Real estate cold calling is an important of lead generation in the real estate industry. It’s a great way to contact people who have not been exposed to your business. However, it can be difficult for many real estate agents. One must understand the ins and outs of this industry and of using the approach to succeed.
In this article, we will cover what it means to cold call and cold calling tips that will help you generate more leads from the comfort of your office.
What does successful cold calling look like?
Successful cold calling is the art of making a connection with someone on the phone, for the purpose of persuading them to sit down and talk with you.
It’s not foolproof – in fact, it can be one of real estate agents’ most daunting tasks because they’re often dealing with prospects who are skeptical or downright hostile about the idea of being shown a home.
It requires patience, persistence, and strategic thinking to be successful at cold calling for real estate agents.
Successful Agents:
- Are not afraid to use the phone – in fact, they rely on it heavily as their primary lead-generation tool. Their aim is to sell a house using any strategy on the market.
- Have a process that they follow every time they call a prospect.
- Listen intently, and they ask questions to understand the situation from their prospects’ perspectives.
- Are sensitive to what makes their prospects tick – including knowing when it’s time for them to stop talking and let the person on the other end speak (or simply hang up).
- Work to gain as much information about their prospect as possible, so they can better understand what’s driving the person and how best to pitch them.
- The goal of a successful real estate agent is not just a listing – it’s repeat business from satisfied clients who love working with them.
Types of Cold Calling clients:
We can put your list of clients to call into four main categories:
- Cold. Does not know, or have very little information about your company’s service. Your aim is to set up a meeting and get to know them.
- Warm. Knows a little about your company’s service, but has not been contacted by you yet. You call to reassure them.
- Hot. Current clients who are happy with their product or services and will likely be receptive to future contact from your company. These are serious prospects you should be very concerned for.
- Lukewarm. Past clients that have had some issue(s) in the past, but may still want to do business again with you if things improve.
Types of Cold Calls
As mentioned, cold calling is key to the success of any real estate agent. It is an art that will not only help you network but also create a lot of new leads that will help spur your business.
To be a successful real estate agent, you need to know these five types of cold calling.
Expired Leads
Expired leads simply refer to the home sellers with expired listings. As a new real estate agent, it is okay to assume that such sellers are still in existence and that you can offer them some value on their listings. Don’t be shy to reach out to them and explain yourself, with the value you have to offer.
Geographic Farming
Geographic farming is a type of cold calling where you focus on just one geographical location. As a realtor, identifying a given location and cold calling all the potential leads in that location can be all you need to hit your sales targets.
This type of cold calling is vital especially if you want to establish your authority in a given location.
FSBO
Most homeowners trying FSBOs to sell their homes are never successful. The truth is, even for a real estate agent, FSBOs are never easy.
It is, however, a good idea to reach out to potential homeowners who might want to sell their properties via FSBOs and offer to help. Chances are that you will land someone who has been trying unsuccessfully to make a sale on it.
FRBOs
Most of the landlords who are unable to get tenants for their vacant houses will turn to FRBOs to try and get tenants. And even as they struggle to get tenants, not so many realtors will call them to offer help.
This presents an opportunity for a dedicated real estate agent to make leads. Cold call them and offer help to find people to occupy their properties.
Pre-closure
Pre-closure homes can actually be a lot more valuable in terms of leads than what many would want to believe. And the fact that not so many realtors are interested in pre-closure homes makes this cold calling less competitive.
Does real estate cold calling still work today?
Cold calling still works because many people don’t know about all the other ways they can get information about homes or property values without actually talking to an agent over the phone.
“We’re still getting calls,” says Broker at Realty International Group Inc., Naomi Rossman-Pacevik (Naomi).
And while these are mostly from people looking for pre-closing listings, there are still plenty of others that have not been reached.
“Cold calling is always going to be a part of the business,” says Broker at RE/MAX One Associates, Todd Ricci (Todd). “It’s how you do it and what your strategy for doing so is.”
The real question then becomes: will cold calling work forever? Probably not. But there may never come a day where people stop owning homes-and which means there will always be some form of prospecting needed in order to successfully sell these properties.
And if done strategically with an eye on maximizing efficiency while minimizing risk, this can certainly continue to be one of the ways real estate agents find new leads.
It is, however, important to note that cold calling is not an easy short-term strategy. Perhaps this explains why not so many realtors run to cold-calling to make quick money. For this strategy to work, you must have in mind that it is a difficult, long-term strategy, but it is worth it as it pays.
As a long-term strategy, you need to utilize real estate cold calling to establish as many networks as possible. It is these networks that will turn out to be a blessing for your business. Tools such as REDX Power Dialer can be vital as they will help you simplify the cold calling process.
What you need to cold call effectively
To succeed in real estate cold calling, you need a number of things as outlined below;
Accurate Phone Numbers
The first is accurate phone numbers. You may have your own database of people you wish to contact, but if the information in it has outdated details or incomplete data, then this will not serve as a reliable resource for real estate cold callers.
Also, having a consistent source for your phone numbers will go a long way in making sure that your real estate cold calling strategy is effective.
There are many ways to get new phone numbers to call. One of the best sources for most cold callers is signing up for a subscription service that can find and supply you with the best numbers. With a paid service, you will be able to save time and focus on other aspects of your business.
A database or CRM
A database or CRM will serve as a repository for all of the information related to your real estate cold calling tasks. This includes things like notes, prospects, and details about which markets you are targeting.
The best databases are those that can be accessed by multiple agents in order to allow them to collaborate on their various leads.
This is going to make it possible for everyone involved with this aspect of your business to work together more effectively, even if they’re separated geographically. With the right program installed on each agent’s computer or phone device, there won’t be any problems keeping track of who does what between appointments and meetings during the day.
