In its simplest form, real estate circle prospecting involves calling people within a particular geographic area and asking them whether they are thinking of moving, or whether they know someone who is thinking of moving.
In other words, you’re calling people up and asking them for business.
The way it usually works in real estate, is for agents to call homeowners who live nearby your recently listed or closed home. Circle prospecting in real estate is built on the idea that homeowners in a given area would be interested in hearing about a home near them that has recently sold. As a part of the surrounding community, nearby owners have a direct interest in houses selling around them, how much they are selling for, etc.
In this article, we’ll cover the basics of how to do successful circle prospecting:
The thing many agents get wrong about circle prospecting, is that your objective is not necessarily to create an immediate transaction.
Your goal is to develop a long term relationship so that when it comes time for them to sell their home, people in that area think of you first. Of course, you always want to go ahead and ask for their business first, but your job isn’t done if they say they’re not ready to buy or sell in the near future. But more on that point later.
The way circle prospecting is often understood or visualized in real estate is similar to growing crops on a farm. By calling homeowners in a given area, you are “planting the seeds” of future business.
You’re accomplishing several things through real estate circle prospecting.
By calling up surrounding homeowners and letting them know you just listed or sold a home in their area, they know you are capable of doing your job.
Taken together, the above benefits of circle prospecting help you win new business — whether that’s right now or in the future.
Cold calling in real estate or any other industry is never easy.
However, calling FSBOs (for sale by owners) and expired listings make the task feel almost impossible. That’s because there’s a large number of other agents and ISAs all calling the lead at about the same time. As soon as that listing expires or they put their house up as FSBO, every agent starts circling.
You might be the best agent for the job, but it’s hard to get anyone’s business if you’re the 20th caller saying you can help them sell their home.
Circle prospecting, on the other hand, is calling people whose homes most likely aren’t listed and haven’t been recently listed.
You still have the challenges of cold calling, but there tends to be a lot less competition involved from other agents. These homeowners aren’t getting hammered from every direction by real estate professionals, so they might actually be happy to talk to you.
That is, if you come with the right approach.
Whenever it comes to cold calling, it’s easy to get overwhelmed. But remember, at its core, circle prospecting is just letting people know you buy and sell homes in their area.
Technically, putting up signs in current clients’ yards and stuffing flyers into mailboxes would qualify as circle prospecting. But more often than not, when people say “circle prospecting”, they are referring to actively cold calling the surrounding homeowners.
Hopefully, with a highly-intentional and well thought-out strategy and script.
Before you get started, there are a few core components that go into a successful circle prospecting strategy:
Let’s take a closer look at each one to help you get off on the right foot.
Step one is probably the simplest part of the process.
In 2021, there are many companies that will provide you with phone numbers of people in a given geographic area. But that doesn’t those people are ready to convert.
The important thing to remember here though is to always check “Do Not Call” lists. If people have taken the time to put their numbers on a list, then they’re not going to be happy to hear from you. It’ll most likely be a complete waste of your time, and could even damage your reputation in the long term.
Having the Right Mindset
Having the right mindset is crucial for any type of cold calling.
Really, it’s critical for any type of sales. That’s why I like to hammer this home to agents in the Conversion University training program. The only way you’re going to be able to keep up the motivation for calling number after number, is if you are telling yourself a good story in your head about why you’re doing it.
Here are a couple key things to keep in mind as you work your way through your next circle prospecting campaign:
Using the Most Effective Script
Here’s where I might deviate from other agents and teams.
I think the key idea with scripts is to use them for support, but not to rely on them completely. One of the worst things you can do is sound like a robot and seem unable to spontaneously answer questions or respond naturally.
The most critical thing to do is have a real conversation. Here’s how to make that happen:
Let the conversation flow, match their intensity and speaking speed, and just be friendly and find out about their current situation. Keep it simple. Even if they’re not interested in selling in the near future, ask them if you can send them emails once in a while about real estate conditions and homes being bought and sold in their area. Get them in your funnel.
Following up is key to successful circle prospecting and building your sphere.
One of the primary purposes of circle prospecting is developing future business. That means nurturing leads who may not want to sell now, but will want to buy or sell in the future.
Keep sending them valuable information (everyone likes hearing about what homes in their area go for), keep them updated on market conditions, especially if it becomes more advantageous for them to sell, and just generally be their #1 real estate resource.
Using a platform like Follow Up Boss can be a huge asset when it comes to keeping your brand in front of potential future business. You can set up an automated circle prospecting follow up sequence that is triggered when someone tells you they’re just starting their search and not planning to act until some point in the future.
All you have to do is head to the Automations tab and pick the type that you want to create. You can have separate sequences for both buyers and sellers that keep you top of mind and nurture them into clients.
I would also recommend calling those leads every six months or so to check in with them. Ask them how they’re doing, see how they are liking their current home, and tell them that if they are thinking about selling, you are ready for them. Following up via email and phone will help keep you top of mind so that when they’re ready to make a move, you’re the first person they think of.
No matter what your lead gen strategy, circle prospecting is an excellent way to develop and build new business. And in today’s real estate market, it pays every tool at your disposal. Follow the above tips and with the right information, scripts and attitude, you’ll be able to make circle prospecting worth your time.
About the Author
Dale Archdekin is the founder of Smart Inside Sales, a coaching and training company serving residential real estate agents and brokers. If you’re struggling to convert your leads, then Smart Inside Sales has a training program that can help. It’s called Conversion University and Follow Up Boss members receive free access to the course, as well as a discount on live training with a real estate sales coach.