As a real estate agent, there is nothing more frustrating than showing multiple homes to potential buyers only for them to put the search on hold or decide that they want to continue renting. And while it’s great to have prospects contact you and increase your client base, the ultimate goal is to convert these leads into clients. Plus, focusing on the wrong property buyer or real estate investor can take time away from those who will actually convert and write you a commission check. So, before you spend too much time and energy, you need to know if they are qualified leads.
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How Real Estate Agents Can Identify Qualified Leads
The process of qualifying real estate leads is not as hard as one might think. It can be done in a few minutes by asking a set of simple questions which will help you make an accurate prediction of whether a certain lead is actually interested in taking action. These are 6 questions that every real estate agent should ask his/her buyers and investors looking for investment properties. Knowing the answers to these questions will help you decide if these are qualified leads before deciding whether to engage them further.
1) What Do You Know About the Real Estate Market?
This question is especially important to ask a real estate investor. Many think they can find a foreclosed home for sale which they can buy for next to nothing, only to realize they’ll have to compete with other homebuyers and investors eyeing the same property. Moreover, there’s a chance that a buyer has been misled and thinks that it’s a buyers’ market and that he/she will have the upper hand when negotiating the asking price with the seller when it’s actually a sellers’ market.
It’s important for real estate agents to know the level of knowledge their buyer lead has of the real estate market because this shows them how much research he/she has actually done. Qualified leads are those who have educated themselves to assure that they’re ready to buy. Therefore, when you give them a picture of the real estate market and property prices, they won’t be surprised and realize that they can’t actually move forward with the real estate transaction.
2) Are You Financially Capable of Buying a Property?
Budget is a critical indication of qualified leads. So, one of the first questions for a real estate agent to ask his/her leads is how much they are able to afford and willing to spend. Find out if and how much they have saved for a down payment. Do they have debt? If so, how much? In addition, check their credit score to see whether or not it’s good. All of these are important because they affect whether or not your lead will get pre-approved by a lender and the type of mortgage loan they can take to finance buying the real estate property.
Real estate agents should know this type of information about their prospects to decide if they are qualified leads. Why? First of all, you will know if they can even afford to make a purchase. Knowing the price range will also save you time in finding the best property for sale that your buyer can afford. In addition, you don’t have to waste time teaching leads with poor credit scores how to improve it.
3) Are You Pre-Approved by a Lender?
Asking your lead if they’ve spoken to a lender is another important step in the lead qualification process. There really is no point in having a conversation with a buyer who wants to put an offer but hasn’t done anything to prove he/she can finance buying a property. Qualified leads, on the other hand, understand the financing process and are pre-approved for a mortgage loan.
This is an important feature of qualified leads because it shows you how serious they are. They are more encouraged to act because they know their budget and their financial standing. If they’re not pre-approved but are actively seeking advice and answers, that’s also a good sign. In this case, a real estate agent can easily help by referring them to his/her favorite lender – this will help solidify the relationship, which is something successful real estate agents know is important.
4) What Type of Property Are You Looking For?
Of course, real estate agents have to know what type of properties their leads are looking for and why. For example, your client might be a real estate investor looking to buy a multi-family house to rent out for the purpose of making money through rental income. On the other hand, you might be working with a home buyer searching for a condo, townhouse, or a single-family home to live in.
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When qualifying leads, some don’t know how to describe the type of properties they’re looking for. They have this ideal house in their mind, which makes it your job to figure that out and match them up with a listing that closely resembles what they have in mind. Qualified leads, on the other hand, know exactly what they’re looking for.
Qualified leads will give you detailed information about the type of property they want to buy, the number of bedrooms and bathrooms, amenities, schools, neighborhoods, etc. As you can tell, this will make your job of finding a listing that matches their needs much easier! This also tells you that, if the lead is a real estate investor, he/she has done research and has an understanding of the real estate market.
5) Are You Currently Working with Another Agent?
Imagine talking to a prospect who is a qualified lead ready to make an offer, but then you find out that there’s already another agent he/she is working with. Lots of people actually work with two real estate agents at the same time. It’s either because they’re unhappy with the first agent or other reasons of their own. These are unqualified leads and it’s important to ask this question early on in the lead qualification process. You don’t want to put too much time and dedication working with someone who has another option on the table. Not only can these leads cancel on you anytime, but this will also mean you’ll have to compete with another real estate agent over who’s going to win this client.
6) Do You Have a Timeline?
The last questions for a real estate agent to ask in the lead qualification process are “How long have you been looking for a property?” and “How soon do you need to move?” Answers for these questions are not to say you should forget the buyer and move on to a more qualified lead. Instead, it’ll help you determine where in the sales funnel this real estate lead currently is and set your strategy accordingly. Here are some examples of how buyers could answer these questions and what it means for you as a real estate agent:
- If they have just started thinking about buying a property, it could take 6-12 months to close a deal and you might need to refer them to a lender and educate them about the process.
- For those who have been looking for a long time, it’s very likely that you’ll close a deal faster if you find the perfect house for them.
- If they’re unsure, they may not be serious. But, if they meet all of the above criteria for qualified leads, they should go into your lead nurturing process and follow up with them to see when their situation changes.
The Bottom Line
No real estate agent wants to waste time chasing after unqualified leads. Your ultimate goal is to convert these leads into income-producing clients. Thus, agents have to identify qualified leads before investing their time and energy in serving them. You can do that by asking the right set of questions and listening carefully to their answers.
What are some questions you use to determine the quality of a lead?
Note: One of the best ways to generate qualified leads is by using a lead generation program like the one we offer for agents! To learn more about Mashvisor’s lead generation program, schedule a demo.