Many agents spend a lot of time prospecting FSBOs and expired listings. That means that when you call one of those homeowners, you’re coming up against a large number of other real estate agents who are also prospecting those groups. That can result in frustrated homeowners who doesn’t want to talk to yet another agent.
- Circle prospecting can help you build a listings-based business that provides ongoing, steady income, but it’s a long-term strategy that takes follow-up and consistency to a whole new level.
Many agents spend a lot of time prospecting FSBOs and expired listings. That means that when you call one of those homeowners, you’re coming up against a large number of other real estate agents who are also prospecting those groups. That can result in frustrated homeowners who don’t want to talk to yet another agent.
Perhaps a better way is circle prospecting, contacting homeowners in a radius from your most recent sell or list in the area, or geographic farming as it may be called in your market, which involves choosing a neighborhood and making contact with as many homeowners as possible within that area.
In addition, you may use a recent sale, current listing, open house or other element as a way to initiate a conversation and connection with homeowners in that area.
The purpose of circle prospecting is to begin building brand recognition in a particular neighborhood, to build more relationships with local homeowners, and over time, to win listings consistently in that area.
This allows you to focus your marketing efforts, budget more effectively and to become the go-to agent for a particular neighborhood or ZIP code.
Digging into the data
If you are data-driven, you may choose to prioritize the homes you contact by looking at the year the home was purchased or other indicators to try to guess which owners might be ready to sell.
You can also look at homes purchased during years of major market corrections to guess who might have more equity in their home, and thus, be more open to listing.
Ultimately, whatever strategy you use, the success of your prospecting comes down to the quality of the contacts you make.
In the competitive market, local agents and brokers have to be effective with their advertising and conversion, said Andrey Nokhrin, CEO of FLIPT. Displaying the right ad at the right time to the right people and having an effective process to build relationships proactively gives agents a competitive edge.
“The key to winning homesellers’ business is to start building relationships with them before competing agents,” Nokhrin said. “Only 1 percent to 4 percent of homeowners in a given area are ready to sell right now, but wait three to six months, and that number can go as high as 15 percent.
“Wait six to 18 months, and you may be at 30 percent. This is a long game, and consistent nurturing of those leads can create a steady stream of clients.”
However, many real estate agents are looking for clients right now, thus they call or door-knock once or twice, don’t generate any “hot leads,” then give up, moving along to another neighborhood.
“People are getting exponentially busier. People get more email, more calls than ever before. At Flipt, our data shows that a client needs 20-plus touches on average before they even get to a meeting with the interested homeowner. Those who phone or email one or two times are leaving most of the sales revenue on the table,” Nokhrin said.
He continued, “Many real estate agents struggle with conversion, following up with a call or email only once. More than 90 percent of agents or brokers give up and stop following up after the first two weeks. And 52 percent of homeowners in our studies reported never getting a follow-up from the local expert.”
Creating a circle prospecting plan
So what do you do to ensure your circle prospecting is a success?
Look at neighborhoods you know well, enjoy working in and have either recently sold a home, helped a buyer find a home or are otherwise connected.
Do some research to gather as much contact information as possible. If door-knocking is part of your lead gen process, that is a great way to make an initial contact.
During your walk around the neighborhood, you may see a house that is in disrepair, or you may find neighbors who tell you about someone who is an absentee owner. Make notes, and create a database that gives you a thorough picture of what is going on throughout the neighborhood.
Use the information you have on the current market and the particular neighborhood you are prospecting to create a market snapshot or an individual CMA for homeowners in the area.
For those homeowners with whom you are able to make contact, offer to drop by so that the cost of improvements can be added into the valuation. That helps get your foot in the door and allows you to connect and build relationship with the owners.
As you continue to reach out, make sure you are providing great information whenever you contact the area’s homeowners so that they see you as a local expert rather than an annoyance.
Try to connect on social media or run ads targeted at the particular area you are prospecting. Facebook allows you to create ads aimed at people who live or work within a specific radius around your target neighborhood.
Create a neighborhood Facebook page, and boost it to the target neighborhood or join one if it already exists.
Make sure you are providing valuable content there on a consistent basis, preferably daily. The idea is to be everywhere these homeowners are, whether it’s online, in the mailbox, on the phone or actually in the neighborhood.
Over time, this will help you build brand awareness so that you become the trusted local real estate agent.
Continue to reach out over time with a variety of different materials including CMA reports, monthly market updates, information on neighborhood events, success stories and anything else that might engage the homeowner in a conversation.
According to FLIPT’s research, the vast majority of responses begin coming in by the 23rd or 24th contact. One or two contacts is not enough. One or two weeks of prospecting is not enough.
Circle prospecting is a long-term strategy to generate a consistent and strengthening connection to the chosen neighborhood.
Circle prospecting can help you build a listings-based business that provides ongoing, steady income for your real estate business. Stop looking for quick fixes, and implement this long-term strategy to create a foundation for success.