The Major Differences Between Real Estate Leads vs Prospects

There is one thing that I hear consistently from real estate agents…they just need more Leads! “Wade…if I just had more leads, I would have a lot more business to send you.” The big myth in the real estate business is that more leads = more business. Not true. The word “Leads” gets thrown around way too much, not just in the real estate space, but in most business. The title insurance industry is no different. I hear inexperienced title reps talk about their Realtor/Lender leads as if these people are practically clients already, though they haven’t had any sort of commitment for business. I then like to ask these Realtors, Lenders, and Title Reps about their “Prospects?” There are major differences between real estate leads vs prospects. They are nowhere near the same thing. Once you learn the differences, you will never treat those “leads” the same way again.

Who is a Real Estate Lead?

A real estate lead is anyone. The 5 people in front of you at Starbucks in the morning are ALL “leads.” The guy or women walking by you on the street is a “lead.” A lead is anyone who can potentially become a client down the road. A lead is NOT someone who is automatically going to buy from you right now. That is why the lead conversion percentage for Realtors is about 2%. IF these leads were so amazing, wouldn’t the conversion percentage be 90% or higher? Why is it so low? Because these leads are not qualified. They are people who are fishing for information but have not learned enough about you “first” to make an informed decision to do business. Thus, making the conversion to a client very difficult, time consuming, and a low percentage.

When you hear a Realtor talking about how they need more leads, want to buy leads, if they just had more leads, etc, I tell them what they really need are “Qualified Referrals” or “Real Estate Prospects!” The conversion percentage is higher, sales cycle is shorter, and they are more likely to refer.

Who is a Real Estate Leads vs Prospects?

When it comes to real estate leads vs prospects, you are talking about 2 totally different people. Who is a prospect? A prospect is a “lead” that is qualified by their interest in working with you. These are people that have expressed direct interest in buying or selling a home by reaching out through a direct referral from a friend, online source, outbound marketing method, or face to face meeting. These people have usually done their homework and read about you and your business online, heard good things through a friend, seen an online testimonial that made you the “thought leader” in your area. Real Estate prospects have a higher level relationship with the real estate agent and are in a position to buy or sell with them in the near future. Sounds different than a lead right?

Re-thinking the Business Model

When working as a Realtor, Lender, or Title Sales rep, time is of the essence and working smart and efficient is a must. When building your business it isn’t necessarily how many leads you have, but are they qualified prospects that can and will become paying customers? Wasting your time chasing down random leads will cause frustration and anxiety.

A good example of this is as follows: When at the mall, walking directly to the store you want to shop, there is a good chance you walk by several kiosks with people selling random items. EVERYONE walking by them is a Lead. 99% of the people ignore them and keep walking even though the sales person is asking for you to come check out their product. The people that stop by and check out the product or start asking the salesperson direct product questions is a Prospect. You would probably agree that the people who stop and ask questions about the product are far more likely to buy something vs the 100 other people just walking by being called out to by the sales person?

The riddle for you, is HOW do you get the people to become interested enough to walk over and ask the buying questions? Once you have this figured out, you will have more clients than you know what to do with. Learning new, and efficient real estate marketing strategies and lead conversion methods are step #1. Working your database (data-bank) is also a key. Becoming a Relationship Agent instead of a Transactional Agent is another way.

Takeaway

It is very easy to get caught in the mindset that more leads means more business. In reality, the more qualified prospects and referrals you have, there is a much greater chance at converting them into paying clients. Finding the right marketing methods to attract these real estate prospects is the key to expanding your network and business. Real Estate Leads vs Prospects…you decide which is best for your business model. If you are a Realtor or Lender looking to expand your business and need assistance, or are looking for a new Title Company relationship, take a moment and fill out the form below and I will contact you!

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DCTitleWade1

Senior Vice President of Business Development at Pruitt Title

I'm the Senior Vice President of Business Development for Pruitt Title in the Washington DC/Northern Virginia area. I help my Realtor and Lender partners grow their businesses with offline and online marketing solutions. More eyes to them mean more business. I create the win/win!