According to one recent study, approximately 88% of people who recently purchased a home did so with the help of a real estate agent or broker. Yes, it’s true that people are going online and researching potential properties in their area in significant numbers. But when the time comes to actually execute that transaction – one of the biggest they’re likely to make in their lives – they’re turning to professionals like you in order to make sure the process goes as smoothly as possible.
Yet at the same time, actually connecting with these prospects is often a lot easier said than done. In 2007, it was estimated that it would take about 3.68 cold calling attempts to find a single prospect. Flash forward to today, and that number has increased to nine cold call attempts.
That, in essence, is why techniques like circle prospecting in real estate are ultimately so important. Circle prospecting is built on the simple idea that if a neighborhood home recently sells in someone’s area, many of the people who live there will want to know about it. What I’ve found is that by sending out marketing collateral with location-specific updates like this, you’re doing more than just going after a single transaction – you’re building relationships with as many people as possible.
So even if they’re not ready to sell their home or make a purchase today, when that day comes in the future, you’ve dramatically increased the chances that the first number they call is yours. It gives you a chance to make a connection with as many people in an area as possible, all while establishing yourself as an authority at the same time.
While it may sound straightforward, I’ve found a good circle prospecting strategy requires you to keep a few key things in mind to help make sure you’re leveraging the full power of this technique to your advantage.
What is Circle Prospecting? An Overview
As stated, the ultimate goal of circle prospecting isn’t necessarily to generate individual transactions – although you could always get lucky to that end. Instead, what you’re trying to do is strategically grow your database in a particular area and generate appointments that may likely turn into sales opportunities down the road.
Circle prospecting lead generation can come in multiple forms including phone calls, postcards, hosting an open house in the area, and social media advertising. For this article, I’ll focus mostly on the calling aspect but what I’ve found is that circle prospecting is most effective when you use multiple mediums simultaneously.
What I like about circle prospecting is that it cuts down on a lot of the competition you’re likely to face almost immediately. Many real estate prospecting techniques are reactionary – meaning that you’re waiting for something to happen before you can make a move. It’s rare that you will ever be the only agent to call an expired listing to see if you can help someone sell their home, for example. Homes that are for sale by owner (FSBO) have likely attracted the attention of a lot of other agents in your area, too.
But with circle prospecting, you’re building relationships with people who may not be ready to sell their home today – but for whom that can easily change in the future. They may not have even been thinking about selling their home at all until they see what some of the other properties in their area are going for. A homeowner may not be interested in selling their home for six months or even a year, but in a single move, you’ve started them down that path and have gotten there before anyone else, too.
Best Practices to Leverage Circle Prospecting to Your Advantage
Indeed, the biggest key to success in terms of circle prospecting involves coming to an understanding that you’re playing the long game.
Because of that, when I call someone to tell them about a property that just sold, I try to free myself from the mindset that I’m trying to get their business. Instead, I focus on being helpful and providing them with valuable information about what is going on in their area.
During this call, you’ll want to take the time to collect as much information about the prospect as they’re willing to provide – but again, you need to do so in a friendly and helpful way. Rather than follow a strict circle prospecting script, I like to have a few questions ready that direct the call. I’ve found having an outline of where you want the call to go, rather than trying to memorize and follow a generic real estate script, will increase the chance of the lead opening up more.
Try to collect information like:
- Whether or not they know someone who plans on moving into the neighborhood.
- How long they’ve lived in their current homes.
- Whether or not they plan on moving.
- Where they would move if they did end up selling their home at some point in the next year.
At that point, prospects who have absolutely no intention of moving will reveal themselves immediately. You can finish your conversation about the recent sale and move onto the next number.
But you’ll also have a better idea of who may be ready to sell but who hasn’t officially begun the process yet – at which point you can begin to further warm them up in a gentle way. You could create anticipation by telling them about the condition of the market or other recently sold properties. You can give them an indication that this process usually takes longer than people think – it can take many months to prepare a home, get the listing properly marketed, then find a buyer even in a “hot” area.
The beauty of circle prospecting is that it allows you to remain friendly, helpful, and informative in a way that builds trust and establishes you as an authority. I never want the prospect to feel like I’m trying to sell anything, at least not right away. You’re being helpful and providing something of legitimate value – information – without asking for anything in return.
