You’re Scoring the First Call With the Wrong Number: lead and lag indicators in real estate

I’m re-reading The 12 Week Year, which is basically a book about shrinking your goals into shorter, more focused periods of time. Instead of thinking about the whole year, you work in 12-week blocks. You set the goal, decide which actions should lead to it, and then track whether you actually did those actions.

Know the lead and lag indicators in real estate.

One of the most useful ideas in the book is the difference between lead and lag indicators.A lead indicator is something you do. A lag indicator is the result that shows up later.Calls, conversations, follow-up, appointments and open houses are lead indicators.

Listings, contracts, closings and commission are lag indicators. That sounds simple, but agents mix these up all the time. You call a For Sale by Owner, they tell you they don’t want an agent, and you decide the call didn’t work. But what were you asking that call to do?

If the assignment was to get a signed listing agreement from someone who has already decided to sell the house themselves, then yes, you are probably going to feel disappointed. That doesn’t mean the call failed. It means you gave the first step the final step’s job. Maybe the seller answered and talked to you for a few minutes. You learned why they’re moving. You found out how long they plan to try selling on their own. They agreed that you could check back next week.

That call may have worked exactly the way it was supposed to.

The problem is that you graded it using the listing instead of the conversation. We do this with every lead source. We hold one open house and expect a client. We call someone in our sphere and expect a referral. We follow up with a lead and expect an appointment right away. Then, when the final result doesn’t happen, we tell ourselves the activity didn’t work.

That is not really a fair way to measure it.

The first call might only be there to start the relationship. The second call may be there to build familiarity. The next one might uncover timing, motivation or a problem the person is finally ready to talk about. Eventually, those actions may lead to the appointment or the listing.

But not every step can be responsible for the finish line.

Before you make the call, decide what success looks like for that specific conversation. Maybe it is getting information. Maybe it is earning permission to follow up. Maybe it is simply becoming a name they recognize.

You still need to care about the final result. Of course you do. You just cannot use the lag indicator to judge every lead action along the way. The call may have worked perfectly.

You may have simply scored it with the wrong number.

FAQ: lead and lag indicators in real estate

What are lead indicators in real estate?

Lead indicators are the actions an agent can directly control. Examples include calls made, conversations held, follow-ups completed, open houses hosted and appointments set.

What are lag indicators in real estate?

Lag indicators are the results that appear after the activity has taken place. Listings signed, contracts written, closings and commission income are all lag indicators.

Why should real estate agents track lead indicators?

Lead indicators show whether the agent is completing the activities that are likely to produce future business. They provide a more useful weekly scorecard than waiting only for closings or commission.

Can a prospecting call be successful without producing an appointment?

Yes. A call may still be productive if the agent learns useful information, begins a relationship, earns permission to follow up or becomes a name the prospect recognizes.

How does this apply to FSBO prospecting?

A For Sale by Owner may not be ready to hire an agent during the first call. The goal may simply be to start the conversation and create an opportunity for future follow-up.

What is the main mistake agents make when measuring prospecting?

Agents often use a lag result, such as a signed listing, to judge a lead activity, such as one phone call. That can make productive activity feel like failure before it has had time to work.