As a young CRE broker, I listed a ton of property and put much of it under contract in a very short period of time. Early on, I must have looked like a superstar. The problem was that most of it did not make it to the closing table. I later learned that the reason was that I did not understand what a qualified prospect was. To me, a qualified seller was someone who owned some property and wouldn’t mind if I sold it, and a qualified buyer was someone who could fog a mirror and sign his name.
When I learned how to qualify my clients and prospects, almost ALL of my contracts resulted in a commission. In the unlikely event that a deal did not close, it was painfully obvious on which level I failed to qualify the party at fault. I could then learn from my mistake and move on to a successful deal. Learning to qualify your prospects and clients can make the difference between succeeding or failing as a salesperson. I have to credit the CCIM education for teaching me these principles. I use the acronym NUCLEAR to help me remember to qualify prospects, and as a guide to make sure I qualify on every level. NUCLEAR is a great acronym for qualifying clients and prospects because it denotes tremendous power.
N – Need
Your ideal qualified prospect or client must have a need that you can fill. Great salespeople are experts at identifying problems or areas that can be improved, sometimes even before the prospect is aware of the problem. This is sometimes referred to as “creating a need” although in actuality it is discovering a need and making the client or prospect aware of it. This is primarily accomplished through asking the right questions.
U – Urgency
Your ideal qualified prospect or client will have a need that must be met sooner rather than later. A deadline as in the case of a 1031 Tax Deferred Exchange or lease expiration creates the most urgency. Perhaps there is a cost associated with potential inaction. The broker should make the client acutely aware of the cost of inaction. We have all seen the commercials on late night TV where the salesperson attempts to create urgency to buy their product NOW with a special offer that is “TODAY ONLY” or “THE NEXT 10 CALLERS”. They do this because it works where no urgency exists. Great salespeople are masters of creating urgency through the art of questioning.
C – Catalyst or Cause
What is it that is driving the need and the urgency? The salesperson must understand what is driving the real estate decision. What is causing the need? Is it the preservation of wealth? Avoiding capital gains tax in the case of a 1031? Is it to create wealth? Perhaps the prospect is just running out of room or has too much space. Whatever the reason, there must something that causes the need. There must be some motivating factor. There is nothing more frustrating than working with an unmotivated seller, buyer, landlord or tenant. The best salespeople supply the spark that lights the fuse.
L – Loyalty
Loyalty is what guarantees you a paycheck after you complete the assignment. Your ideal prospect will be loyal. This is primarily evidenced or demonstrated by the Exclusive Listing. In some rare cases loyalty has been established by a proven track record over time, however, even the best of relationships can, and often do, end. The best way to remain friends in business is to have a good contract that so that everyone understands what their responsibility is and what they can expect from the other parties. At the Massimo Group, we strongly urge our clients to only work on exclusives whether they represent the buyer or the seller. The benefits of exclusive representation to a buyer or a seller are too numerous to go into here, however, great brokers understand that you simply cannot serve the client with your best effort without an exclusive.
E – Expectations
The ideal client or prospect will have achievable expectations. The salesperson should set those expectations early. Great salespeople set the expectations of the client a little lower than is achievable, then go out and exceed them. This is called under-promising and over-delivering. The opposite is devastating to your reputation and career. If the client expects to rent prime space for $20 p.s.f. and the market is at $30, you are wasting your time and theirs. Effective salespeople educate the client to set realistic expectations. I once wasted some serious time and attorney fees because the selling broker did not qualify his buyer’s expectations regarding cash on cash return on a STNL deal. A simple question and mathematical calculation would have saved a lot of people a lot of time and a lot of money.
A – Authority
It goes without saying that you must be speaking with the decision maker(s).
R – Resources
Show me the money. Great salespeople know how much money is required to close the deal or relocate the company and they know where that money is coming from. They also understand that resources required to complete the transaction are not limited to financial resources.