The real estate market has exploded in the last two years, but that doesn't mean that clients are going to automatically flock to your doors or that this advantageous market will continue for years to come. Prospecting has always been important in the real estate business, and there's no indication that this is going to change any time soon.
What Is Real Estate Prospecting?
Real estate prospecting is the practice of finding new clients who are looking to buy or sell a property. Prospecting involves taking active steps to grow your business by seeking out specific clients. Every real estate professional has their own favorite real estate prospecting methods. Tiffany Miller, a real estate broker at Miller Realty in Geneva, Ohio, and former director of the Ashtabula (Ohio) County Board of Realtors, uses a variety of ways to prospect for new clients, although she identifies word of mouth from satisfied clients as her favorite.
What Real Estate Prospecting Goals Should I Set?
The most important goal of good real estate prospecting is to build relationships with prospects so that they will turn to you whenever they are ready to buy or sell property. But remember: You don't always know when that need is going to occur, so it's important not to narrow your prospecting so much that you reach only people who may have already established a relationship with a real estate professional. If your only goal is to increase short - term sales, then you're likely going to miss out on future sales opportunities.
Here are some goals to set for yourself as you work on becoming a real estate prospecting guru:
- Hone in on what your niche is and how you want to be recognized in the area.
- Become “known” for your niche audience.
- Create long - term relationships with past clients and new potential clients.
- Find potential clients in all stages of the home process, whether buying their first home in five years to selling their forever home in 5 years (and everything in between).
- Get digitally savvy.
- Make prospecting a part of your daily routine.
- Make prospecting a part of your brokerage’s annual lead - gen budget.
- Get comfortable asking for referrals and thanking those who refer you.
- Try new “out of the box” prospecting strategies each year.
- Get comfortable being uncomfortable
How Does Prospecting Differ from Marketing?
While prospecting and marketing are similar, they are two distinct activities. Marketing involves making the public aware that you are a real estate professional and explaining the services you offer. Prospecting is more personal and involves asking specific individuals for their business and building a relationship with them.
For example, having a banner out at a trade show with your name, photo, and contact information is marketing. Greeting people at your booth, talking with them about their real estate needs, and getting their contact information is prospecting.
Before You Start: 5 Questions to Ask Yourself to Determine Your Exact Real Estate Audience
Before you begin your prospecting, it's important to determine which people you are seeking. To do that, ask yourself the following five questions.
- Who is my competition? It's always a good idea to know who else may have contacted your prospect and what they offer compared to you.
- Who is my ideal client? This question ties back directly to your niche. Ask yourself what your ideal buyer looks like. Is that person young or older? A first - time homebuyer? Does your ideal client have experience in the real estate market?
- What’s my niche? No salesperson can be all things to all people. It's better to find the segment of the real estate market that suits you best and focus on that. This might be vacation cottages, multifamily homes, luxury homes, or homes in a specific neighborhood.
- What can I offer my client that's unique? You may have expert knowledge in a particular area of the market or have years of experience in negotiating contracts. Think about what makes you unique in your real estate market.
- What are my ideal clients seeking? Lastly, it's important to think about what your prospective clients need as they buy or sell a home. The needs of a first - time homebuyer are going to be a lot different from the needs of a seasoned real estate investor.
5 Examples of Real Estate Prospecting
Real estate prospecting isn't just about making sure that your new listings are advertised in the newspaper and on social media. It's about building relationships with people who need your services now or in the not-so-distant future. It's important to remember that, as a real estate professional, you are providing a valuable service. Few homeowners or prospective homeowners are well equipped to navigate this tricky market alone.
Below are five good ways to find new clients and build your real estate business.
1. Letter Writing
Admittedly, letter writing is "old school," but this method of prospecting still has many benefits.
Pros: Getting a personal letter is rare these days, so yours is likely to stand out. Compare this to the multiple email messages the average person receives daily. A letter also lasts longer than most email or text messages and can be referred to by the prospect next week, next month, or next year. Finding a year - old text message isn’t that easy.
Cons: Your letter may languish on a prospective client's desk or kitchen table for weeks and may never be read.
