Acknowledgements
The 25 years I’ve spent as a Real Estate Agent and Broker have been an exciting adventure. The people who have helped me to perfect my prospecting programs are too numerous to mention, but I do want to thank some of the people who have significantly contributed to my programs (while hopefully not leaving anyone important out):
Theresa Keim, Tim Mahon, Ellie Barrett, Wayne Talaber, Mae Gunn, Judy Mazzeo, Marc Lucarelli, Joe Bartera, Pattie Hartman, Deb Hartman, Bonnie Smith, Kathy Reither Ziegler and many others!
I also want to thank
the people who assisted me with editing and compiling all this
information:
Betty Broadbent, Amanda Karpeuk, Keri Schlosser.
And, of course, this list wouldn’t be complete without acknowledging some of the greatest real estate trainers in the country. I highly recommend anyone reading this book take the time to learn from each of these highly gifted trainers:
Floyd Wickman – www.FloydWickman.com
Joe Stumpf – www.byreferralonly.com
Dr. Dick McKenna – Co Creator of the Orbit Program
Ralph Williams – Co Creator of the Orbit Program
Chapter 1: Introduction to Prospecting
In 1990, I stepped off a stage in Philadelphia after receiving an award for being one of the top producing agents in the State. A fellow agent from a competing firm sauntered up to me and snidely asked how I could possibly have sold so much Real Estate. I was 24 years old, but I looked like I was around 15.
The thought that went through my mind was that the reason I was successful was that I had to be. Financially, I was in deep trouble, and I simply had to sell a lot of properties or I would not only go under, but I would take down other people who I cared about with me. As the saying goes, necessity is the mother of invention. I became a top producer because I had to become a top producer.
Years later, I met an agent from Florida at a workshop who told a story of living in the attic of a barn and mucking out stalls for a living. She started selling real estate part-time in order to earn enough to get a decent apartment. A few years later, she was earning more than a million dollars a year in commissions.
Some of the top agents I’ve had the opportunity to meet with over the years have included people who started their careers while living on someone else’s couch, or were the sons and daughters of immigrants with no background, connections or money when they first arrived in America. Yet, they became huge successes in the field of real estate.
Desperation is often the linchpin that drives us to those huge successes. I entered the real estate industry in the mid-1980s to help pay my way through college. By 1986 and 1987, the market was skyrocketing in the Northeast, and I started making a very good living simply sitting around waiting for the phone to ring.
In my incredible naivety, I thought the market was always like that. I could simply advertise a home, wait for the phone to ring and sell a few homes from the incoming calls. In 1988, my head had swelled up to roughly the size of a watermelon, because I was making more money than any of my friends and, therefore, thought that I was smarter than everybody else.
I talked my father, who at the time was a local school administrator, into buying into the local Century 21 franchise, and then into opening 3 branch offices in “growth” areas and finally into a land development. He mortgaged his house to the top of its value, and we borrowed other money at high interest rates. I wasn’t worried, because I could always make more money, right?
1988 was the year of the great real estate crash in the Northeast. Property sales didn’t simply slow down, they virtually stopped. My father had been looking forward to retirement, and we now owed nearly a million and a half with no substantial income to pay the payments. Although it’s still a big sum today, in 1988, a million and a half was a huge sum of money. If something didn’t happen quickly, he was going to lose his home and I’d be a large part of the reason because of irrational exuberance about the real estate field.
I was not someone who ever wanted to call a total stranger or knock on someone’s door, but I also knew that I had to do whatever it took to find buyers and sellers. My father juggled numbers and credit, and I started calling expired listings, some for sale by owners, farming neighborhoods and sleeping very little. I wasn’t really taking home much money because I was working simply to pay that huge debt.
We survived and came through the several year downturn in the market like a sling shot. At the time, however, I didn’t think there’d be a day after tomorrow. I thought I was buried in a deep hole and would never see light again.
