Traditional buyer lead-qualifying techniques help you determine whether the lead is qualified to purchase a home, but they do nothing to help you determine whether you should devote your time working with that lead.
What is a lead?
A lead is a person who has the authority, money and willingness to buy a product or service. The purpose for qualifying a lead is to confirm that the person you think could become a client has those three characteristics.
Traditional qualifying techniques
Traditional techniques advise using the following types of questions:
- Are you working with another real estate agent?
- Have you already listed your home?
- Are you preapproved for a mortgage?
- When do you plan to make a move?
These questions will indicate if the person is qualified to purchase a home, but they do nothing to determine if they’re qualified to purchase your services.
Assume you are selling skateboards and to qualify a lead you question them about their general health, sense of balance and willingness to play in traffic. That will tell you if the person should purchase a skateboard, but does little to indicate whether that person is interested in purchasing from you or a competitor.
Qualify the buyer to purchase your services
You wouldn’t think of listing a house for sale without a listing agreement. Why would you work with a buyer without any definition of your working relationship? Defining your relationship will ensure that both parties understand the services that you will provide and the manner in which you will be paid to eliminate bad surprises during your work together.
If you always have a signed buyer agreement before you start working with a new client — congratulations. The reality is that there’s a lot of controversy about buyer agreements, and it would undoubtedly be fair to say that real estate agents who use agreements on a regular basis are in the minority.
It’s true that in real estate, buyer agreements aren’t designed to describe the services provided beyond the legal requirements. And, it’s also true that there’s no reason for a buyer to get excited about signing an agreement in which the broker promises to “attempt to locate property suitable to buyer for purchase” or to make “reasonable efforts to locate property which would meet the buyer’s desires with respect to residential real property” (emphasis added).
But, think about it. What professional-service business owners would work without a formal agreement? If you hire someone to build a website for you, you would expect to receive a statement of work agreement that both parties sign. If you hire an ad agency, you’ll sign a creative and design services agreement. You don’t sign an agreement when you visit your doctor, but everyone knows that you’ll end up paying for that person’s services before you leave.
Until the industry gets wise enough to change how buyer agreements are written and used, that agreement is what you have to utilize. Your challenge is to make the agreement work for you. The agreement should be the first step in qualifying buyers to work with you. Your buyer needs to be comfortable enough to commit to working with you exclusively for some period. And, they need to understand exactly how the real estate industry works.
Make sure your buyer leads understand your services and the industry
Do you have any idea how many consumers understand the industry today? How many consumers are stuck back in the days when you had to talk to someone at every brokerage in town to see all the properties for sale? Don’t laugh — they’re out there. How many consumers understand how agents get paid? If you do a Google search for that question, you’ll find almost 14 million results. Why would people write about it so much if it were old news to the majority of consumers?
You need to develop a buyer presentation. Explain why they should work with you as opposed to any other real estate agent. Highlight your competitive advantages and the benefits they will receive from your work together. Explain, in plain English, the intent of the buyer agreement. Make sure the lead understands how you get paid.
Use a two-step buyer lead qualification approach
Certainly you need to ask the questions in the traditional buyer lead qualification technique. You wouldn’t want to work with someone who didn’t answer those questions to indicate a readiness to buy.
Just make sure that you qualify the lead to work with you first to avoid headaches down the road.
What effective ways do you qualify leads? Please continue the conversation in the comments section below.
Since 2004, Kathleen Allardyce has helped hundreds of Realtors with their marketing issues. You may know her from Build Real Estate Results or AdvancedREM.com. She is the founder of the Real Estate Marketing Center, a place where Realtors will learn how to enhance their sales and marketing skills to clearly define their competitive advantages, and attract, cultivate and convert more leads.