Prospecting is essential for success in real estate, regardless of how busy you may be. Yet, for many agents, picking up the phone is a daunting task. The secret to effective prospecting lies in conquering the initial hurdle. Just like any new endeavor that requires behavioral change, breaking free from old habits demands dedication and effort.
This is where I urge you to step up. Take the challenge and commit to making a specific number of calls each day for the next 30 days or dedicate a certain amount of time exclusively to prospecting. By diligently following this routine for a month, I assure you that picking up the phone and prospecting will begin to feel less overwhelming. You will surpass obstacles, letting go of vague fears or anything that hinders your progress. And once you overcome this hurdle, it becomes a breeze. You'll see.
Now that you have embraced this challenge, allow me to equip you with the necessary tools to excel in the art of prospecting. The knowledge presented in this chapter is undeniably the most valuable guide to effectively communicating with sellers over the phone and securing those vital appointments.
Six Vital Principals of Prospecting You Need To Know As A Real Estate Agent
1. Prospecting is the cornerstone of our profession.
As real estate agents, our role extends beyond merely listing and selling homes. We have the privilege of making a meaningful impact on people's lives, assisting them in their journey from point "X" to point "Y". And we gauge our success by the amount of money we earn – an indicator of the number of people we've helped. The more assistance we provide, the more income we generate.
Now, let me introduce what I like to call the Paths to Success, as follows:
- To increase your earnings, you need more completed transactions.
- To have more transactions, you require more contracts in hand.
- To secure more agreements, you must acquire a greater number of listings.
- To obtain more listings, you need to attend more appointments with potential sellers.
- To schedule extra appointments, you must actively plan and allocate your time.
- To make the necessary arrangements, you need to engage in effective prospecting.
Thus, prospecting serves as the first pivotal step towards success. By dedicating ourselves to this practice, the other pieces of the puzzle will naturally fall into place. Even if we start with little aptitude, the more we engage in prospecting, the more we will reap results. Wondering why? It's because real estate operates on the principles of statistics.
Research affirms that by reaching out to a sufficient number of individuals and persisting in our efforts, there will come a point when someone will recognize us as a Realtor and say, "Come on over!" Hence, prospecting must always occupy our attention and efforts.
2. Prioritize the growth of your inventory.
Many agents set goals like, "I want to secure X number of listings this month." However, I encourage you to adopt the practices of top-performing agents. Instead of solely focusing on the number of listings acquired in a particular month, they emphasize the size of their overall inventory.
During one of my real estate agent classes, I approached a student named Alex. Alex proudly shared that he had obtained three listings and made one successful sale. Impressed, I remarked, "Sounds like you had a great month." Alex, being a perfectionist, replied, "Well, I could have done better."
Knowing Alex's drive to set high standards, I inquired about the number of listings he had in his inventory. He mentioned having 26 listings. On the surface, that's already impressive, isn't it? However, given that we're talking about Tony, I suggested, "Alex, aim to build your inventory up to 30 in the next 30 days. Then, perhaps, reach for 35 next month."
Here's why focusing on inventory growth is beneficial: By prioritizing inventory rather than just securing new listings, you constantly replenish your listings as they enter into contracts. Let's say you currently have 26 listings, and your goal is to reach 30 within a month, requiring you to obtain four new listings.
However, during that same month, two of your listings go into contract. How many new listings do you need to acquire? Six, because you're replenishing the two that entered contracts. In fact, if you set a modest monthly goal of increasing your inventory by just one listing, you would likely find yourself on the path to doubling your income, depending on the type of market you're in. To track your progress, you could even create a chart to visualize your inventory growth over time.
3. There is no way to make money if you are working in an office setting.
Getting out of the office and meeting with individuals, whether they are buyers or sellers, is the only method to get financial gain. In addition, if you are already working in the office, your major purpose should be to create possibilities for you to attend other events.
4. To achieve success in prospecting, it is essential to follow a well-crafted plan.
Allow me to present a remarkably simple, yet marvelously effective approach:
A. Dedicate three hours each week to engage in cold-calling. Surprisingly, even the highest-earning agents I have encountered, who pocket hefty six-figure incomes, invest their time in this seemingly old-school practice. Why would accomplished professionals engage in cold calls, you might wonder? The answer lies in the sharpening of their skills and their unwavering commitment to staying at the forefront of their game. Not to mention, cold-calling plays a pivotal role in ensuring a robust listing inventory in the first place.