Dialer
A dialer is a program that can be installed on any computer or phone device.
The purpose of this application is to automate the process of calling real estate prospects and potential clients so you don’t have to manually input numbers all day long.
This software works by taking in your list of contacts, whether they’re found through social media or from an existing database, and then it will automatically do everything for you. You simply just need to select which type of call you want (i.e., setting up appointments) and press start.
There are many different types available when searching for a cold-calling app: some offer additional features like voicemail capability while others only allow pre-set messages such as “you’ve reached my voicemail, please leave a message.”
You should be aware of the costs associated with your desired app. Some are free but offer low-quality features that include pre-recorded messages or limited call distribution options. Others charge an additional fee for each voicemail left and every time you make a phone call and can be expensive.
You need to have scripts ready
A script is a series of sentences that you read aloud to your prospect. These should be well structured and contain important information for them, such as what they need from you and how their needs fit into what you offer.
It’s best if these scripts are short, conversational in nature, easy to understand so prospects won’t get lost or confused when listening to them.
Be sure not to make any assumptions about where they might live; this will only lead to frustration on both ends because most cold callers don’t know where their targets are located at first contact. The more detailed the better. This includes addresses like city/state/zip code (not just state) but also things like – near a certain landmark? In a certain neighborhood?
To get a feeling of how a good script sounds like, read the below examples aloud;
– “Hi, Mr. Prospect! I’m calling to let you know about the latest listings for houses in your area.” (This is a common opener that will get them to respond because they’re interested in improving their property)
– “Hi, Mrs. Prospect! My name is Casanova and my company specializes in home sales by owner properties. Are you looking to sell?” (If this prospect replies yes then try out these next scripts).
Types of Cold Calling Strategies
There are a number of different cold calling strategies that real estate agents can use.
The first is asking for referrals, by using phrases like “I’m just trying to reach some people.”
- This works because the person will be more likely to take your call if they know you’re working in the same industry and have a good reputation.
Another option would be starting off with an open-ended question, such as ‘Hi! What’s your name?’. This technique should only be used at certain times though or it could backfire since there is no other content available on what type of property this prospect might want.
Something else to keep in mind when approaching someone about selling their home: always try to avoid being too aggressive. Some buyers may already know the price, and hence, you want to be careful how you present your argument. If you meet any objection from the seller or the buyer, do not push too hard.
It’s best to show your client that you’re a professional real estate agent who can help them and not another person trying to pressure the prospect into selling their home. This is a good way to earn more points and get more houses sold.
The last tip for cold calling is asking what they are looking for or in need of, then transitioning into making an offer on a property if it matches those needs. This might seem like too much but research shows that this technique actually works well because people want more than just one thing done at once. People don’t care about single tasks so proposing multiple solutions will keep prospects interested even through potential objections.
Example: “Hi. What kind of properties do you have an interest in? I would be happy to talk with you about available listings.” You could also say something similar to “I would be happy to talk with you about a real estate property that I think will meet your needs.” This line of questioning allows the prospect to feel like they’re in control and are making decisions.
Be sure to download any material you need to present your case. That way, you always get straight to the point when you want to answer any question. Spend time studying the market, even a week before calling the client. That should help you every post-calling to make proper follow-ups.
It’s important as an agent, when cold calling prospects on behalf of clients, not to come across as too aggressive or pushy. Be firm but professional with questions and make sure any information is relayed concisely without being invasive.
If someone seems uninterested in speaking with you it could mean they aren’t interested at all or just need more time for consideration so don’t take offense if this happens often. Asking them what their thoughts are after sharing why you called can help determine how open these people actually are for conversation.
What is the success rate of cold calling?
Real estate cold calling is an essential strategy that every realtor needs to incorporate if he wants to realize success. As of 2020, the success rate of cold calling in the US was 2%.
This might look like something small, and might even get you discouraged. But guess the percentage of agencies that recorded a decline in their business due to lack of cold calling, a whopping 42% as compared to those that did.
A study by Keller Center at Baylor University shows that in America, it will take a cold caller 12 hours of calling and 208 cold calls just to land one listing, referral, or appointment.
Is there a law governing telemarketing in the US?
Yes, cold calling in the US is governed by telemarketing laws. These laws include the Telephone Consumer Protection Act which prohibits real estate agents from calling potential clients on the number that are on the Do Not Call Registry.
This act provides for a fine of up to $1,500 per violation. But if you have a dialer, then you don’t need to worry as most of them automatically check the number on the Do Not Call registry and don’t call them.
What is the best time to make cold calls?
For your cold calling strategy to be effective, you need to identify the best time to cold call. Inman says that between 10 am and 2 pm are the best times to call, and you can get a higher conversion rate compared to other times.
But you don’t have to stick to Inman’s time, you can try out your own time and find out which time works best for your business.
A study by CallHippo in 2017 found out that the best time to cold call is between 4 pm and 5 pm. But to be sure which time is best for you, you need to keep trying to find out. However, it is never a good idea to call too early in the morning or too late at night.
Final Thought
In a few years, cold calling for real estate agents may not be as effective because of the existence of internet marketing and social media.
However, it still provides an opportunity to connect with potential clients in person if done correctly. The law governing telemarketing is complex but there are some general guidelines you can follow when making calls without fear of prosecution.
If you’re trying to get more sales from your business today, consider how long people have been on the phone or online before they make their purchase decisions.
You may want to time your call towards the end of this window so that prospects don’t feel pressured by other purchases they’ve made during their browsing session or while talking with friends over a coffee break at work.
What do you think? Let us know in the comment section.
