Qualifying prospects

How to Qualify Prospects in Commercial Real Estate

Are you wasting time talking to the wrong prospects?

If you aren’t properly qualifying them, chances are, the answer is yes.

As The Massimo Group, a commercial real estate consulting and coaching organization, put it, “You believe your goal is to secure as many meetings as you can, in the hopes of converting these prospects into clients. I would suggest this is not your goal. Your goal should be to secure as many meetings with qualified prospects as you can.”

So, how exactly should you qualify prospects?

Below, we outline tips and best practices to help you ensure every prospect you communicate with has a realistic chance of doing business with you.

Identify the attributes of a qualified prospect

Before you can qualify a prospect, you have to define what attributes a qualified prospect possesses.

Ralph Spencer, CCIM, Principal of Innovative Learning, recommends looking for the following attributes:

  • Needs commercial real estate services.
  • Knows he needs commercial real estate services.
  • Has the authority to act on his need.
  • Has the budget to back up his authority.
  • Feels a sense of urgency to act.
  • Knows your company and has had a positive experience in the past.
  • Knows you and likes and trusts you.
  • Is willing to follow your guidance.

Your prospect doesn’t have to meet every requirement to warrant a conversation, but the more requirements they meet, the more likely you are to have a productive conversation.

Ask qualifying questions

Once you know what attributes a qualified prospect possesses, you can begin asking new prospects questions that help you determine how likely they are to do business with you.

Commercial Real Estate Online recommends asking these 11 qualifying questions to determine which prospects you should continue engaging:

  1. Who are they? Name, email, telephone, and cell phone will be required.
  2. What are they looking for in property today and why?
  3. How can you contact them in the future? Get their agreement to that contact process.
  4. What have they seen by way of property or something else that has made them call or see you?
  5. What do they know about the local area? Do they know the prices, rents, areas, or trends?
  6. Have they looked at properties with other agents? If so, get the detail of where and when.
  7. What are the critical facts of property selection or listing that they must have satisfied? What facts are driving those issues?
  8. Do they have a budget for a property choice and selection? Check those details so you know that they are realistic in their intentions and choices.
  9. When must they have this property need satisfied? Is there a timeline that should be worked to?
  10. Do they have finance approved to help facilitate a decision or choice? (For property buyers).
  11. What do they know of the property type and will you need to help them with information specific to the situation?

The answers to these questions will help you determine how knowledgeable your prospect is, how close they are to moving forward, and whether they are the type of client you want to work with.

Use a proven framework

Qualifying prospects is a process that’s been honed and refined by salespeople across various industries over the years.

And luckily, many have shared their most successful methods.

Here are two qualification frameworks that have been proven to help identify which prospects are most likely to do business with you.

1. BANT

The BANT framework qualifies prospects based on four key characteristics:

  1. Budget — Does the prospect have the funds necessary to do business with you?
  2. Authority — Can they make the decision on whether to move forward?
  3. Need — Do they need your services?
  4. Timeline — Are they planning to address their issue in a certain timeframe?

IBM — the organization that developed the framework — recommends considering the prospect qualified if they meet three of the four criteria listed above.

2. CHAMP

CHAMP is an alternative to BANT that qualifies prospects based on the following characteristics:

  • CHallenges — Are they facing a challenge you can help them solve?
  • Authority — Can they make the decision on whether to move forward?
  • Money — Do they have the funds necessary to do business with you?
  • Prioritization — How important is solving this challenge compared to other priorities?

While this framework is similar to BANT, the implication is that the challenge a prospect is facing is the first thing you should focus on, rather than budget.