C. Aim to meet with two homeowners whose listings have recently expired.
Now, let's look at factors, A, B, and C. By carrying out these activities diligently, what is the minimum number of listing appointments you are likely to attain? Four. Observe this remarkable fact: two FSBOs and two expired listings— a base minimum of four listing appointments. Remarkably, this is what many top producers in the industry accomplish as a fundamental cornerstone of their success. Additionally, through the power of cold-calling, you might even find yourself securing additional appointments beyond this foundation. Or, allow me to introduce my very own addition to this prospecting methodology, referred to letter D.
D. Embark on a strategic listing campaign.
Personally, I utilized listing campaigns with fervor. During 30 days, I would immerse myself entirely in the task of listing properties—a whirlwind of listings. I would temporarily set aside working with buyers, except for those labeled as "A" buyers. The sole focus became an unwavering dedication to list, list, list with fervor. Once the need for a mental respite arose, I would gracefully indulge in working with buyers. Then, as energy for the listing market began resurfacing, I rode that wave by initiating another intense listing campaign. Embrace this comprehensive prospecting plan, designed to exponentially increase your chances of success in the real estate arena. Let the powers of structured prospecting and strategic listing campaigns be your guiding force toward uncharted heights.
5. I encourage you to redirect your B and C buyers to other agents.
Let's define our categories:
- An "A" buyer is someone who has an urgent need to purchase a home, with no room for ifs, ands, or buts.
- A "B" buyer is someone committed to buying a home but lacks a significant sense of urgency.
- A "C" buyer is someone interested in buying a home, but their commitment level falls more into the realm of "it would be nice" or "it would be a good idea" to make the purchase.
When your primary focus revolves around expanding your listing inventory, it's best to avoid investing substantial efforts in working with B and C buyers. Instead, persistently engage with "A" buyers who present a clear opportunity for a definite sale.
Let me illustrate my point with a practical scenario: Can someone potentially earn $150,000 or more yearly in real estate by exclusively
working with buyers and not handling any listings? Yes, it is feasible, but it would undoubtedly be an arduous task, possibly pushing one to the brink of their sanity. Alternatively, if one solely concentrates efforts on listing properties, omitting buyer representation entirely, could they still aspire to earning $150,000 a year? Undoubtedly.
However, I'm not suggesting abandoning the idea of working with buyers altogether. It is crucial to respect what truly works. And it's not just my opinion; during my constant travels across the country, I frequently engage with real estate professionals who earn six-figure incomes. These industry experts consistently affirm that 75% of their earnings come from successfully selling listings, while the remaining 25% derives from working with buyers.
Therefore, I firmly advise you to focus your prospecting efforts on expanding your listing inventory. Concentrate the majority of your time and resources on this critical aspect. However, for those instances where you work with buyers, ensure you exclusively target "A" buyers who are ready to make the leap. After all, why spend your energy on individuals who are not prepared to buy now? We are not mere chauffeurs in this profession; we are real estate salespeople. Consequently, if you come across buyers who fall into the "B" or "C" category—those not yet ready to make a purchase—kindly refer them to an agent who may not have been exposed to the valuable insights shared in this blog.
6. Real estate revolves around numbers, making it a game of statistics.
This particular aspect should be noted with an asterisk. Irrespective of your telephone skills, consistent calling will eventually lead to appointments. The idea behind this is to alleviate any potential stress. As salespeople, our primary goal is to enhance our skill levels through education, tapes, and seminars to increase our closing ratio. Nonetheless, the bottom line is to simply focus on working the numbers.
Just recently, one of my students named Sarah approached me, admitting, "Eric, I understand what you mean. I need to prospect more, but I'm struggling with it." Curious, I asked her why. She candidly replied, "I experience fear when contacting complete strangers." This is what I conveyed to her: "Consider this, if you don't make calls, will you secure any listings?" "Nope," she responded with a smile, beginning to comprehend my point. "So, if you do make the calls and perform poorly, will you still secure those listings?" "Nope," Sarah acknowledged. Both scenarios essentially result in no listings.
However, here's the thing: by not even picking up the phone, you guarantee yourself no listings at all. On the other hand, when you do make the call, there's a chance you won't mess up; luck might even be on your side. Who knows? The right words may come naturally, leading to an appointment and securing a listing. The key here is that merely picking up the phone and making the call, even if an appointment isn't obtained, leaves you no worse off than if you hadn't made the call at all.
Here's a valuable tip: when working the numbers, making calls, and prospecting, don't become overly attached to the outcome.
Let me reiterate: avoid getting too fixated on the result. You might refrain from picking up the phone because you've tied your self-worth to the response of the other person. However, in business, it's crucial to remember that a rejected appointment doesn't define who you are as a person. Approach the phone call to assist these sellers. If they are open to your help, that's fantastic. If they aren't receptive, that's perfectly fine too. At least you made an effort.
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