Chances are you’ve heard of FSBOs…but don’t know how to leverage them. FSBOs, or “for sale by owner”s, tend to be an area of mystery for newer agents, but the reality is that they’re a great source of potential leads for newer realtors. FSBOs have chosen to list their house all on their own, without help from an agent. They might be thinking they will end up saving money, or perhaps they’ve had a poor experience with an agent in the past and want to go at it alone.
Whatever the reason, more than 80% of FSBOs fail to sell their home successfully. In the end, they are unprepared to sell their house for a competitive asking price, or in a timely manner. Most FSBO sellers do not know how to correctly price their propety, do not understand the basics of real estate marketing, overlook important documentation and processes, and sometimes fail to correctly address issues raised in the home inspection. Enter…you!
FSBOs are a bit different than your typical client as they have a reason as to why they do not want to work with an agent. For this reason, your strategies will differ a bit compared to typical clients. See below with tips on working with FSBO clients.
Where to look
Your first step is finding the leads. Look out for ads posted at grocery stores, in the newspaper, and out in the world via FSBO yard signs. Put your friends and family to work and ask them to keep an eye out for these properties. Have them snap a photo of the house and sign when they see one and text it to you. Additionally, there are online companies out there you can subscribe to that will send FSBO listings right to your inbox. Sites like Craigslist, ForSaleByOwner, Zillow’s For Sale By Owner, and Zillow’s Make Me Move has tons of FBSO listings you can peruse.
Show them what they’re missing (but don’t be too pushy)
When you reach out to FSBO leads, remember that they may have had a bad experience in the past with an agent, which is why they’ve chosen to try to sell without one. Make sure you are providing value to the FSBO lead, but not in a pushy way. Rather than presenting FSBOs with formal listing presentations, offer your expertise, advice, and contacts to help the FSBO for free in a casual manner. They will be impressed by your knowledge and willingness to help. Put together a packet just for FSBOs, including important forms, tips on staging, and samples of mortgage approval letters and inspection reports. Giving them this good information will give them a little glimpse into the overwhelming amount of work involved in selling their home, and they will appreciate you going the extra mile to provide them support.
Know their pain points
In order to anticipate and address the problems FSBOs face, you have to be familiar with with their biggest pain points. The most common reasons FSBOs fail are below:
- The asking price is too high
- No marketing (or incorrect marketing strategeies)
- No offering of a buyers’ agent commission
- Unable to attract qualified buyers
- Not qualifying prospective buyers correctly
- Missing important documentation
- Bad curb appeal
- Bad staging
- Failure to address issues raised by a home inspection
- Being present during open houses and showings
In your conversations with FSBOs, raise these important points. Ask leading questions to help guide the FSBO to their own blind spots. Here are some questions you can ask:
“So, what kind of things are you doing to get exposure for your listing??
“What kind of response have you had so far with your marketing?”
“Would you like to know how I would market your home if I were you?”
Keep at it
You will likely need to nurture an FSBO lead more than a typical client. You’ll likely have to make frequent follow-up calls and hear “no” quite a bit. Keep good notes in Excel or on a Google doc of each FSBO, including conversation topics, home features, and when you intend to call them back. The spreadsheet will keep you organized on when to follow up. Remember, the FSBO has a very, very low chance of selling their house without you. If you continue to provide value and support, they are very likely to try a different strategy after some time of no movement. Be patient, don’t be pushy, and nurture these contact.
Once you gain some experience in this, your conversion rate for FSBO to listing will become higher over time. You’ll be able to give FSBOs examples and contacts of past clients who have had success with you and wished they’d worked with you sooner. Remember to not be pushy and to keep at it, and FSBOs could become your newest niche.