What really helped to save us, while many of our competitors closed their doors, was finding ways to capture a larger share of the real estate market and create business. There are always sales occurring in any market, good or bad. There are always buyers and sellers in the marketplace who want or need to buy. Some need to buy or sell because of job relocation needs. Others may have leases ending, a baby on the way, a pending divorce, a death in the family, or any number of reasons.
The key is identifying those people who truly want or need to move, and finding a way to meet with them. This concept of identifying and targeting likely buyers and sellers is called prospecting.
What IS Prospecting?
Many years ago, I found myself without a date for Valentine’s Day. It was February 11th and I was in my mid-20’s. I had recently broken up with a long-time girlfriend and wasn’t sure what I wanted in a relationship. So I went to the local florist and ordered a dozen roses. I then asked the florist to send one rose to each of twelve different young women I had selected. The florist said “You’re kidding, right?” I wasn’t. That’s called prospecting. Select a target audience and let them know you have something to offer them.
In the Real Estate Industry, as in most sales professions, prospecting is a dirty word. Far too many Realtors enter the field of Real Estate believing they can wait for the phone to ring and earn an above average income if they only select a brokerage with great advertising. Most new agents, as they venture into this endeavor, expect that the company will generate leads for them. While it is true that most good real estate organizations generate some buyers and sellers from the advertising done by the company, you will not make a great living at any company waiting for the phone to ring. That is the kiss of death in the real estate industry.
Prospecting, however, is not simply picking up the phone and calling possible buyers and sellers. To be effective, prospecting must be a consistent planned process. Your goal is to create a steady flow of business into your pipeline that will result in an above average income.
Your business will build like a wave over the long term of your career if you deliver exceptional service. Starting small, it can grow to tsunami proportions as more and more of your past clients, business associates, friends and relatives refer you business. It’s a process to create those referrals, and you have to survive long enough in the industry, making a living, until you have a database of people who like and trust you that will continually feed and expand your business and client base.
There are two fundamental truths about prospecting.
The first truth is that you must prospect consistently to be successful. Set aside time each and every week to perform the task. If you don’t block out time, other stuff will get in the way. “Well, Loren, I couldn’t prospect today because I really needed to go shopping for groceries, and I had an out-of-town client, and I had this awful hangnail.” My experience with training hundreds of Realtors over the years has taught me that prospecting is the hardest part of any real estate career. The number one reason that Realtors fail in this industry is that they fail to schedule the time to find prospects. This is particularly important early in a Realtor’s career. In the long run, Realtors who deliver exceptional service receive many referrals from their clients, which limits the amount of prospecting successful Realtors need to do. However, when building a real estate business for yourself, you need to look at the various options available to seek out qualified property sellers and buyers.
The second truth is that prospecting is a process, not an event. Some real estate trainers teach Realtors to randomly pick up the phone and call people until they get an appointment. A much smarter approach is to carefully select a target market that you feel is not being serviced, or where you may find a competitive advantage, and lay out a game plan to target that audience. The game plan will include a method, or several methods, of contacting the target audience, a reason for your contact or something of value for the group you’re prospecting, and a systematic way to follow up with that group.
The Prospecting System:
There are four steps to a successful prospecting system.
1. Select Your Target Market
2. Select Your Method of Contact
3. Give Your Prospect Something of Value
4. Follow Up Consistently
Selecting Your Target Market
When I opened my first real estate office in Allentown, Pennsylvania, I was competing with a huge company that advertised their firm was involved in 1 out of every 4 sales in my marketplace. There were many real estate companies and offices, but one stood out as the giant that we all had to compete against. This huge independent real estate firm, which we’ll refer to as “M”, had hundreds of agents, their own real estate television show and marketing brochures that I could only dream about.
So why bother competing? Partly because I didn’t like the corporate feel of the large company, but mostly because I wanted complete control over my own transactions. I’m sure my ego figured in there a bit as well.
