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While I am not an agent, my company sells services to agents and over the years I’ve developed strong relationships with many of them. Last week I met my friend, and Realtor, John for lunch. His cell phone rang with a buyer inquiry regarding one of his properties, and his side of the conversation went something like this:
John: Hello?
John: Okay, the one on Lakeshore Drive?
John: Yeah, it’s a great listing. They are asking $799.
John: Okay, thanks for calling.
His total time on the phone was less than 25 seconds.
Being in the field of real estate lead generation, I looked curiously at John and asked, “What was that all about?”
He explained to me that it was just another caller looking for the price, saying that he gets several of those a week but they never go anywhere. “Once I told him it was $799 he said that was too much.”
I asked, “Well, do you think that guy might want to buy a less expensive house?”
John said, “I don’t know.”
I asked, “Do you think that guy has a home to sell?”
John got annoyed with me and said, “All he wanted was the price.” The truth is, John was annoyed with himself; he just didn’t know it yet.
He had spent his hard-earned money on winning that listing, and then he invested more money on marketing the property. His marketing produced a lead and because he mismanaged the conversation, that lead will not be monetized – as either a buyer or seller. If that prospect was looking for a $500,000 home and had a $300,000 home to sell, John just lost $24,000 in gross commissions.
But he’ll never know. He will never know what motivated that prospect to call. Was it an active buyer canvassing the area for potential properties, or a neighbor doing a comparison before they place their home on the market, or just a lookey-lou as John believed?
John asked me what I would have done differently.
I replied, “I wouldn’t have answered his question about price. I would have responded by asking a question about him, taking control of the conversation. I would have started by asking for his name...”
John said, “Well that would have just annoyed him. He was only asking about the price.”
I replied, “…and I would eventually have provided the price, but first I would have asked whom I was speaking with. Then I would have begun to build rapport by asking if this was his preferred area of town, and what price range he was looking in. I would have told him that the property he inquired about was fantastic and that I had a whole bunch of other great properties in that area that I would be happy to send him, but I need his contact information first.”
Twenty minutes later John’s phone rang again, and this time he seemed determined to prove that my suggestion of qualifying and engaging the caller was a waste of time. On this call, he asked the prospect’s name, and then spent a couple of minutes detailing the square footage, bedrooms, and renovation history of the property. The caller politely thanked him and hung up.
John had greatly missed the point. He had made the most common mistake that agents make when taking an initial call from a prospect. He was answering questions, and not asking them.
As a real estate agent your job isn’t really to sell houses. That is the end to the means. If that were the sole purpose, then once you’ve sold that property you’re done and back to square one. Yes, you have a responsibility to your client to sell their home, but disclosing the price to anonymous callers is not “selling.”
Selling is about a means to an end, action steps you take for the purpose of achieving something else. In the case of John’s phone call, these steps should have included building a relationship with a possible future client.
To build relationships you have to create a dialogue; you have to take control of the conversation. It is essential that you ask the right questions and ask them in a manner that will get the prospect to open up about their motivation for being in the market, their time frame, and their ultimate goals.
This does not mean that you should withhold information or be elusive. It means that you understand that you are developing a business relationship. The focus is on the relationship; the relationship is what makes you money, not the house. Perhaps this house will be the one, perhaps not, it doesn’t matter. What matters is the relationship.
The job of selling real estate is about generating and qualifying buyers, finding and winning listings, pricing properties correctly, and properly positioning a price reduction when necessary. Those are the four tenants.
It is often said that people do business with people they like and trust. It would be more accurate to say people do business with people who own the relationship. And it all starts with quality lead generation, because if you have a steady stream of leads you’ll have more sellers and buyers, and then it’s easier to hold to the tenants. But if you dismiss the lead, as John did, you make the job harder.
Next we will explore what questions you should ask to build that relationship.
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How right you are-it is our job as Realtors to qualify all prospects you never know if this person will end up a business partner in the future. I think John would have learned a lesson if he would have listened.