Tip: One of our favorite real estate prospecting tips is to make sure to personalize your letters by using prospects’ names in the salutation and referencing their cities or neighborhoods in the body of the letter. It’s also a good idea to hand - sign your prospecting letters to give them an authentic, genuine feel. You can find good real estate prospecting letter samples and templates online at The Close and at fitsmallbusiness.com.
2. Cold Calling
Cold calling is the time - honored practice of picking up the phone and calling people you don't know or barely know to offer your services.
Pros: Cold calling connects you with people you might never come in contact with otherwise.
Cons: Some people won't be available, and some will let the call automatically go to their voicemail. And be prepared for some who may even react with annoyance.
Tip: We think it sometimes makes sense to buy prospecting lists from a third party. This way you already have a well - vetted list of people in a certain prospecting category, such as newly married couples or people who have just moved into the area.
3. Social Media Contacts
Social media isn't just about posting new listings; it's another way to forge new relationships. Says Claudine O'Rourke, a New York City real estate expert, "When I see a baby bump or a stroller, I know there’s a potential client who needs more space! So not only do I engage in any way I can in person, but I engage on Instagram with those in my sphere who are posting about being a new mom. As a mom myself, I can relate. Instead of offering mommy advice, I offer NYC real estate advice. #nycmoms.”
Pros: Prospecting using social media, done well, can reach a broad range of potential clients. It's also available 24/7, so you can do your prospecting during the hours when you can't show homes.
Cons: Facebook has nearly 3 billion active users. This means the competition for your prospect's attention is intense.
Tip: Use tested real estate prospecting scripts for your messages so you stay consistent with your marketing and you know that your words are going to get results. Need ideas for scripts? Some good online resources include The Close and theredx.com.
One of the best real estate prospecting ideas is to let your satisfied customers connect you with new leads. Miller says that she always asks her clients to recommend her to others if they've been happy working with her. She makes sure that she stays top of mind by checking in with them periodically with messages on Facebook and LinkedIn, remembering their birthdays with an e-card or direct mail piece, and greeting them warmly when she runs into them in town.
"Networking is easy in a small town", says Miller. "Your clients are in church, in the grocery store checkout line, and watching their kids compete in soccer games. It's just a matter of being personable and accessible."
Pros: Networking is free and takes little of your time.
Cons: You lose a degree of control of your message since it's being delivered by others.
Tip: Offer an incentive to your clients, such as a gift card to a local coffee shop, for recommending a new client to you.
5. Local Events
If you're wondering how to get leads in real estate, especially in a niche or geographic area that's new to you, try event marketing. As the name implies, event marketing involves renting a booth or table at an event and talking with attendees. The event might be anything from a bridal fair to a local Chamber of Commerce event. Not all events are costly. While bridal events may cost several hundred dollars, a Chamber event may be less than $50 for its members.
Pros: You'll meet a lot of people.
Cons: Many of the people you meet may have little interest in buying or selling a home.
Tip: Host a giveaway where attendees fill out an entry form, ask whether they’d be interested in learning more about buying or selling their home, and then use that contact information, with their permission, to follow up with them after the event.
Real Estate Prospecting Tools
Technology can be a big help when it comes to real estate prospecting. Below are a few of our favorite tech tools that make it easy to connect with prospective clients.
Apps for Real Estate Prospecting
There are several apps that help make real estate prospecting easier. Some of our experts' favorites include these:
- BombBomb: This app helps you create video messages that you can send to your prospective clients.
- Cinc: Focusing on consolidating buyers and sellers into one centralized dashboard, Cinc helps agents qualify and prioritize leads, and manage productivity.
- Close: This all-in-one app lets agents email, call, and text their leads, all from a single screen.
Tools/Software for Real Estate Prospecting
Software can also help you keep all of your listings, clients, and pending closings sorted so none of the details fall through the cracks. The experts we spoke with particularly liked these:
- Contractually: This good overall real estate customer relationship management (CRM) tool works well for all size teams and even single agents.
- Streak: Integrating with Gmail, Streak helps you work directly from your inbox to qualify and manage leads.
- Real Geeks: This is a good one-size-fits-all CRM software tool that's affordable and easy to learn.
Real estate prospecting doesn't have to be difficult, but it needs to be consistent. Choose your favorite three methods and make prospecting a regular part of your job – just remember as you're prospecting to closely follow the NAR Code of Ethics. If you never stop prospecting, you'll never run out of clients.