Understanding the Key Differences of Leads and Prospects

LEADS VERSUS PROSPECTS

In real estate, agents often refer to a prospect as a lead thinking that the two terms are interchangeable even though they don’t actually mean the same thing. In my experience, agents tend to call prospects “hot leads” and call actual leads “bad leads.” This mindset can lead to frustration because most agents are treating leads like they are prospects. When you do this, you quickly reach a point of frustration that results in leads being labeled as bad leads.

Here is a visual representation of leads versus prospects. Below the image, we dive a little deeper into how each is defined.

So let’s take a deeper dive to learn more about leads versus prospects, specifically what a lead is, what a prospect is, and why the difference is important to your success in real estate.

WHAT IS A LEAD?

A lead, simply put, is a consumer who has provided their contact information to you by registering on your website, subscribing to a newsletter, etc. Another example of a lead is when someone refers a customer to you or you obtain their information from a lead source. The main point of a lead is that they have connected with you, have given you their information, however, they have not indicated to you that they are ready to move forwarding with buying a property, renting a property or listing a property for sale. Leads must be cultivated in order to get them to point in which they are a prospect.

WHAT IS A PROSPECT?

A prospect is someone who started out as a lead and had now indicated to you that they are ready to move forwarding with the home buying or home selling process. They have made an appointment to meet with you one-on-one for a listing presentation or a buyer consultation or have made an appointment with your preferred lender to get pre-qualified. The main point of a prospect is that they are someone who is ready, willing, and able to buy/sell/rent property with you as their agent.

CONCLUSION

At the end of the day, real estate agents must have the right mindset when dealing with leads as well as prospects and that begins with a thorough understanding of leads versus prospects. If you’d like to learn more about how to connect and cultivate leads so you can convert them into prospects and ultimately a closing, then check out our blog on the 4 C’s to Successfully Converting Real Estate Leads blog post.

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