What Does a "For Sale By Owner" Want?

In my years of working on "things", whether it's an automobile or a house, one statement has always rung true - The right tool for the right job! Yes, things can be accomplished with other tools but the outcome is Sooooooooo much better with the specific tool for that job. I want to be the SPECIFIC tool to sellers, FSBO or otherwise.

Phil, your permission to plagiarize that insightful analogy? Great post. 

Phil, Great bottom line statement.  A great statement regarding business organization and structure goes like this. "If both of us can do the job one of us in unnecessary."  So it is with FSBO's. If my information serves me correctly 5% of FSBO's are successful.  That success rate may be optimistic in a Buyer's market with poor market data and little or no access to, the internet, where 84% of the Buyer's are. These facts make selling FSBO's far easier than in a Seller's Market.

FSBOs think they know what they want where in fact they don't know. What FSBOs are doing is nothing more than feeling agents out to determine if they have a good listing that can sell or something for free that they can use without having to give up their listing. If they really wanted an agent to list that property, we all know that would be a cinch. I have also seen FSBOs who hardly have a clue in what they are doing...And be behold, they hand over the listing to a Realtor® after claiming that they would not. It's a crap shoot.

Yet, they would not turn down a CMA from a Realtor®.

When I am previewing a FSBO, within the first few minutes of my preview, I steer my conversation toward the commission structure. After all, FSBOs do not have to compensate YOU for the transacting their properties. It's up to you as an Agent to establish how you are going to get compensated. I agree that FSBOs want Buyers and so do I. Because, if I have a "committed" Buyer, regardless of what the FSBO wants, my firm and I will be compensated. In this case, the ends must always justify the means.

Well, talk about obvious!  And yet, we forget it all the time.  They want a buyer, as we all do.  So the idea is to show them that I have a lot better chance of finding them a buyer then they do on their own.  And the bigger distinction I can make, the more I can charge them.

Well, I don't think that we are a commodity and I stand behind that statement.  "People buy people before they buy real estate."  The perception that a realtor is an unwanted middleman is damaging.  My agents do not just open doors to prospective buyer clients so that they can look to see the inside.  My buyer agents offer mortgage pre-approval, counseling, financing, home warranties, homeowners insurance, connection services and a whole slew of other features of working with a Weichert agent and our Gold Services partners.  On the seller side, we offer marketing advise and consultation, price evaluations, buyer verification services, home warranty protection, moving and relocation services on top of providing the best possible customer service and open houses.

The day that we become viewed as no different from Brand X down the street is the day that I hang up my "going out of business" sign.  I certainly have no intention of doing that !

Excellent, way to hit the nail ont he head.  Noone wants to pay for anything if they don't have to.  I like the direct point of view. 

So simple. So true. Thanks J. Phillip.

Good point.  I have a FSBO since I am selling my parents house.  I have flyers all over the town and a co-op with an agent.  So far we are even at 4 showing by the agent and 4 showing by my contacts.  With no carrying costs except taxes, the market is beginning to rebound in our area and housing prices are level to increasing.  No hurry on this end.

Phil,

Short ,sweet and totally accurate! Very concise!

Thanks,

Kathy Opatka

I don't think it's true that "Nobody wants an agent.  They want a buyer."  I speak with a lot of people who are "For Sale By Owner" and of course they want a buyer, but many also have had bad experiences with an agent and are reluctant to repeat the same mistake.  They want guidance through the process, yet they also want to save as much money as possible in order to take maximum equity to their next home or just have enough money after commissions are paid to be able to make a deal with a buyer without having to bring a check to closing. 

People don't sell houses everyday, and with such a large transaction, it's very uncomfortable for many.  Laws change all the time and one buyer's offer can be completely different from another's, and a skilled agent who can actually provide the value they are charging can protect and educate their seller client in such away that they are thankful they switched from FSBO.

How timely, I just met with a FSBO seller yesterday.  The reason they are FSBO is simple, they met with a couple agents, didn't like the price suggested of their overimproved home with a couple derelict properties around them.  They think their house is worth every penny of what they are asking and they've been trying to sell it themselves for 6 months. 

They downloaded RE contracts from the internet and there is nothing a RE agent can do for them that they cannot do themselves.

Cue trainwreck.

Yes, your point is right on! I do have to take note that they are not thrilled with paying an agent, otherwise they would have listed with one to begin with. They are convinced that they can do the same thing and save some money. That can be true sometimes and false many more times but I think.... that is their initial perceived thought. I think it takes them a while to realize that marketing is big part of the picture, negotations, more time involved in the planning and enough paperwork to kill off a tree. I thought being a Realtor was much easier before beginning as well so I can't really blame them. Hopefully they have a new respect for the amount of time and appreciation when they see it is not as easy as it seems.

Yes, your point is right on! I do have to take note that they are not thrilled with paying an agent, otherwise they would have listed with one to begin with. They are convinced that they can do the same thing and save some money. That can be true sometimes and false many more times but I think.... that is their initial perceived thought. I think it takes them a while to realize that marketing is big part of the picture, negotations, more time involved in the planning and enough paperwork to kill off a tree. I thought being a Realtor was much easier before beginning as well so I can't really blame them. Hopefully they have a new respect for the amount of time and appreciation when they see it is not as easy as it seems.

Great statement and one to remember well.

One of the best posts and comments that I have seen in a while.  Great stuff in here.  I'm getting ready to start marketing to these people.  Wish me luck.

Very true Phil. Sometimes you bring them a Buyer and they are tired of TRYING to sell.  Introduce the Buyer and be prepared to earn 5-6% representing BOTH sides.

For me, the best part of this post was the eye opener:  listed property owners don't really want an agent either, just the buyer.  So true.

I have to say though: many FSBOs want a buyer at an unrealistic price, more so than listed property owners.

great post and interesting comment thread, but whether we talk of what is best for the FSBO or the Buyer, we cannot forget what is best for them will always trump what is best for you and when we focus on that , much like understanding the point of wanting a buyer versus wanting an agent, we will always find success!