Real Estate Lead Qualification Techniques

Most of the leads that flow into your business won’t be qualified leads. But the exceptional few will be worth tens of thousands in potential profits.

So how can you separate the qualified from unqualified leads, and what do you do next?

Follow these simple steps to distinguish qualified leads, and move them from lead to appointment to offer to closed property.

Qualifying Questions to Ask

When a lead comes into your pipeline, your first priority is to get the prospect on the phone.

From there, you can ask a series of qualifying questions. We use the SPIN technique, which includes four types of questions: Situation questions, Problem questions, Implication questions, and Need-payoff questions.

Going through these questions with the prospect achieves two goals. First, you collect the information you need to qualify the lead. But just as importantly, these questions lead the prospect to conclude on their own that they could use your help — without you having to make a hard sales pitch.

The SPIN technique breaks down into the following question categories.

Situation Questions

In the beginning, start with a high level overview of the prospect’s situation. Ask questions like:

Can you tell me a little bit about your property?
How long have you owned the property?
Do you live in the property? If not, is it vacant or occupied by a renter?
Have you made any updates or renovations to the property recently?
Are you aware of any issues or needed repairs at the property?

Note that the first question is open-ended — that’s not an accident. Let the prospect tell you about the property and situation in their own words before you start drilling down to more specific questions. Often prospects share vital information that you wouldn’t necessarily have asked about. Give them plenty of room to tell their story in their own words, rather than rushing into a rigid Yes/No checklist.

Problem Questions

Once you have an overview of the prospect’s situation, you can start edging closer to their motivation for selling: the problem that’s creating urgency for them. If they had all the time in the world to sell, they’d probably just list the property on the MLS, after all.

But you also don’t want to put them on the defensive by firing pointed questions at them like “Are you in foreclosure?” Gently steer the conversation toward the prospect’s true problem or motivation with questions like:

What made you consider selling your property?
Have you had any difficulty in finding a buyer?
What challenges have you faced with your property?
Are you facing any financial challenges that would be helped by selling your property sooner rather than later?
Does the property have debts against it that are making it harder to hold onto each month?
Have you received any other offers from buyers that were not satisfactory? Why not?

Keep an empathetic tone as you nudge the conversation toward the problem they’re experiencing. The lead might be a business opportunity for you, but remember that it’s usually a personal crisis for the prospect.

Bring sympathy and understanding as you discuss the prospect’s financial problems, marital problems, health problems, or a death in the family. Sellers want to work with people they like, and who they feel understand them and their difficulties. Never be brusque or abrupt with prospects, no matter how busy or rushed you feel.

Implication Questions

Now that you have a firmer grip on understanding the prospect and their problem(s), you can start asking questions that lead them to their own conclusion: that you’re the solution to their problem.

Ask questions that nudge the prospect to think about what would happen if they didn’t sell to you. Here are a few examples to get you started:

What would happen if you couldn’t sell your property in the near future?
What would happen if you couldn’t sell your property in its current condition?
What other expenses would you have to take on if you couldn’t sell your property quickly and in its current condition?
How has your property’s condition affected your ability to sell it?
How would it affect your bottom line if you had to pay closing costs and real estate agent commissions in order to sell your property?
How much does it cost to hold the property each month, including not just mortgage payments but also property taxes, homeowners insurance, HOA fees, maintenance, and repairs?

Remember, the next step will be making an appointment to see the property. You want them to actually keep that appointment, rather than standing you up. These questions not only give you more information, but also lay the groundwork for them to keep your appointment and want to sell to you.

Need-Payoff Questions

As you move toward making an appointment or disqualifying the lead, keep laying that groundwork with framing questions.

These questions reinforce the prospect’s need to sell, and the payoff to selling to you specifically — while letting the prospect come up with the answers on their own.

Here are a few ideas to get you started:

What benefits do you see in selling to a cash buyer like me?
How important is it to you to receive a high price for the property, versus a more immediate settlement?
What would you do with the extra time and money if you could sell within the next two weeks, rather than having to list the property for sale with a Realtor and potentially having to make repairs?
What impact would it have on your life as a whole, if you could sell quickly and move on to the next venture?
How important is a cash sale within the next two or three weeks to you?
How important is it to you to avoid having to list your property to the public through a real estate agent?
How do you feel about holding open houses and keeping the house in pristine condition for buyers and their agents walking through the property over the next few months?

These and similar questions help frame the decision: they can potentially walk away with a higher price, but it comes at the cost of certainty, speed, and the hassles of open houses, showings, and potential repair demands.

Lead Qualification Steps

A lead came in via voicemail or email. What process do you follow to qualify and convert that lead into a closed property?

Start with a simple framework to qualify and convert the maximum percentage of leads that flow into your sales funnel.

Qualifying Begins with a Phone Call

To begin qualifying a lead — and to go through the SPIN questions outlined above — you need to get the prospect on the phone.

If after asking all of your qualifying questions you think you have a live lead, schedule an appointment for the soonest possible time. The more distant the appointment, the more likely the seller is to cancel the appointment or sign a contract with another cash buyer who swoops in to poach the deal.

If the lead doesn’t meet your qualification standards, you have two possible paths. If the prospect isn’t yet ready to sell, but the deal appears strong and the seller indicates they may be willing to sell in the foreseeable future, you can put them on a long-term drip campaign. You can set up drip campaigns on REsimpli with automatically scheduled email follow-ups, direct mail, and phone call reminders, perhaps every other month. It keeps in the mind of the prospect so they think of you first when they decide they’re ready to sell.

Or, if the lead isn’t qualified and never looks likely to change, you can mark it a dead lead and move on.

Visiting the Property

If you can meet the seller at the property on the same day, do it. Consider bringing your contractor with you for an estimated quote and a second opinion.

You can estimate the repair costs and the after-repair value (ARV) after touring the property firsthand. From there, you can calculate your maximum allowable offer.

Make an Offer

Double check your numbers with a real estate wholesale calculator to confirm your maximum allowable offer. Leave a contingency for unexpected costs, and make sure you include all closing costs and lender fees.

From there, you can decide on an initial offer price, and make your offer to the owner. If the owner tries to negotiate with you, you know how much wiggle room you have to raise your offer.

Once you sign a purchase contract, it’s simply a matter of getting to the closing table.

Final Thoughts

Qualifying real estate leads isn’t rocket science, but it does involve both art and science.

Yes, you can and should have a list of qualifying questions you can work through as needed with each lead. You should refine your approach and experiment with different combinations and sequencing of questions. Therein lies the science.

But sellers are human beings, and often distressed ones at that. You want to buy their largest asset for below market value. That requires you to approach them with empathy, understanding, kindness, and compassion. The more they like and trust you, the more likely they are to want to work with you. A humane touch goes a long way, and adds a dimension of art to buying distressed properties.

As you master your real estate qualification technique, refine both the art and science sides of your approach — and watch your conversion rate soar.