By Dirk Zeller
Based on your qualifying efforts, determine the likelihood that your prospect will convert into a good client for your business by conducting a “DNA” analysis. This involves measuring the prospect’s level of desire, need to take action, and ability and authority to make a purchase or selling decision.
D for desire
Desire or motivation is the strongest indicator of a successful business outcome. A prospect’s burning desire can overcome all other deficiencies, including a lack of financial capacity or purchase ability.
The summer before my junior year of college, I painted houses to earn money for my tuition, books, and room and board. When I started work on the last house of the summer, I learned that the owner was selling a 1976 BMW 2002. I wanted that car, even though buying it would take all my summer earnings and college savings. My parents tried to counsel me away from this foolish idea. My ability to buy was limited due to money, but my desire was greater than my lack of ability. I ended up borrowing the money for the car and still covered my college costs. This creative ingenuity didn’t please my parents at all. Looking back, it wasn’t one of the smarter decisions I have made in the last 25 years. But, it did teach me a lesson about the power of desire or motivation to compensate for all other shortcomings.
Let me give you one caution: Desire is not the same as interest. Anyone can have interest. Interest doesn’t reflect intent, and it doesn’t indicate a high probability of action. If a prospect says, “I have an interest in selling,” probe deeper to see if there is real desire to sell, or just interest.
I have found that many “interested” shoppers are looking for something that doesn’t exist. Truly, I’ve heard interested prospects say, basically, “If you can get me $50,000 above market value for my house, and you can find one I can buy at $75,000 below market value, I’ll list my home with you.”
Get real! The truth is, if I could find a property for $75,000 below market, I wouldn’t sell it to him; I’d buy it myself, and so should you.
N for need
A need is a specific and identifiable problem that your service can help a prospect overcome. Many prospects’ needs stem from lifestyle changes that prompt environment changes. A family expecting another child needs a larger home. Empty nesters tired of yard work and home upkeep want to move to a maintenance-free condo. A divorce requires one household to become two households, forcing a home sale and several purchases in the aftermath. The need to buy or sell based on environmental changes such as these prompts the majority of real estate transactions each year.
One of the reasons I worked expired listings was because the owners’ levels of need were so apparent. After sitting with an unsold home for months or longer, the sellers’ need to find an agent who could solve the problems were pretty clear. My job was merely to convince them that, by working with me, their problems would be solved; that I would deliver a different and positive outcome.
A for ability and authority
Clients need both ability and authority to conduct a real estate transaction. Ability relates to the financial capacity of your prospects. Do they have the financial wherewithal to sell their current homes and buy the homes of their dreams? Do they have enough equity in their current homes? If not, can they borrow a larger sum to buy the homes they want, or do they have access to additional funds to achieve their goals?
Authority means the prospect has the power to make the decision, to say “yes” or “no” to the deal. Find out: Are you working with the ultimate decision-maker or decision-makers, or is someone else also involved? Will the prospects decide autonomously, or will they seek the guidance or advice of others as they make their decisions?
I think agents make a huge mistake when they make listing presentations without both spouses or significant others in attendance. Whether or not both names are on the title matters little. In our family, we own properties that show only my wife’s name on the title, and others that show only mine. This is purely an estate-planning move on our part. If we decided to sell, I guarantee that our input would be equal in decisions about pricing and who should represent our interest in the sale.
By using this DNA analysis of measuring one’s level of desire, needs, and ability and authority, you will have an accurate basis for determining the probability of your prospect converting to a good client for your business.
Dirk Zeller is an agent, investor, and president and CEO of Real Estate Champions. For more information, visit Realestatechampions.com.