through the qualification process with your prospects. We know how challenging it can be for an agent to make their mark in our highly competitive industry. That’s why Vulcan7 is heavily invested in building community, so you are never alone as you march toward achieving your goals. Long-running weekly webinars like Roadmap provide real-world advice from the industry’s top earners. If you’d like to learn more about Vulcan7, CONTACT US HERE.