Just what are BAD real estate leads? Ask a number of real estate professionals this question about their website leads and you’ll get a number of answers, often with words like “tire-kickers, procrastinators, unqualified, not ready, or others.”
Think of real estate leads like they are bananas. Buy a bunch, sit them on the window ledge, and then wait a week or so. The chances are that you’re not going to get excited about eating those dark brown mushy things. Most importantly, real estate leads have a shelf life just like some fruits and vegetables. They can and will go bad, but that’s not because they are BAD leads. It’s because you let them go bad.
Problem #1: Spoiled Leads Rarely Close
When you categorize in your priority funnel, often you can make mistakes about the prospect or lead’s characteristics, motives or urgency. If you do misjudge the prospect in one of these ways, it’s easy to let that lead spoil on the shelf while you attend to other perhaps less profitable activities.
Solution #1: Buyers are Liars - Sellers Too
Assuming that something the lead prospect says in an email or lead form is the truth can be a costly mistake. An example is a popular tactic in website lead generation forms to ask the site visitor and prospect about their timeline. They may not want to tell you, as they don’t want a full-court press from a salesperson. If you force them to choose from options like 0 to 30 days, 30 to 60 days, etc., the answer you get may not be close to the truth. Or, worse yet, they will stop filling out the form and leave the site.
Don’t push your possible future closing table customers into a corner before you even know who they are. You’re inviting them to leave before they give you their contact information or to tell you they have a much longer timeline than reality. If they do that, you may put them into the “cold” or “lukewarm” lead bucket, and there’s where they’ll spoil before you get around to them.
Problem #2: Making Prospect Motivation Assumptions
Forget timeline for the moment and think about designations like “tire-kicker.” While it can happen that you’ll get a bored person who loves to be shown houses and never plans to buy, it’s very rare. Often a buyer prospect will mislead you as to their urgency thinking it may change your actions or the properties you show them or do not show them.
Solution #2: Think "All Leads are Equal"
Unless a prospect tells you they have to buy or sell a home by a certain deadline due to tax reasons or some other impending emergency, assume that they all have the same urgency or timeline. Don’t make assumptions as to their urgency. Just answer their questions, serve their needs and allow them to move toward that closing table and commission.
That’s not to say that some prospects aren’t “hotter” leads because they can be. If they say that they have a contract on their current home and want to find another one so they can make one move, that’s a probable “hot” situation. If they say their rental lease is expiring in a month or so and they want to move into a home they’ve purchased, that’s a “hotter” situation. However, in the absence of any obvious timeline statements, assume all your leads are working the same schedule before taking action.
Problem #3: Making "Qualification" Assumptions
This is a big one. Maybe you pick up a prospective buyer at home and it’s a dump of a rental. You can see that they are paying very low rent and it’s easy to assume that they can’t afford to buy or qualify for a loan, especially if they are steering you to certain neighborhoods they like.
One real estate professional learned the hard way when he made this type of qualification assumption. The buyers had been renting the cheapest place they could while they piled up down payment money for the home of their dreams. The agent kept taking them to lower-priced neighborhoods, so they found another agent and bought the higher priced home they wanted. Don’t assume anything unless and until a credit check is done or a lender turns them down.
Solution #3: Everyone's Qualified - Until They Aren't
When working with buyers, you can get past money type issues early and impress them with your expertise and service. Simply tell them that when they’re ready to make an offer, it will be viewed better by the seller if it comes with a pre-qualification letter. Then help them to get one. Then move on to helping them to buy what they want and can afford.
Open-minded Prospect Handling Will Make You More Money
This entire post can be boiled down to one very important rule: treat them all the same until and unless something proves you should do otherwise. Don’t let real estate leads sit on the shelf and spoil because you made a superficial assumption.