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How to Qualify Your Prospects before Working with Them
Posted By Paige On August 5, 2008 @ 4:13 PM In Business Development,Coaching | Comments Disabled
By Craig Proctor
RISMEDIA, August 6, 2008-The most effective real estate marketing generates good buyer and seller leads by offering these prospects information they want, and when you include a direct response vehicle (e.g. website or hotline), you have the advantage that they will contact you first to get this information.
In your hotline scripts or website forms, you should be incorporating qualifying information that will help you sort out those who probably don’t have the financial resources to make them good prospects. For example, if your ad offered a special report that was of interest to buyers, at the end of your hotline script you should say something like this:
“To make sure that we send you the right information to help you in your situation, be sure to indicate which report you want to receive:
“If you have a history of good credit, or have greater than $3,000 down, and a combined annual household income of greater than $30,000, ask for Report #1.
“If you have a history of poor credit, or have less than $3,000, or have a combined annual household income of less than $30,000, ask for Report #2″
By structuring your script in this way, you let your hotline automatically do all the work of sorting out those prospects you would rather not spend time on. Most agents who use this type of marketing find that they have so many prospects ask for Report #1 that they rarely take the next step of following up with those who request Report #2 (beyond sending out the report of course).
When you do follow up voice-to-voice with those who have indicated that they have good credit etc., you should explain to them how you can help them find a great home in a great neighborhood that meets their needs for much less than they ever thought possible. Ask them to set up an appointment with you at your office so you can show them how to:
- Get pre-approved for a home loan which will enable them to buy for the least amount of money
- Receive by mail or e-mail pictures and descriptions of homes that match their expressed needs on a regular basis (and then follow through on this)
- Take advantage of these important benefits without paying you a penny (you can explain that a transaction fee will apply for the use of your services only if the buyer buys through another agent)
Only those prospects who are motivated and financially secure will take this step of meeting with you, and these are the only buyer prospects you should be interested in.
Throughout this initial dialogue, you should be trying to assess whether a business partnership with this particular prospect is likely to be profitable for you. The questions you ask them should follow what I call my F-I-R-M formula as follows. You should only agree to work with those buyer prospects who are:
- Financially stable
- Interested in signing a buyer’s agreement
- Realistic in their purchase expectations
- Motivated to purchase a home
Your buyer presentation should be set up to show your buyer prospects how you will benefit them (and to gauge how they will benefit you.) Explain that you will take them through a 3 step process to ensure they get what they want:
STEP 1 – Find out how much home they can afford (by helping them get home loan pre-approval)
STEP 2 – Help them easily find the home of their dreams (by sending them information on homes that match their criteria)
STEP 3 – Help them secure the home they want (by using your knowledge of zero-down programs and of how to optimally prepare, present and negotiate the offer)
Explain the benefits of pre-approval to your prospect in this way. By getting pre-approved:
- They will know exactly how much home they can afford, which will eliminate wasted time looking at homes that are under or over their price range
- They will get the best financing (i.e. the lowest rate, lowest downpayment homeloan and lowest monthly payment, which will allow them to get the most house for their money)
- They will be able to make a stronger offer (i.e. they get the power of immediate action which will allow them to beat out other buyers and negotiate the lowest price and best terms)
Explain how and why it will benefit your prospects to have you email them a list of homes that matches their home-buying criteria. Begin by explaining exactly what the MLS is. This is obvious to you and me, but it’s not obvious to most of your customers.
Tell them that the MLS has information on thousands of homes for sale by all companies, which means that it would be difficult for anyone (buyer or agent) to effectively search through this huge database by hand. Despite this, most agents do try to eyeball this search, and pick out six or eight homes they think the buyer might like (and often try to pressure them into buying.) The chief problem with this method is that the wrong person is deciding which homes the buyer will get to see. In other words, the agent is in control.
By getting your prospects to fill out a form with their exact buying criteria and then using this information to extract homes that match their criteria using a computerized profiling system, you put your clients in control. You will send them matches to their criteria by email each day (or week). For buyers, this means:
- No more searching through the paper for homes because they get automatic access to hot new listings before other buyers
- No more wasted time viewing homes a real estate agent has picked out that don’t interest them (because they only receive homes that match their criteria and can then pick out the ones they want to see.)
- No more pressure because they get to pick out as many homes as they want to see with no pressure to buy
- No more overpaying for the home they want because they are usually the first buyers to see a property which means they can often secure a lower price
Buyers readily grasp how this buyer profiling, in combination with home loan pre-approval and specialized knowledge add up to give them what’s most important to them: i.e. the ability to get the best house they can for the least amount of money.
“Using [the] FIRM formula, my agents and I have increased our productivity many times over,” said Frank Profeta, an agent from Medford, N.Y. “If a prospect doesn’t meet our FIRM criteria, we don’t waste our time with them. This allows us to only spend time working with highly motivated buyers and sellers. Once these motivated prospects are identified, we meet with them and show significantly more value than any other agent in our marketplace, then sign them to a buyer or seller agreement.”
Sonny Bhinder, an agent in Surrey, British Columbia, agreed, adding: “The FIRM formula is so true that it has enabled me to work only with qualified, motivated and ready-to-act buyers. I used to run around with unqualified and unmotivated clients like a chicken without a head, wasting my time showing tons of houses even though I didn’t have the buyer contract signed. Now I first pre-qualify them, get the buyer contract signed and have an exclusive to show them houses. Now I know that the time spent showing homes is not getting wasted.”
“Qualifying your prospects is the single most important action you begin with in order to make yourself the most efficient and effective,” added Raul Pineyro, an agent in Miami. “With an influx of business prospects, you can readily identify those client s that can really benefit from your services. It essential that they understand that you are a professional, and that your services, time, and experience are structured. Qualifying your prospects is a value added technique for your business.”
To find out more about how to pre-qualify your prospects so you don’t waste time on buyers and sellers who won’t make you money, you can visit http://www.hypertracker.com/go/cp/a24a080806/  where you can learn about my 3-day SuperConference where I train agents on effective qualification and conversion systems.
Billion Dollar AgentTM Craig Proctor has been in the top 10 for RE/MAX Worldwide for 15 years. To receive free training from Craig with no obligation, visit: http://www.hypertracker.com/go/cp/a24b080806 
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