Real Estate Cold Calling: A Practical Guide For Agents

Chris Heller HeadshotChris Heller,March 21, 2022

A,Young,Beautiful,Receptionist,And,Personal,Assistant,Is,Very,Serious.It’s no secret in the world of sales that nobody likes cold calls. Real estate agents don’t like making them and, a lot of the time, clients don’t like receiving them. So, why is this sales method that no one likes, still in use in so many sales departments today?

The answer is simple. Even if 99% of your calls are rejected, the value of the 1% that accepts outweighs the cost. This is especially true in high-commission sales roles like real estate. Cold calling won’t be your only method but it can be a valuable part of an omnichannel approach.

Why Cold Call?

You could say that the reason you should cold call is that most people don’t like doing it. When there’s a reluctance to pursue a lead from your competitors, there’s an opportunity for anyone who can overcome that reluctance. 

Man,Doing,A,Phone,CallLead Generation

Cold calling can be a valuable way of generating warm leads. The biggest barrier to any sale is not having a customer to sell to. Once you’ve made the initial contact, you can simply let your existing skills in sales do the rest of the work.  

Relationship Building

Have you ever heard the expression ‘A stranger is just a friend you haven’t met?’ Well, in sales, a stranger is just a customer you haven’t met. When it comes to real estate sales, many accounts are closed only after repeated contact.  

The first step in closing these deals is often cold-calling the prospect. For larger accounts, you might even pre-arrange the cold call with an appointment, an email, or even a gift basket. More on this later.  

Conversions

A 1% success rate is low, even for cold-calling. A well-targeted list should give a competent sales agent success rates up to 2%. However, using this low success rate estimate, we can still show the value of cold calling to conversions.

Using contact center AI, it’s relatively easy to make 100 calls an hour. If 1 of these calls is successful (1%) and your commission on the sale is $10,000, then there’s an earnings potential of $10,000 an hour right there.  

When you look at it in terms of pure numbers like this, you can see that cold calling is worth your time. Even at low success rates.  

Who to CallAsian,Salesman,In,Office,Making,Business,Phone,Call,Sitting,At

You can’t just start dialing numbers out of a phone book and expect to be successful. You’ll need to curate targeted lists of realistic prospects if you want your cold calling to pay off. There are some areas that will lead to much more viable business prospects, let’s take a look.  

Expired Listings

This one is just common sense. If a listing has expired without a sale, the prospect still has a property to sell. On top of that, they may well be dissatisfied with their current agent. This is a great opportunity to call and offer your services as an alternative.  

FSBOs

‘For Sale By Owner’ (FSBO) properties are another potential avenue. You might face reluctance from these prospects. After all, they made the decision to sell without agents already. Statistically speaking, though, most sellers who attempt a private sale will be unsuccessful. 

Consider prospects who’ve had their property on the market for some time. It might be the perfect opportunity to convince them your services can help. 

Serious,Businesswoman,Talking,By,Phone,,Work,At,Laptop.,Office,SecretaryFRBOs

The same can be said for property owners who’ve had their property on the rental market for some time. If they’re struggling to find tenants, then you might have some success convincing them that selling is a better financial option. 

Targeted Area Calling

If you’ve worked in real estate for a while, you may have noticed a domino effect often occurs when someone sells a property. Whether it’s the power of suggestion or just finding out what their property could be worth, others in a local area often follow suit and sell. 

This can make cold calling in an area with recent sales a viable marketing tactic. This is especially useful if you know the property details and sale price of recently moved properties. This kind of information can sway the decision of a prospect who is on the fence. 

Big Fish & How to Land Them

In real estate, a big fish is an account that is going to provide repeated high-value business. Think property developers, house flippers, foreclosure lawyers, etc. They’re not easy to convert. They will almost always have a representative for sales already.

It can be difficult to even get a meeting with these kinds of accounts, they’ll often ignore sales calls from unknown agents. This means two things. First, you’ll need to research these accounts. Find out who makes decisions in the company and what their values are. 