The Fortune Is In The Follow Up
It’s also crucial to understand that when it comes to circle prospecting, in particular, the follow-up process is perhaps even more important than that initial call. If you have a nice conversation with someone and they tell you they’re not looking to sell their home for six months, it is imperative that you remember to reach out to them again and touch base once that amount of time has passed.
This is something that a lot of real estate agents miss because they’re too focused on finding the hottest leads they can today. Success in terms of circle prospecting is all about your ability to play the long game. It will allow you to build up a significant database of contacts in a relatively short amount of time, but not all of them will be at the same stage of the funnel. Therefore, you need to be willing to follow up as often as possible to continue to move them closer towards the point where they are ready to begin this process in earnest. Usually, you’ll want to check in on at least a quarterly basis to inquire as to whether their status has changed.
In addition to calling your leads, consider using a real estate prospecting letter to follow up with your circle. When potential clients see your branding and name across multiple mediums, including direct mail, all of your efforts become more effective. Rather than actually write out an individual prospecting letter for my geographic farm, I create a postcard via Canva and send them out via USPS Every Day Direct Mail (EDDM). I’ve found this to be the most cost-effective method to mail many pieces of mail.
Another technique to run Facebook ads around your geographic farm. So long as you have a Facebook business page, you can run relatively inexpensive ads to a specific area (minimum 15-mile radius). When you combine calling, direct mail, and Facebook ads to your target area, a property owner in the area will begin to see you as the expert for that neighborhood or location. The riches are in the niches! Rather than doing what most real estate agents do and market all over without a defined area, be specific with your targeting. Your money and time will go further!
The Right Tools
Finally, you’ll want to make sure that you’re using the right tech-driven tools to help make circle prospecting and similar techniques easier – with REDX Geo Leads being chief among them.
A platform like REDX Geo Farming Leads is designed to bring real estate professionals and a potential seller together, taking a time-consuming process and turning it into something that is as efficient as humanly possible. REDX offers tools that connect agents with homeowners that are actively looking to sell, thus cutting down on one of the most frustrating parts of the process for many professionals.
But more than that, I like REDX because it also acts as a hub for my entire circle prospecting campaign. It helps me to organize my leads, my past clients, and more – all in one location. I save a tremendous amount of time by using it to prioritize who I call and why. I never have to worry about remembering to follow up with people because the system will help with all this and more.
With REDX Geo Leads, you can perform a neighborhood search and pull the contact information for the owners in the area. This even includes absentee owners (owners that may not live at the property and may be renting it out).
REDX also pulls in MLS data so that when you’re calling potential sellers you have market data at your fingertips. You can also set notes and automated reminders for yourself so you always know who to follow up with, thus making sure you’re not missing a single opportunity to move someone from one end of the sales funnel to the other.
One other popular circle prospecting tool is Cole Realty Resource. While their lead data is accurate, I’ve found the dialer, CRM, and overall feel of REDX to be more user-friendly and intuitive.
Start Using Circle Prospecting to Your Advantage
In the end, circle prospecting is so effective because it allows you to build legitimate rapport with a potential client in a way that also strengthens your personal brand. Circle prospecting is also a great way to build your real estate business because it is seller-focused. In the current market, listings mean lasting. Scaling your business is much easier and profitable with listings.
At that point, you become something more than just another Realtor in their area. You become a trusty advisor – a friendly voice on the other end of the phone that they know they can call with a question. Someone who they may recognize at the grocery store or out in public. A person who is always at the front of their minds when they start thinking of real estate because you’ve made every effort to make sure you stay there.
If they know a potential buyer or seller in the area, you’ll likely be the one they call. If they themselves decide to move, the chances are high that it’s you they’ll turn to. Sooner or later, your reputation will begin to precede itself in this specific, niche area you’ve chosen – which is exactly the position that any real estate agent should always be in.
Additional Resources To Check Out
For more seller lead generation strategies check out my post on how to properly work FSBO’s.
Or if you want to target expired listings, checkout my expired listing script post here.
Also, if you’re thinking about signing up for REDX, consider reading my complete REDX review here.
Would You Like To Partner With Me?
Check out my Partner Page for details on the benefits of working with me at eXp Realty. I’ve helped hundreds of real estate agents, team leaders, & brokers all over the country, increase their business & build additional revenue streams. Together, we can make this year your best yet!