Strategies for Real Estate Circle Prospecting

In today’s post, we’re going to take a deeper dive into the power of neighborhood farming, but focus on the language most commonly used in our industry: circle prospecting. 

But what is circle prospecting in real estate, and is it worth investing time and effort?

Let’s start with a basic definition of circle prospecting:

The definition of Circle Prospecting is real estate cold calling targeted property owners of niche property around market activity in the attempt to create a lifelong relationship (not necessarily create an immediate transaction.)

Typically, real estate agents will use circle prospecting software to search and connect with local residents of a targeted region and inquire whether they are planning a move or know of anyone who is in the near future.

Agent circle prospecting relies on contacting neighbors of a house that has recently been sold or added to listings. The foundation of generating circle prospecting leads is that residents are curious to learn about the sale of a home in their neighborhood. After all, people in the neighborhood have a vested interest in the amount and price of home sales in their community.

Unlike working with FSBOs or Expireds, where there is likely to be more immediate urgency and motivation, circle prospecting, as the definition suggests, is about building your database of future opportunities. Or, to look at it another way, it is more of a “top-of-the-funnel” business development strategy. But one that can pay some huge dividends over time.

So, even though there is a high chance of rejection, there is a good likelihood the homeowner will stay on the phone with you. Therefore, it’s all about how you approach the call. Clearly, you are not trying to “sell” them at this point. It’s about making an initial contact, and putting your name out there for future opportunities.

There are two basic types of circle prospecting strategies:

• Just-Listed Prospecting: Serves two objectives. First, you are alerting nearby homeowners that you’re selling in their area and asking if they have any friends or family members who might be interested in moving to the area. Secondly, you can use the call to assess the homeowner’s short or long-term goals, so that you can add them to your contact list. Let’s look at how the conversation might go:
  • “I just listed a home for sale at 123 Main Street. I wanted to check to see if you might have a friend or family member interested in moving to the neighborhood.
  • If NO, you can probe: “I appreciate that. By chance, do you have any plans to move in the near future?”
  • If NO, shift the conversation with a few open-ended questions: “How long have you lived in your home?” “What attracted you to this neighborhood?” “Where did you move from?”
  • If the answer to the initial questions is YES or POSSIBLY, then you try to move the conversation forward by getting an idea of their timing and plans (“When might you be interested in selling?” “Where are you planning to move to once we sell your home?”). If the answer is six months or less, you now want to pursue an initial meeting.

• Pending or Just Sold Prospecting: Here, you are actively seeking interested sellers by touting your experience with selling homes in their neighborhood.
  • Your opening: “I just sold a property at 123 Main Street. In the process of selling, I had a number of interested buyers who really like this neighborhood. So, I’m reaching out to see if anyone in the area is interested in selling in the near future.
  • If they seem interested: “Great. I’d love to have a chance to take a quick look at your home so I can give you an initial value. Absolutely no cost or no obligation on your part. When would be a good time for me to come over?”
  • If they aren’t interested, you can end the conversation, or possibly gather some information using a few of the probing questions above.”

Again, circle prospecting is a long-term business development strategy (although, it would be great to find someone interested in selling today!). The key to successful circle prospecting is asking solid, open-ended questions to get as much background as possible. If the homeowner is absolutely not interested in selling, you know you can move on. But if there is some level of interest, you know that person is someone worth nurturing for future opportunities.

Here is LINK to our recent post on Neighborhood Farming, which will provide you with details on the new Espresso Agent Real Estate Farming Software.