Elite AgentProspecting and Listing

Prospecting for Success: The Power of Referrals

If your current prospecting methods seem like hard work for few results, you probably need to change your approach.As Bill Robertson explains, your past clients and your social network may be the goldmine you’re yet to discover. It’s time to harness the power of referrals.

Ask any professional agent and they will tell you that referrals are the basis of a profitable and sustainable real estate business.

In real estate prospecting there are four key areas that require constant attention:

  1. prospecting for new buyer and seller business
  2. the pre-listing stage and the listing appointment itself
  3. helping buyers to make a decision
  4. follow-up and self-promotion to ensure referrals.
    However, this article will focus on the first point – prospecting to find sellers and buyers.

Prospecting for listings
Prospecting for real estate business is crucial. Without prospecting you don’t have listings, without listings you don’t have sales, and without sales you don’t get paid. So is it not better to prospect in such a way that when you do get the business, you have a 70 to 80 per cent chance of getting paid?

Ask any professional real estate agent and they will tell you that if you walked into any average real estate office, the total stock they have for sale could be broken into three categories:

  1. one third that will sell due to a motivated seller and being correctly priced
  2. one third that could sell due to a fairly motivated seller, but requires much work to be done, especially in educating the seller to market
  3. one third where the agent is wasting their time.

Where does your personal stock fit into this one third, one third, one third rule? The trick is to know which listings fit into which category so you know where to concentrate your efforts.

When prospecting for new business, try to be 70 to 80 per cent sure you are dealing with a seller who appears genuinely motivated to sell and, in your opinion, will listen to the market via you, as to what their property is worth.

In the real estate industry, much time, energy and money is wasted in the area of canvassing, because most agents do not realise that the market/public has changed, is changing, and will always change. Many agents suffer from the “Who Moved My Cheese?” factor. They use the traditional method of bombarding households with continual letters, mailbox flyers, doorknocking and junk e-mail (if this still works in your area like it used to, yes, continue to use this method as long as you are getting the business).

Now consider the greatest form of prospecting – referrals. The point of difference here is you. Ask any professional agent and they will tell you that referrals are the basis of a profitable and sustainable real estate business. In order to succeed you need to build your own client/customer referral network.

Your own client/customer base
A client base is a group of people who you have either done business with before or, when they are ready, they will do business with you.
They like:

  • your manner
  • your honesty
  • your professionalism
  • your proven results, and
  • they would gladly recommend you.

If we called any of these clients and said, “Kylie Smith suggested I call”, they would reply “Yes, Kylie, she’s pretty good. She sold/helped us buy our property six months ago”. In other words, these clients know you.

Remember:

  • Prospecting requires hard work – there is no magic pill
  • Prospecting is basic – but how you follow up your prospecting is critical
  • Prospecting is also either quality or quantity – which strategy do you think is the best? Quality!

Here is something you can do immediately: focus on the listings in your area that have not yet been sold. Whether it is a private sale, an open listing, a failed auction or a tired exclusive listed by the opposition, don’t these sellers need some help? They can be an excellent source of “present needs” business – you do know that the owners were, at one stage, interested in selling. Otherwise, why list for sale? If they are serious, and still want to sell, why not contact them and see if you can list their property? (Warning: Be conscious of your real estate Code of Conduct under the legislation)

How do you meet sellers?
How do you actually meet people that may need your services in the future?
The best way to meet a prospective seller is through being contacted as the result of your website or meeting someone through:

  • a recommendation from a colleague or close friend
  • a recommendation from an existing client
  • a recommendation from a past client
  • a social function you attended, and swapped business cards
  • a business luncheon you attended
  • a sporting colleague
  • a golf partner
  • your network, your partner’s network, or your children’s network of friends.

Asking someone who knows you, knows of you, or knows of your reputation is the key to successful prospecting and securing those listings you need to be successful.

Above and beyond all methods of prospecting, one stands out the best of all – past clients and past customers. The business you can get from the satisfied and impressed clients with whom you have done business before is where the best business of all comes from. Remember, make them “walking advertisements” for you. However, there is a catch – your past clients and customers have to be impressed with you before they will recommend you to others.

Above and beyond all methods of prospecting, one stands out the best of all – past clients and past customers. The business you can get from the satisfied and impressed clients with whom you have done business before is where the best business of all comes from. Remember, make them “walking advertisements” for you. However, there is a catch – your past clients and customers have to be impressed with you before they will recommend you to others.

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