There seems to be a feeling of security in having a lead. It feels a lot more secure than being told no. We feel warm and good about ourselves and our situation if we have leads. The problem is that leads don’t put braces on kids’ teeth, put food on the table, or make the house payment, let alone allow that exotic trip to a secluded South Pacific island. When we truly evaluate leads, they prove to have little value in actual dollars.

What are your leads worth in cash?

What are the leads you currently have worth? What are the leads you have in your database, the ones you mail to constantly, worth? What would someone pay you for those leads - in cash, today?

The truth is most leads are worth very little. The reason is that they have rarely been qualified, they've been picked over, and the ones that are not worth saving have yet to be given their unconditional release. Often we handle and hang on to our leads as we would our grandmother’s china. But leads should be put under fire to see how strong they are. When you put something under fire, you find out the true test of its metal. If you were to heat gold up to a very high temperature, you would see the impurity in it. You could then decide to remove the impurity, or throw the whole thing out and start over. Leads need to be handled the same way.

If you don’t put your leads under the fire of scrutiny, you will never know their value. The quality of your business is not in the number of leads you have but the quality of your leads.

I would rather have two strong, qualified leads who want to buy or sell in the next week than twenty-five leads whom I have not qualified. The two are worth money; they will allow me to get paid now. The twenty-five are worth nothing. The two are mine; they are working with me. The twenty-five are probably in twenty other agents’ databases as well. What client will generate enough income for twenty agents?

How to qualify leads

It's a lot easier to clean out your database of leads if you know how to qualify a lead.

Step one: You must first define what an "A" lead is to you. My definition was someone who was going to buy or sell in the next seven days. Your time frame could be longer. As you are able to generate more leads your time frame will begin to shrink. Once you have defined your leads you must establish a follow-up system for these leads. My system was to call them every other day and send one to two mail pieces per week till they listed, bought, or decided not to buy or sell.

You also need to define a "B" lead. My definition was someone who was going to buy or sell in the next 30 days or less. If someone were more than 30 days from making a decision, I find it is more effort to try to work with them than it is worth. For my staff and myself, it costs too much money in time to follow-up with someone who isn't sure of future plans.

Step two: Develop a series of questions that will enable you to determine if the prospect is an A-lead, B-lead, or no lead at all. Some examples would be:

• How long have you been looking for homes?
• Where are you hoping to move to?
• What has caused you to consider moving at this time?
• How soon are you hoping to be in your new home?
• Are you looking to get the home you are currently living in sold?
• When are you planning on putting your home on the market?

These questions may cause your prospect to become a little uncomfortable. But you have to keep your investment in mind, too. You are investing your time with the hope of getting paid. Time is your most valuable asset. Don’t give it away to unqualified people.

It takes courage to ask the questions that will ferret out those leads who lead nowhere. It takes courage to walk away from someone who may buy a home in the next millennium, while you look for someone who will buy or sell now. But for the sake of your finances, your self-respect and your family, you must have the courage to qualify your leads daily.

Remember, no one ever stole second base while having one foot still on first.

Published: November 15, 2000

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Dirk Zeller is a sought out speaker, celebrated author and CEO of Real Estate Champions. His company trains more than 350,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters. The Real Estate community has embraced and praised his six best-selling books; Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, The Champion Real Estate Team, Telephone Sales for Dummies®, Successful Time Management for Dummies®, and over 300 articles in print. To learn more regarding this article, please visit www.realestatechampions.com.