The "P" Word

What's the key to building your real estate business year after year? Prospecting. Unfortunately, many agent's suffer because of their fright of prospecting. Jerry Pujals describes "the p-word" phenomenon and identifies key prospect groups in his article in Broker Agent News:

If there were one word to describe the ability to produce at higher levels, it would have to be "the p-word." That's right? Prospecting! Unfortunately, prospecting is probably the one task 95% of real estate agents avoid. Why? Because they're terrified of it.

We've all seen it: an agent who spends the majority of his time wondering what to do next, walking the halls, making water cooler talk, and babysitting the one or two deals he has in escrow. Deep down he knows he should be prospecting to generate new business, but he's just too scared to do so.

Whether you are a new agent or a veteran who wants different results, you must learn to love prospecting. Answer this: If you could earn an extra $200,000 per year by spending a mere two to four hours per day prospecting, would you do it? For most people, the answer is a resounding "yes."

However, most agents do anything possible NOT to create additional business. As simple as prospecting is and as handsomely as it pays off, it's still the single most difficult thing to get people in the real estate industry to do. But when done effectively and efficiently, prospecting can change your career.

Who to Prospect

Prospecting is actually simple when you know what to do. Following are some suggestions for focusing your prospecting activities.

Past Clients. The first category of prospecting should always be your past clients. That's obvious, yet many people neglect their past clients, even those they had incredible transactions with. This leaves the client with a negative impression. They think all real estate agents care about is getting the prize (the check), and then they're done. The ripple effect of this negative impression is huge. Therefore, you must prospect past clients on a regular basis.

Current clients. The second category is to call your current clients. Most agents forget to call their current clients even though they're talking about client loyalty all day long. But you must call your current clients, especially while they're happy with you. Sometimes, at the end of the transaction, they might not be happy with you anymore. So why not get a referral out of them when they're happy with you?

SOI. The third category is your SOI, which stands for Sphere of Influence. These are the people you refer business to who should be referring business back to you, like the lender, the title company, the insurance person, the home warranty company, etc. You refer these folks a multitude of transactions every month. Have you ever prospected them and asked if they would refer people to you? If they do not refer others to you, maybe you need to consider hiring somebody else who might reciprocate.

FSBO listings. The fourth category is FSBO listings. Any property that has a For Sale By Owner sign is being sold directly by the seller. We know that over 87% of properties that are for sale by owner will eventually be listed with a real estate agent. Therefore, you must call these people, show the value you can offer, and get the listing.

Expired listings. The fifth category is expired listings. Any listing that's expired becomes open season. If you have a lot of expired listings in your area, you must call them. If their property didn't sell and they didn't re-list with their current agent, it means one of two things: Either they decided not to sell for some reason, or they have a reason not to re-list with their current agent and are actively looking for a new agent. Why shouldn't you be the new agent for them?

Just listed/Just sold. The sixth category is those people who live in the same neighborhood as a house that has just sold or listed. On these calls you're just letting the person know that a neighbor's property got listed or sold, and you were calling to find out if he or she was thinking of moving.