Since I was too small to compete head to head with such a behemoth, I dusted off my copy of the book “Marketing Warfare” by Reis and Trout, a book I highly recommend, and went to work on guerilla tactics for building market share. Reis and Trout explain that a small company should find niche markets. Clients like specialists, or someone who understands their particular market. A particular market can be a type of property, a particular area, or a combination of both.
We searched to find areas of real estate specialization that appeared to be ignored by the larger companies. The first target we selected was Historic Homes. Pennsylvania has plenty of stone Farmhouses, post-revolutionary brick Colonials, Victorian homes and many other unique dwellings with character. In order to attack this market, we began compiling a list of all the historic properties in the Lehigh Valley market area, where Allentown is located. At the time, we had to do this research from microfiche records because computer and Internet databases didn’t yet exist.
In order to target this market, we started mailing letters asking them to call us if they were shopping for a “Historic Homes Specialist”. The calls were few and far between. We decided to improve our message by giving the group something of value. We created a specific newsletter that we mailed to the group that had information on other historic homes, information on restoration techniques and other articles that owners of this type of property may find useful. We found that these newsletters had a much longer “shelf life” because the owners would hold onto them, and we received more calls from this group.
Next we started setting up free workshops that would be of value to our target group of historic home buyers and sellers. I remembered attending a speech by the market guru, Jay Abraham, who explained that a salesperson can be perceived as an expert in a particular market or in a specific product by giving lectures or workshops.
We researched restoration projects and designed our free workshops to provide information on restoring historic homes. We provided tips to keep period character with modern functionality, and we even held seminars on financing these homes.
Finally, we sent announcements to the press explaining that we were the historic home specialists. The largest local newspaper, The Morning Call, ran a full page article about our team on the front page of the Real Estate section. Other magazines, such as PowerSource, also quoted us as the experts on historic property.
Although my team and I had learned a significant amount about historic homes, we had known very little when we first selected that audience as a target market. We had to research the marketplace and the needs and concerns of buyers, sellers and property owners in order to fully understand how to help them.
Our second target was equestrian properties. Like historic homes, we felt this group was not being specifically marketed. We researched the wants and needs of horse owners and created a marketing program that included advertising in equestrian magazines and a newsletter that went out to prospective horse farm buyers. As the World Wide Web came online, we created several websites that specifically targeted horse farm buyers and sellers. You’ll find many of my articles on buying and selling farms all over the web today.
This program of targeting specific groups and creating a marketing program specifically designed to their needs was repeated with restaurants, liquor licenses, bank foreclosure departments, luxury properties, investment properties, corporate relocation departments and many other target groups. By the time we had completed our fifth or sixth target market, we had market share in virtually every part of our market area.
In Chapter 2, we’ll outline many of the possible target markets and information on those markets. The important thing is to carefully select the group you plan to work with and build a business to the needs of the clients.
Selecting Your Method of Contact
There are literally hundreds of methods of contacting prospective buyers and sellers in your marketplace. Methods may include phone calls, door knocking, emailing, mailing, and some special deliveries. Some of them are quite fun, like delivering flags, pumpkins or hay boxes. We’ll discuss these methods in detail in Chapter 6. All forms of prospecting, however, fall into 3 primary categories:
Hope For It - Reactive Marketing or Prospecting includes advertising on shopping carts, park benches, in the newspaper or on the radio, and waiting in the office for the phone to ring so you can pick up a client. You will never become rich waiting for the phone to ring. You will be at the mercy of the market. Whether you’re on floor time / opportunity time or specifically advertising for clients, it is unlikely that an agent will be successful by simply attracting clients through marketing. There are some methods we will outline in Chapter 4 to improve your odds, however.
Wait for It – Proactive prospecting that is long term - Long Term Marketing is generally another passive form of seeking clients. Mailings, postcards, and similar methods generally produce very few immediate clients. Regularly mailing to organizations or individuals who are likely to buy, sell or expand in the future may bring business to an agent in the future. Joining referral or community organizations and promoting yourself regularly may bring future business as well.