You can hand a call list to an assistant in ten minutes, and the legal homework behind it takes longer. The FCC defines a telephone solicitation as a call or message meant to encourage the purchase or rental of, or investment in, property, goods or services, and a call that asks a homeowner to list with you reads as one. Treat it that way, and every number on the list has to clear the rules before anyone dials.
What is Cold Calling in Real Estate?
Cold calling is phoning people who have not asked to hear from you, to start a conversation about selling or buying. Agents usually build the lists from public records and MLS history: expired listings, for-sale-by-owner signs, or homeowners in a farm area (a set of neighborhoods the agent works over time).
A call to a current client about their own transaction is not a cold call.
The work divides into two kinds. List building, scrubbing, logging and booking a follow-up are tasks an assistant can own. Talking about price, giving advice or soliciting a listing is licensed territory in some states, and state rules differ. California's Department of Real Estate, for one, says unlicensed assistants may not do anything that requires a license, so ask your state commission and your broker where the line sits before an assistant makes a single call.
Benefits of Cold Calling for Real Estate
Cold calling has real strengths and real costs. It is cheap to start, and many calls go unanswered or end in seconds.
Why Cold Calling is Effective for Real Estate Agents
A call usually gives an answer fast. An email can sit unread for a week, but a call tells you within a minute whether the person is interested, already has an agent or wants no calls at all. It also reaches people who are not searching online, and it suits lists where timing matters, such as a listing that expired last week.
Results vary a great deal by market and by list, so set your own baseline over the first few weeks and ignore any yield figure you find online.
Preparing for a Cold Call
Before you hand over any calling (expired listings, for-sale-by-owner homes, a farm area, or the like), check your state's rules on prospecting calls and compare them with your broker's policy. If possible, get the answer in writing.
Research and Scripting Tips
Preparation is mostly list work, and the order matters. Make sure the finished list carries its source and its scrub date:
- Build the list from a stated source, and take out every home that is currently listed with another agent. NAR's Code of Ethics treats telephone or personal solicitation of owners known to have exclusively listed with another REALTOR® as unethical (Standard of Practice 16-2).
- Scrub the list against the National Do Not Call Registry. It covers personal numbers, cell phones included, and a registration never expires. Federal rules say you must update your list against the registry at least every 31 days, so the assistant records the scrub date on the list.
- Remove every number on your office's own do-not-call list. Under the FCC's rules, a business that makes telemarketing calls keeps a written policy, trains its personnel and honors a stop request within a reasonable time that may not exceed 10 business days.
- Add a time-zone column. Calls to a residence may not be made before 8 a.m. or after 9 p.m. at the called party's location.
- Add the research: owner name from the public record, and the MLS history of any earlier listing, such as the last price and the days on market.
Two exceptions to the registry matter here, and they are narrow. The FTC says a business may call someone it has an established relationship with, up to 18 months after a purchase or three months after an inquiry, and may call a person who has agreed in writing to hear from it. A cold list, by definition, holds neither. State telemarketing laws can add limits of their own, so ask your broker's attorney what applies in your state.
The script is short. It names the caller and the agent, gives the reason in one sentence, asks whether now is a good time, offers one next step such as a market summary by email or a call from the agent, and ends the call politely if the answer is no. Article 12 of the Code of Ethics asks members to make sure the recipients of real estate communications are notified that they come from a real estate professional, so the first line names the agent and the brokerage.
Effective Techniques for Cold Calling
Good calls are short, plain and easy to end. The assistant sticks to the script, and anything outside it gets handed off to the agent.
Building Rapport and Handling Objections
For example, say your assistant works from a time zone twelve hours away from your market. The shift that suits the assistant may not cover the early evening, when people are more likely to be home, so agree the calling hours first and put them in writing.
Rapport on a first call comes from three habits: say who is calling in the first breath, let the person finish every sentence, and keep to the one reason for the call. Objections are short too:
- If the person already has an agent, thank them, end the call and mark the number so it is not dialed again for that listing.
- A person who is not interested gets a thank-you, and the outcome goes in the log.
- A request to stop being called is recorded that day, even though the rules allow up to 10 business days, and the number is never dialed again.
- Questions about price or terms go to the agent: say the agent will call back, and pass the number along.
Nobody on the call team negotiates, quotes a price or promises a result.
Measuring Success in Cold Calling
A few numbers tell you whether the calling is working and whether it is clean, and the assistant can keep them in one shared sheet.
Key Metrics and Tracking Progress
You should have a short weekly check-in with your assistant while the calling is underway to keep the list clean and the results honest. When you meet, focus on four things:
- Conversations: how many calls reached a person, compared with the number dialed.
- Appointments: how many conversations ended with a booked call or visit with the agent.
- Stop requests: how many people asked not to be called, and the date each was recorded.
- List age: the source and scrub date of every list in use.
Compare lists by source and by property facts such as listing status or years owned. Leave out any measure based on who lives in the home. HUD's advertising rule bars selecting media or locations for advertising that deny particular segments of the housing market information about housing opportunities because of race, color, religion, sex, disability, familial status or national origin, and a call list that skips neighborhoods for those reasons risks the same problem.
Best Practices for Cold Calling in Real Estate
The practices below keep the list legal and the calls honest.
Tips for Success and Avoiding Common Mistakes
Six mistakes are worth guarding against:
- Dialing a list that was never scrubbed, or one scrubbed more than 31 days ago.
- Calling outside 8 a.m. to 9 p.m. in the called person's time zone.
- Sending marketing texts without the person's written consent. The FCC's do-not-call rules apply to text messages to wireless numbers, and a marketing call to a cell phone made with an autodialer or a prerecorded or artificial voice needs prior express written consent, so treat a marketing text the same way.
- Ignoring a request to stop.
- Calling homes that are listed exclusively with another agent.
- Letting the assistant quote prices, give advice or promise a result.
Review a sample of the call log with your assistant each week. The log is also your proof of when each number was scrubbed and when each stop request was recorded.
Scrub your next call list against the Do Not Call Registry, add a time-zone column and your office's own do-not-call numbers, and write the five-line script before the first dial.