How do you determine whether a prospect should become a client? What are the criteria of becoming a client? Have you created a series of questions to help you minimize the time invested to determine if a prospect will meet your standard?
You need to create a systemized approach to determine if a prospect measures up to your specific criteria. This approach needs to be applied each and every time you come in contact with a prospect. I believe it doesn’t matter where the prospect comes from; he or she needs to be evaluated based on a standard. Even if the prospect is a referral from a “raving fan,” he/she still needs to meet the standard. If the prospect does not meet the standard, I would encourage you to gracefully decline the potential business.
There are eight questions that I used during my career in real estate to determine who to have as a client and who to pass on.
1.When is this prospect going to buy or sell? When is the prospect ready to move? The further out the move date, the lower the motivation of the prospect. You will have to follow-up more with the prospect, and you will have to invest more time to achieve a sale, if the moving date is far in the future. It is difficult to make a decent income chasing prospects that may buy or sell in the distant future.
2.Does the prospect have the ability to buy? Does the prospect have the cash down payment and is he able to be approved for financing? There are many agents who show property to prospects for a week or two, only to find out they cannot buy. My suggestion is to find out if they are able to buy a home before you even put them in your car. Require them to meet with your lender or provide proof of being pre-approved from another lender before you invest your time, effort and energy in the prospects.
3.Does the client have reasonable expectations? This question is two-fold. Is the “wish list” of what the client thinks he can afford, and what he can actually afford, the same? Often buyers are not in the real world in regards to what they can afford to purchase. If you are chasing a prospect that is not in reality, you are truly wasting your time. In this situation you are going to either be the bad guy by telling the clients what they can really afford, or the client dumps you because you do not believe in his or her crusade. Either way, it is a difficult road to success and eventually leads to no commission.
The second part of this question is directed to the clients who try to beat the market. I always tried to avoid sellers who wanted more than fair market value for their property, and the buyers who wanted to steal the property. They both can be wastes of time for agents. The odds are heavily weighted against these buyers and sellers. You often will invest a tremendous amount of additional time to earn the same income. Not to mention that often these people have the desire for an “I win — you lose” type of transaction. In my experience, those are the least enjoyable transactions to enter into, when one of the parties is only concerned with winning.
4.Does this prospect respect my time and me? Our time is our most precious commodity. Once it is gone we do not get it back. A prospect that does not value your time by not keeping appointments and by showing up late is clearly telling you that he does not value your service, or your time.
Often buyers and sellers will try to tell agents what to do and how to do their jobs. They need to understand they are paying for your knowledge, advice and professionalism. When they do not take your guidance, you need to decide if you want to continue to work with them. In my career, I chose not to do business with people who disregarded my guidance. If you acquiesce during the listing agreement period, once the listing expires you will still wear the black hat. The seller could still talk disparagingly about you and your service. How many times has this happened to all of us? I truly believe, if you are a professional Realtor, your clients should regard your guidance as they do of their doctor, attorney or accountant. I would not question my attorney or accountant’s guidance. It is rather presumptuous for me to think I know more than they do in their area of expertise. My best advice to agents is to run away from this type of prospect quickly!
5.Am I being asked to compromise my beliefs morally or ethically to make a sale? If we have to deviate from our business philosophy, we need to reevaluate this business relationship. Being able to stand tall and live with your decisions is better than any sale you might make. If a prospect requests you do something that would fall into a gray area, you should carefully evaluate it. What if the deal blows up, or the gray turns pitch black? Remember, most buyers and sellers will immediately point the finger towards the agents involved.
6.Can I create a satisfied client? Is this prospect the type of person who will never be satisfied? Do you want to be the next agent he is complaining about? These are people who will never be satisfied, no matter what you do or what level of service you provide. Remember people tend to know, enjoy and develop friendships with people who are similar to themselves. Do you want more referrals like the current prospect? I urge you to carefully evaluate this question when you are determining who you want your current clients and future prospects to be.
7.Is the client willing to tell me the truth so I can help him? Sometimes people view us as the enemy, or as a necessary evil. Prospects can sometimes play “hide the ball” with an agent. I think that open and truthful communication between the agent and the client leads to a successful relationship and transaction. In the end it will lead to successful referrals. If a prospect can’t be honest with you, you should probably pass on him.
8.Is the commission that you will earn worth the trouble? Some agents may be offended by this question. But the truth is, we are in this business to provide a service and to turn a profit. This is a question that must be asked every time. Are the dollars earned adequate for the time and effort you will be expending to put this transaction together and close? Maybe it would be better to invest the time to find a higher quality prospect or client. It is your time, so you are entitled to select how it is invested.
It is all right to decide to go ahead and work with someone, even though you know the amount that you will earn may not be as high as compared to other transactions. In my career, I entered into a handful of deals annually to help people. The key was, I accepted the fact that I would not be compensated for my time at my usual hourly rate before I entered into the client relationship. I think that it is easier to accept when you understand it going into the relationship, rather than invest all your time and then find out. It is easier when the choice is yours.
Develop your own list of questions to evaluate your prospects and clients. Make sure that the clients with whom you are spending and investing your time on measure up to the standard you have set. You will find an increase in your production and income waiting around the corner once the standard is established and met with all your clients.
Dirk Zeller is a sought-out speaker, celebrated author and CEO of Real Estate Champions. His company trains more than 350,000 Agents worldwide each year through live events, online training, self-study programs and newsletters. The Real Estate community has embraced and praised his six best-selling books; Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, The Champion Real Estate Team, Telephone Sales for Dummies®, Successful Time Management for Dummies® and over 300 articles in print. To learn more, please visit: http://realestatechampions.com/leadgeneration/.