All house seller leads are not created equal. If you base your real estate investing process on the assumption that all leads have the same value for your business and that you can use the same methods to close them, you are in for a rude awakening.
I mean, always give your best shot (never give up on a motivated seller lead that is in your funnel), and try to follow up several times, however, the probability to close a deal is different for each lead. And you need to make a decision about the leads that are worth your time.
That’s where lead qualification comes into play. Real estate investors create systems to qualify leads – this is one of the essential in-house processes. We will check out some of these methods, but we will also discuss ways to obtain leads that are already qualified when they enter your funnel.
Is there a particular signal that clearly indicates to your real estate investing team that a lead is hot? Of course there isn’t, especially if you are looking for one indicator that will provide a definitive answer. However, if you take multiple factors in consideration, you should be able to sketch up the general features of a motivated seller lead. Those real estate investors who’ve handled leads in the past can compare this sketch with the data on closed deals in their system.
Soon enough, patterns emerge and they show that the ideal (hot) lead has three features:
As you can see, it revolves around communication, or who contacts who, how the contact is made, and whether the communication channel is exclusive.
You already know this – the inbound leads in your CRM are hot. The property owner is interested enough in the transaction to act on it. You still don’t know whether they need to sell or they want to sell, but they are proactive, and this is a good sign.
Some marketing channels allow you to qualify the audience even before the contact is made. For example, if a house owner calls on a number provided on a bandit sign, they are likely motivated. Or if the copy of your Facebook ad includes something like ‘Do you need to sell a house fast?’, chances are they wouldn’t watch the ad if they aren’t motivated to sell. Same goes to search engine users who act on their interest to sell, and that’s how they find you (more on this below).
You know that a lead is hot when the owner is open and willing to share information about the property. The information-gathering process can be done through different mediums – it can be a lead capture form, a phone call, a virtual or in-person meeting. If they cooperate and provide detailed info on the property, that’s a sign that they want to proceed with the transaction.
If someone fills only two fields in the form when they land on your website, their motivation to sell is probably not high (or they don’t trust you). It’s easier to gauge their willingness to share information through a conversation. If you need to spy on prospects to obtain their property data or personal data, chances are they aren’t as motivated. And they might even object to the means you used to target them with a campaign.
Bear in mind that we are discussing the ideal motivated seller here. If the property owner doesn’t talk to other real estate investors, that’s a sign that they are seriously considering going ahead with the transaction.
The best example of this type of motivated seller are leads on off-market properties. Sometimes, real estate investors ask owners to pull the property off the market as a way to gauge the seller’s willingness to close the contract.
You can use these three indicators to pre-qualify your house seller leads, but don’t base your decision-making on these indicators alone. Leads might reach out to you, and still not be motivated. The owner might share property info with you, and still not complete the transaction. You might believe that the property owner talks exclusively to you, and still other investors can snatch the deal from you. These things happen in the real estate investing industry, and some examples of this can be even found on YouTube.
What’s great about these benchmarks of ideal house seller leads is that you can immediately check them out. It’s easy to find out whether you reached out to the property owner, or it was the other way around, and if the lead was helpful in providing info about the property.
Once you have these indicators in mind, it’s easy to think of ways to get qualified seller leads. We listed them out below, so let’s check them out.
Of course, here we refer to using Google Adwords to target search engine users. Google Ads allow marketers to qualify leads based on location, but unfortunately this can’t really be used to find motivated sellers because if you bind the campaign to a set geographical area, you might miss out on absentee and out-of-state owners.
What Google PPC Ads do for real estate investors is actually much better. PPC ads allow you to qualify search engine users based on the keywords that they type in the search box. You can further specify the audience by choosing different keyword match types and by excluding negative keywords. Negative keywords in particular help you get rid of users who’ve typed unrelated searches, like ‘sell my house furniture.’
PPC is very successful as a lead acquisition method because your ad appears exactly when the search engine user is looking for business like yours. You make it easy for motivated sellers to find you and reach out.
Speaking of search phrases as a way to qualify incoming traffic, we can’t skip organic traffic from SERPs. The work that goes into optimizing your real estate investing website takes time, but once your site starts to rank high when house sellers type certain keywords, you will get fresh leads.
In this case, the website design plays an important role as well. You can use the landing page to qualify leads, or you can add specific questions in the form that can help you gauge motivation of a new lead (for example, how long have you owned this house?).
On-site qualification of leads has its limits though, and at some point you’ll have to talk to the house seller (we will expand on this further below).
When property owners list their house in real estate listings, they qualify themselves as someone who is likely to be a motivated seller. This applies to those who file their listings in the FSBO (for sale by owner) category, the expired listings category, or those who specifically state that they want to sell their house without hiring a real estate agent.
This is when the county sells tax delinquent properties through the Sheriff’s office, or the bank is selling a house that served as a collateral for a loan. There isn’t a motivated seller in this case, however, the leads about houses on public auction are hot.
These leads don’t need qualifying, the bank or the county simply wants to recover the amount that is due. You can’t base your business plan on this stream of leads, though. Also, sometimes these auctions turn into bidding wars to the point where buying the house in cash as an investment is no longer profitable.
