Thoroughly qualifying Buyers is really the most important factor in deciding whether or not to work with a prospect. I also find that too many Agents err in judgment by working with lower probability prospects than they should. We often are more willing to work with lower probability prospects because they are all we currently have. We work them in hopes that their motivation, time frame, commitment level, and even financial qualifications will change. This investment in low probability prospects is at best, optimistic thinking and at worst, delusional.
The objective of qualifying can be segmented into four categories.
1. Separate qualified and non-qualified prospects.
The faster we can separate qualified from non-qualified, the more resources we save for other prospects. We must design our qualifying process with the objective of quickly separating these two groups.
2. Eliminate or refer non-qualified prospects.
Being able to remove or disengage with non-qualified prospects frees you up to work with or find better qualified prospects. As you reach the Champion level in skills, ability, and mindset, you open the possibility of referring prospects. Maybe these prospects don't meet your standard for clients, but they might meet another Agent's. Those other Agents might be willing to work with lower quality, longer time frame, or lower motivation prospects. Don't automatically throw a lead away if it doesn't meet your personal standard. Start by referring this business to people in your office. Then, if you feel this is happening frequently (I would define frequently as around 4 to 6 times a month, depending on the convertibility of the leads), you might need to consider starting your journey to build a team.
3. Trade commitments with qualified prospects.
In the risk and reward arena of real estate sales, the exchange of commitments is the cornerstone of compensation. We set up that exchange of commitments at the qualifying stage. This is especially true with a Buyer. Sellers have been educated that they must be exclusive to a Real Estate Agent, but there are still many Buyers who don't feel the need or haven't been show the benefit of an exclusive relationship with an Agent to represent their needs and interests. Through qualifying, we need to determine their willingness to exchange commitments or exclusivity for our service.
4. Provide counsel to qualified, committed prospects.
On the last of these four steps, we begin to enter the servicing part of our relationship with the prospect that has now turned into a client.
Our fear of prospecting can shape our decision to work leads that are lower grade. Because we have leads, we excuse ourselves from prospecting for the day, week, or longer. We focus so much on a lead (or a few of them) that, when they don't pan out, we put ourselves in dire straights quickly. We end up wasting our time with people with a low return. The time we invest is really the opportunity cost of the real estate business. In evaluating the Buyer opportunities, we find that a typical Buyer will, on average, take 3 to 4 times more investment of our time than a Seller.
I often ask audiences when I try to drive this point home, "If you have a $300,000 Seller and a $300,000 Buyer, which do you make more money from?" The shout from the audience is always the same: "THE BUYER!" I usually ask them again, and a few start to get it. The truth is the commission dollars are the same; the difference is in the time you must invest to earn the income. The variable is the time in the analysis.
The quickest way, when working with Buyers, to determine their qualifications and motivation isn't asking them all of the qualifying questions. The quickest way to determine their motivation is to ask for an appointment. The last place on earth a low motivation Buyer wants to be is in front of a salesperson. If you don't want to buy a car, do you want to go to a car dealership and talk with a salesperson? For most of us, that's the last experience we want in life.
No matter the indication you get on their motivation and probability of doing business with you or any Agent, you must ask them for an appointment. Every prospect you meet must be driven to a face-to-face meeting or presentation.
A qualified Buyer prospect has to meet your requirements to work with you. Are they worthy of your investment of professional resources?
Published: April 29, 2011
Sometimes there is an arrow on top of the valve, when the arrow is pointing toward the house it is ON, when it is pointing toward the street it is OFF.