Best Real Estate Prospecting Methods

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What You Should Know

  • Leads turn into prospects when they respond to your initial contact, or when you respond to their inquiry
  • Prospects can be prioritized based on their likelihood of conversion, the value they bring, or how time-sensitive they are
  • Real estate prospecting can be partially automated by using CRMs and online tools
  • Prospects are an essential part of your sales funnel - it’s how you secure new customers!

Real Estate Prospects vs Leads

What is a Real Estate Lead?

A sales lead or real estate lead is someone who can become a potential customer, but hasn’t been identified as a prospect yet. Leads can be classified as either a cold lead, warm lead, or hot lead.

Comparing Cold, Warm, and Hot Leads
Types of LeadsAre they interested in your product or service?Do they know when they want to buy yet?
Cold LeadNoNo
Warm LeadYesNo
Hot LeadYesYes

A cold lead is someone in your target market that hasn’t shown any interest in your product or service. They might not have even heard about your business, but a cold call to them showcasing what you offer can help turn them into a potential customer. This might be done by following a proven real estate prospecting script, such as when you are making calls to target a certain area (also known as circle prospecting). Cold leads take a lot of time and effort to push them down your sales funnel. Cold leads also have a low conversion rate.

A warm lead is someone that is interested in what you offer. They might have interacted with your business before, such as signing up for a mailing list or have requested more information by filling out a contact us form. Lead captured through data collection forms and landing pages are easier to enter your sales funnel, as they might have already provided the information needed to classify themselves, such as age, income, products they are interested in, and when they are looking to buy. They’ve also indicated that they are open to learning more about your product or service, compared to cold leads that might have no interest at all.

Hot leads, known as qualified leads, have done their research and are ready to become a customer. Hot sales leads know what they want to buy, but they just need to get the sales process started.

All of these types of leads are based on one-way communication. Either you have directly reached out to them through a cold call for cold leads, or they have reached out to you by providing their information for warm and hot leads, such as by signing up for a newsletter or filling out a contact us form. After this lead generation and collection phase, the next step is turning your real estate leads into prospects.

For more information on how WOWA can help you generate leads in Canada, visit our real estate leads and mortgage leads pages.

What is a Real Estate Prospect?

A real estate prospect is a real estate lead that has responded to you and has now established two-way communications. For example, if a lead had filled out a form asking for more information, contacting them back would turn that lead into a prospect. If the communication was initiated in the opposite direction, such as if you sent out a general email to your mailing list or newsletter and a lead replied to your email, then they would also turn into a prospect.

Leads are turned into a prospect because you are able to further classify them when they provide more information. While leads are based on mass communication, such as through a blog or general newsletter, a prospect now has one-on-one communication with you. This allows your contact with them to be more personalized and targeted. All that’s left in your real estate sales funnel is turning your prospects into paying customers.

Best Real Estate Prospecting Methods

1. Classify your prospects

Classifying your sales prospects can help you prioritize those that have a better potential of turning into a successful sale. During the discovery process, you would have collected background information such as what they are looking for, when they are looking to buy a home or get a mortgage, and how much their budget is.

Once you have sorted this information out, you will classify them as a qualified prospect or an unqualified prospect. Unqualified prospects don’t match the type of customers that you usually have.

As an example for residential properties, if you only sell homes in Ontario but someone contacts you looking for homes in Quebec, then they would be an unqualified prospect. For commercial real estate prospecting, you might be targeting firms that are looking for Class A office space, so you could exclude businesses looking to purchase industrial buildings. While there is some future potential in pursuing these leads, there just isn’t value in it right now.

2. Prioritize your qualified prospects

Your time is precious, but your client’s time is precious as well. Hot leads that are looking to buy a home as soon as possible or need a mortgage right now might not be so willing to wait a long time for you to contact them. If you wait too long, they might bring their business to another real estate agent or mortgage broker.

Once a real estate prospect has been classified, you will need to work it into your schedule. While you should spend more time on qualified prospects, this doesn’t mean that you should ignore unqualified prospects. Unqualified prospects can still turn into sales, so not following up on all of your leads might mean that you’ll be missing out on potential sales.

You can choose to prioritize certain prospects based on different characteristics. If you’re a mortgage broker looking to complete a lot of deals, you might want to only prioritize prospects that have a high likelihood of becoming a customer. If you’re a real estate agent that doesn’t mind your conversion rate and wants to focus on high-value transactions only, they might choose to do so to get more value and commissions out of each deal at the risk of these prospects being less likely to convert.

3. Be persistent, but not annoying

Be persistent when trying to reach your prospects, such as calling again if they missed your call or sending a follow-up email if they haven’t replied to your initial email. Pursuing your prospects can help if your email was lost in their inbox or they were unavailable on the phone, but leave time between your attempts. You’ll also need to gauge whether or not they are still interested in your service.

4. Use automation

Tools and services are available that can help make your prospecting process easier and more organized. Online customer relationship management (CRM) tools can help you track your leads through your sales funnel, schedule mass-email campaigns, send automated personalized emails to prospects that fit their situation, and schedule events such as meetings or calls. Technology can help make your sales more efficient and effective.

5. Create a daily real estate prospecting plan

Prospecting is important as it turns leads into customers, so creating a daily prospecting plan can help keep you on track with your prospecting list. Setting aside an hour or two every day is a great way to have some dedicated time scheduled just for prospecting. While going through the motions like following a prospecting script can become repetitive, your increased business will surely make up for it.

6. Network

Reconnect with your past clients to see if they know anyone who is looking for your service. These clients can help bring you high-quality referrals, or they might even be a new prospect themselves again. Attending local community events, hosting webinars and workshops, connecting with family and friends, and being an active community member can help get your name out there.

The calculators and content on this page are provided for general information purposes only. WOWA does not guarantee the accuracy of information shown and is not responsible for any consequences of the use of the calculator.