You get a call or an email or maybe even a handwritten letter with questions like, “Can I see the property at 123 Main Street?” or “Can I see more photos of this home?”
It’s a contact, a “lead” if you will. Call it whatever you like but one of the first things you need to do is classify that lead, as not all real estate leads are created equal.
Should the person who is looking to buy in the next year be dealt with in the same fashion as someone who just got a job transfer and needs to sell their home within the next month?
Of course not. So why would you add every contact you receive to the same email drip campaign?
You wouldn’t. Classifying real estate leads as cold, warm or hot is one of the fundamental processes in lead conversion.
But how do you know if a real estate is cold, warm or hot?
Ask qualifying questions. Ask open-ended questions. The idea is to have a conversation with the contact to better understand where they are in the home buying or selling process, so you can tailor your future communications to better serve them — and turn that contact into a client.
Here are six questions you can ask a real estate lead to help you determine their time frame and likelihood of buying or selling a home.
1. Why are you thinking about buying (or selling)?
Understanding what is motivating someone to buy or sell a home is a huge factor in determining two critical things — how serious they are, and what their time frame might be.
An answer like, “I don’t know. We’re just kind of tired of the house and are considering moving” shows different motivation than, “Well, we’re pregnant and we need a room for the baby!”
That’s not to say that you should ignore the first answer. Not by any means! It simply means the growing family is probably a “hot” contact while the first example might be “warm.” Or you can rate them on a scale of 1 to 5. Or 1 to 10. A, B and C. Whatever. Pick a categorization system and stick with it. What you call them doesn’t really matter.
Someone serious about buying or selling, and doing it relatively soon, will be able to answer the “Why are you thinking about this” question. Those less serious may not be able to answer.
2. When do you need to buy (or sell)?
Here is another very direct question that can give you a lot of insight about how to classify a contact. Job transfers (or losses), retirement, new children (or children moving out) are all strong motivators and strongly motivated contacts are likely to be “hotter” than those with less motivation.
Again, don’t ignore the lesser motivated; they may very well turn out to be terrific clients down the road. You are just engaging them in a conversation, starting to build a relationship, and gathering info about what your contact needs — and how you can help them.
3. What type of property are you looking for?
Here is a question that will give you a ton of information. (If the contact is a seller, ask them if they are also looking to buy.) Does the contact have a really good idea of what they are looking for? Their answer speaks to their motivation to buy. If the contact is unclear about property requirements, they might not be all that serious.
In addition, does the contact have realistic expectations about the type of property they want to buy? Are they even remotely close to understanding what is available in the market and how much it might cost?
If contacts are looking for specific property types in which you have no experience or expertise, it’s better to find this out right away, saving you both time and frustration. Keep referrals in mind if someone is looking outside your area of expertise.
4. Have you spoken with a lender?
Truly ready and motivated buyers will respond that they have started chatting with a lender, or they will be hungry for more information. Your follow-up question should be “are you pre-approved or pre-qualified?” Be prepared for the contact to not know or not understand the difference. This is an opportunity to build trust in your expertise where — despite not being a lender — you can help them understand the difference between the two, and why it’s such an important part of their home search process.
5. Are you working with another agent?
This question should be asked early in the process. While no real estate lead should be turned away without thought, if you get a contact who answers this question with, “Yes, I have an agent” you’ll need to understand why they are contacting you. “Because I didn’t want to bother my agent” or “I’m looking for homes to share with my agent” ARE leads you should discard immediately. On the other hand, perhaps they are working with an agent but aren’t happy with them, or their agreement with that agent is about to expire. Either way, you need to understand any existing agency relationships the contact might have so you know what your next step should be.
6. When can we meet to discuss your property search (or discuss selling your home)?
Note the question is not, “CAN we meet to discuss…” it’s “When can we meet…”
Asking, “Can we meet to discuss your property search” leaves you wide open to the one response you don’t want to hear — “No.”
Asking WHEN you can meet is probably the definitive question for gauging how serious a contact is. If they aren’t willing to meet, then they can’t be all that serious. Again, this doesn’t necessarily mean you discard the lead. It just means that you’ll need to spend more time cultivating the relationship, working to help them and being ready when they are. If you hear, “As soon as possible!” then you have a smoking hot lead and you need to be prepared to act — NOW!
Categorizing your real estate leads allows you to properly manage the hot, warm and cold leads. As I mentioned a few times, there’s nothing wrong with working cold leads. You most definitely should, as the chilliest of leads eventually turns into one that is on fire. You just need to understand early in the process which bucket a contact falls into — and then manage that bucket appropriately.