Is it Cold or Hot? How to Classify Real Estate Leads

Why a CRM is important for a real estate business and how to choose the right CRM system ?Let’s talk about it.


Real Estate leads are the lifeblood of the business. Without them, there are no clients and no sales. Lead classification is the process of grouping leads together based on common characteristics. Doing so can help you prioritize your time and resources, target your marketing efforts, and increase your chances of converting your leads into clients. That’s why it’s so important to classify real estate leads effectively. 

Leads are often labeled “hot,” “warm,” or “cold,” where hot leads are ready to buy or sell now, warm are still considering their options, and cold leads are not yet ready to take action. However, there are many ways to winnow large numbers of real estate leads before determining their temperature. Performing one, or more, of these sorts can then make it easier to group leads by readiness. Here are some of the most common methods.

Common Methods to Classify Real Estate Leads

By Freshness

Fresh leads are less likely to have been contacted by anyone who can help them and might be strongly seeking someone who will. Roughly 60% of buyers and 80% of sellers work with the first agent they have contact with, so attacking fresh leads first is often a priority for agents. Ask a lead early whether or not they have spoken with another agent. They may become a terrific client if they aren’t happy with their current agent or their current agreement is about to expire. It is essential to understand any existing relationship to determine what your next steps will be.

By Intent 

Why a lead is thinking of buying or selling, and at what stage the lead is in, can be a valuable way to help determine their likelihood of conversion. Those who have specific reasons for moving, like a growing family, or who are ready to buy or sell soon are more motivated to find an agent that suits them. Those who have just begun to consider a transaction may be best to contact quickly for an introduction and save for more focus after some time has passed. Ask a lead why they are considering buying or selling, and when they’d like the sale to happen.

By Budget

The amount of money that a deal is worth may make some leads more attractive than others, and more worthy of your time. People who can spend more, or have more valuable properties to sell, may represent bigger deals. However, those representing smaller budgets may have been contacted by fewer agents and may be easier to work with, allowing more volume. By first classifying their budget you’ll know which is which and how to pursue them. An easy way to determine this is to ask what type of property they are considering.

By Location

Attacking leads by city, state, or zip code can put you in touch with those seeking to buy or sell in an area you specialize in, or in an area that can lead to greater profits per transaction.

By Lender

Potential customers that have spoken with a lender may already be approved or pre-qualified for a loan, and are closer to completing an actual transaction than those who aren’t yet. Ask about this important financial preparation.

By Secondary Demographics

Focusing on a lead’s age, gender, job title, or other information you have can uncover leads you have things in common with, or information on things they may be looking for in a property. Knowing these facts can help them feel more comfortable speaking with you and go a long way toward converting them into customers.

By Source

Leads can come from a variety of sources, such as online ads, social media, direct mail, or word-of-mouth. Knowing the source of a lead can often help you prioritize it. For example, a word-of-mouth lead usually has some connection to a former customer or someone you know and could be more amenable to working with you. A social media lead may have reviewed more options already (almost 90% of realtors use Facebook to generate leads) and may be less urgent to contact and qualify. Knowing a lead’s source could change the kind of outreach you make, so sorting this way could help refine your contact plan.

With CRM Tools

A Customer Relationship Management (CRM) system can help you automate many of the tasks involved in tracking and managing your leads. Using it to help sort leads can free up your time to focus on building relationships with potential clients. It can also help measure the effectiveness of your lead generation and conversion strategies. Many CRM systems can store information about customer interactions, including sales transactions, support inquiries, and marketing efforts, giving you a firm basis for every follow-up. Deploying a CRM can be one of the most effective ways to improve your success rate.


For the best classification, you’ll also need a strong lead generation strategy that can attract the kind of leads you’re seeking. Make preparations to nurture your leads and keep them engaged with events like open houses, articles and tips about buying or selling, or content such as video tours. And remember to personalize your outreach so each lead feels like you’re speaking directly to them.

The ideal way to classify leads will depend on your specific needs, but by doing so in a way that is meaningful to your process, you can better prioritize your time and resources. The more specific you can be, the better you will be able to target your next steps, marketing and outreach. Be sure to update your lead classifications regularly because, as each move through the home buying or selling process, their needs and priorities will change. Tracking the progress of your leads can also identify any potential problems and resolve them quickly. Ultimately this increases your chances of converting leads into clients.

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Viviana Grisales

Marketing Specialist

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