Property owners take a proactive stance when they find your real estate investing business through these three channels for house seller leads (PPC, website traffic and listings). You sort of meet them halfway in the process, and this is close to the ideal motivated seller we spoke of above. Now, let’s turn to instances where you reach out to property owners.
The traditional method for reaching out to property owners in real estate investing was direct mail. Now, we don’t hold any grudges against direct mail marketers, in fact we have covered direct mail campaigns at length on our blog, and we recommend that investors use letters and mailers in their multichannel marketing strategy. But the process of lead qualification has to be more robust if the lead comes from direct mail.
This is because campaign managers scan public records (for example, code violation properties) or they use data service (by correlating data points) to create a motivated seller list. Even if real estate investors use multiple filtering categories to come up with a group of property owners that is more likely to contain motivated sellers (i.e. the tired landlord lists), some level of guesswork is still included in the process.
Once a property owner responds to the campaign, you have to act fast to determine if the lead is hot. But until that happens, you simply wait for the phone to ring.
While the content marketing through your social media feed can’t help you to qualify the seller leads in a meaningful way, you can definitely use ads to chase a specific type of deals.
Facebook Ads are the best example of this. The level of targeting that is offered by Facebook can be used to qualify the audience before you launch the campaign (for example, only show the ad to homeowners). The ad copy and the format of the lead magnets can allow you to qualify house seller leads. It’s going back to prospecting basics.
You can use many marketing channels to launch a campaign for finding motivated house sellers. Regardless of the channel that brought a seller lead in your funnel, you still have to set up a system to qualify the leads. Yes, sometimes property owners are proactive and reach out to you, they are willing to share the necessary info with you, but still, you need to check other stuff as well. For starters, you need to check whether you want to proceed with the deal.
Real estate investors separate prospects through a system that feels most natural to them. One popular way to do this is to create at least two categories of leads: non-viable (those you don’t want to get involved in) and viable (those where both you and the motivated seller are a good fit for each other). Once you identify the viable leads, you can further grade the level of motivation based on relevant criteria like:
so that you can assign the appropriate workflow from there onward.
These are the prospecting methods which were usually employed by real estate investors in the past. Things like door knocking, driving for dollars, or cold calling. These leads can be qualified right away, especially if the cold call goes well, or if the property owner answers the door.
However, there are two issues with these methods: they are time consuming and the person that is using them is likely to face rejection. Because of this, the task of qualifying leads gets delegated to junior lead acquisition staff. You want your closers to close hot leads, and not to handle lead qualification full time.
This only works if your real estate investing team is big enough for you to even have acquisition managers to begin with. If you are yet to scale up your real estate investing business, you can outsource this task to someone else.
Solopreneurs appreciate the option to outsource lead qualification to someone else. We are referring here to answering calls, door to door prospecting, or cold calling. For instance, there are companies who specialize in providing call services to real estate investors (like CallPorter) and they can sort the initial lead qualification for you.
There are some tweaks you can make to your ad copy to qualify the audience, particularly in the initial stage of prospecting. When you include something like: ‘are you a house seller who needs to sell a house fast?’ or ‘we buy houses in any condition’ you are already using qualifying ad copy.
You can adapt the copy to express your unique selling proposition and qualify the potential leads at the same time. For example, if you specialize in deals on properties in probate, you can state this explicitly in the ad, and those who will end up clicking on the ad are likely to have a house in probate on their hands.
Even if you outsource the initial lead qualification or someone else in your company does it for you, at one point a senior representative (decision maker) will have to talk to the house seller. The use of scripts during the interview is standard when you want to move ahead and submit an offer.
These scripts are not used because real estate investors don’t know how to qualify a lead, rather, the script is just an aid that will help you not to omit details about the property or its owner that are critical for the offer.
This is a process, and as you gain experience with these scripted interviews, you will learn that lead qualification is a delicate process. The list of questions is standard:
When you do this, keep in mind that phone conversations make some people behave in ways they wouldn’t behave during an in-person meeting. For example, if a house seller declares that they won’t accept an offer below a specific price point, remember that this can change over time.
Also, the dynamic changes when you include a different member of your team in the sale. Dara Abasute, in an interview for our REI Marketing Nerds podcast, wasn’t shy to admit that her mother closed deals that Dara practically blew – and they both work for the same company.
It’s difficult enough to determine motivation in a house seller as it is, and this doesn’t get easier as you progress down the lead funnel. Does your house seller want to sell? Or do they need to sell? There is no secret formula that will work for every potential motivated seller.
You can use lead metadata to make the process of qualifying inbound leads more easy. Details about the acquisition process, the source of the lead (the type of audience it came from), the marketing channel that brought the lead in your CRM – this is all metadata that can help you to decide what to do next.
However, you shouldn’t overestimate the importance of lead metadata, especially in an industry like real estate investing. We have always recommended that real estate investors set up follow-up processes if they want to make the most out of each lead. The script might be faulty, the team member may misjudge the motivation, and the circumstances for the house seller might change as time goes by. Follow-ups help straighten out this issue.
And if the lead you ended up with doesn’t work for you, you can offer it to a realtor or other investor who can provide a better – or different – service than you. This is counter-intuitive, but it works. If you pass on a lead that’s not for you, you will build a relationship with both the realtor and the house seller, and this might bring you a referral down the line.
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