Secondly, it means you’ll need to get creative with your approach. Cold calling alone may not be enough. Draw on your knowledge of client relationship building and viral marketing techniques. Start with politeness and subtlety and ramp up from there. Persistence will often be a necessity. 

Make sure the rest of your business stands out from your competitors, too. A savvy client will probably research your company before even accepting a call. Website personalization can be a great way of making your business stand out from the crowd. 

When to CallClose,Up,Of,Women's,Hands,Holding,Cell,Telephone,With,Blank

When you’re cold calling, the timing of the call can make all the difference. You need to time your call blocks (the time you set aside for calls) in order to maximize responses. According to the latest research, the best time of day to call on a weekday is between 4 and 5 pm.

Some sales experts have suggested this is because people are more receptive to calls when they’ve finished off their tasks for the day. The second-best times are between 11-12pm. The best days of the week to call were shown to be Wednesday and Thursday. 

You’ll also have some success with Monday cold calls. Monday is a busy day for a lot of business clients but it’s also when people are most receptive to taking on new projects. There are other factors to consider, too, based on who you are calling.

Is your target in the same time zone as you? You’d think this would be a no-brainer with property but actually many landlords and property consortiums are based overseas. 

Consider when budget planning will be taking place with business clients. Usually towards the end of the financial year. This will be the best time for cold calls, your clients will be more receptive to new ideas with fewer ongoing projects to worry about. 

How to Prepare

Woman,Using,Her,Mobile,Phone,In,The,Street,,Night,LightCold calling isn’t easy. Many sales leaders will tell you that there’s a strong reluctance from many sales agents to make cold calls. This is due to the psychological hit of frequent rejection that comes with high-volume cold calls.

There are ways you can motivate yourself or your agents to help overcome this though. Practical steps like keeping a database of small business phone numbers can help. You should also consider your employees’ mindset.

Motivation

Keeping motivation high can help you push through the rejections to that one call that makes it all worthwhile. Keeping the value of a call like this in mind can help. Statistics show that average success rates for cold calls are around 2%.

We’re judging success here as calls that lead to a client appointment. So if you make 200 calls over 2 hours, get 2 appointments and convert just one of those deals, then your hourly rate can be thought of as your commission on the deal divided by 2. 

Since the average realtor’s commission is around 2.27-3.29%, (Or around $7,000 to $10,000 on a $300,000 home) this makes for an impressive hourly rate! Of course, it’s not that simple but keeping these figures in mind can help an agent push through the objections. 

Environment

Keeping an environment that is free from distractions can help you focus your mind and maintain your composure. This can help when you’re making call after call in rapid succession. Being able to clear your mind and move on to the next call feeling fresh is what you should aim for.  

Keeping up positive reinforcement in your work environment can help your agents’ motivation too. You know that one success can make the hundreds of failures it takes to get there worth it. So show your employees that. 

PracticeTop,View,Hands,Circle,Using,Phone,In,Cafe,-,Multiracial

If you have new real estate agents, or even agents moving from warm lead sales, cold calling can be daunting. Practicing techniques, scripts and objections in advance can give your agents an edge. When they move on to live calls, they’ll know what to expect. 

You can practice these calls anywhere, whether you’re in the office or working with a remote, virtual team.

Final Thoughts

One thing you shouldn’t forget is that the best advert for your business is a satisfied customer. Using referral programs can help you gain warm leads through word of mouth. This means you can get two wins off a single cold call conversion if you get a referral from them too. 

Offering accessibility options like voice transcription software or text to speech phone systems is always best practice. This can help you make conversions that your competitors leave on the table.  

Be prepared to think outside the box to differentiate your business. Identify opportunities your competitors may overlook and you’ll gain an important competitive edge. 

Chris Heller Headshot

About the Author

Chris Heller brings 27 years of experience in real estate. Chris serves on the AgentAdvice Editorial Board and is the Chief Real Estate Officer at OJO Labs. Chris brings deep expertise having held influential industry positions including CEO of mellohome and former CEO of Keller Williams Realty International.

Last Updated: 5/20/2022

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