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Is a FSBO Worth Your Time..Look At The Numbers

Initially, a seller will go the FSBO route to avoid paying a commission. Many think the process of selling a home is easy until the reality of how difficult it really is sets in. When the house does not sell, the FSBO has second thoughts.

According to the National Association of Realtors, only about 12% of all home sale transactions are completed without a real estate professional. This means approximately 88% of homes sold did use a Realtor.

I like those numbers. The numbers present a great opportunity for Realtors to convey to a FSBO. And with numbers like that, I'd say a FSBO is definitely worth investment of my time.

Posted by DDR Realty, Orange County NY on 10/13/2007 08:10 PM

Comments (40)

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40 Comments on Is a FSBO Worth Your Time..Look At The Numbers

OCT

2007

They sound like they might be worth the time based on those statistics, but I'd like to hear some effective marketing strategies for them. Any suggestions?

Yes the numbers sound good, but I am with Keisha. I have yet to see a marketing strategy directed toward FSBOs that has a ROI better then chance. That is, it seems whoever talks to the seller at the time they break gets the listing.

Keisha - Start by Knocking on the door and present yourself in person. Introduce yourself and your company.

It sounds like a great market, but where does one start marketing to them? Do you mail letters? Because, the Do not call restrictions make it harder to call. Will people read a letter. How do you grab them. I'd love to hear your thoughts.

Derrick, excellent advice. Very few bother to physically say hello- I'd rather list with a person than an ad, or a stranger on the phone.

Roy - Chance may play a role, however making contact in person and staying in touch can make the difference.

FSBO's are an active market and there is an opportunity. I have worked the FSBO market and I work hard with little results. I too would be interested in effective marketing strategies for them.

Adele - I would not suggest a mailing for the initial contact. Present yourself in person...face to face. After the initial contact is made, a mailing could follow.

Laurie - Thanks. Meeting in person is important. More than just words are being judged when communicating in person.

I've approached an overpriced FSBO last week. His job had him transfering to a city about 50 miles away. He comes around once a week to mow the grass. He offered to pay me 3% if I bring a buyer. He states he has had quite a few calls but obviously no offers to speak of. His reasoning for overpricing is he doesn't want low income people moving into the neighborhood. I know this doesn't make sense because high income people will buy new construction for the same price he wants for his 1979er. We have spoken on the phone twice. The last time was to cancel the appointment we had. He is a pastor and was too busy to meet with me. He apologized and he asked to reschedule. We did. He gave me his email address to confirm the appointment. I did. Pretty much at the end of the conversation he stated that he'd like to get it over with and move on with his life.
I admit, I'm not very experienced with FSBO's but I believe I know everything I need to know in order to get him to list with me at a reasonable price.

When it comes to contacting FSBO's.......if they are not home, I leave them a letter tucked in the front door. I use a Christmas red envelope. I know they'll open it, it's the color!

Andrea - The key is you approached the FSBO. In person and followed up. Congratulations.

FSBO'S CAN BE STUBBORN, but they can also be a great value of resources for agents! If you offer them the right things, they can be some of your best top referral sources for new potential buyers! It's all about building a relationship with them and staying in contact with them!

I have great ROI with FSBO's! I have put together a marketing packet which includes my personal stats as a Realtor, as well as some non-definitive information on what price their home should sell for. I always approach them when they are home, but try to NEVER interrupt their dinner time. I also try to catch them shortly after they have begun to work as a FSBO. Watch papers, view online FSBO listings, etc. If you catch them in the beginning, show interest in their home, offer them a LITTLE advice, but definitely nothing they couldn't have figured out on their own, keep in touch with them, build a relationship... they usually end up having you list their home. I don't think 6 out of 10 is bad, and that's where I was at before I got sick...

Enjoy FSBO marketing! I know I do!

Michael - Very true. When you win them over they are willing to share information with you.

Sara - You are first marketing yourself when you approach a FSBO. And obviously you do that well. You ROI indicates that. And good for you. - FSBOs are definitely worth your time.

Just think of the FOR SALE BY OWNER sign as a "HELP WANTED" sign -- and go apply for the job!!

The best approach is showing up in person and then good follow up. You are right that FSBO is a great source of listing because after a few weeks frustration set in and the FSBO is eager for the agent's assistance.

OCT

2007

Barry - I not only agree but also like your spin on this.

Jennifer -The agent who over time has established a good relationship and rapport with the FSBO will most likely get the listing.

I have never tried to convince a FSBO that I could do a better job. I think the relationship would be fraught with difficulties because you are dealing with someone who has already failed. There's enough business for me without going that route.

Most FSBO's don't realize how complicated selling a home can be; nor do they have any idea how to market their home. They assume just putting a sign in the yard will do the trick-

Hi Derrick,

I do alot of business with FSBO. They are very difficult to deal with but they are a good source for new listings.

Simon - One good thing about our profession is that we can concentrate on the specific market niches of our choice.

Barbara-Jo & Bill - In most cases, the reality sets in after awhile.

Anthony - I'm glad that marketing to FSBOs is working for you.

OCT

2007

I believe in sincerely offering a helping hand to FSBOs. I may or may not get the listing, heck, I may not even want the listing but hopefully, I've made a friend who will remember me at some point with a referral and maybe I've improved their perception of realtors since most of the FSBOs thing we are robbing them with the commission.

Donna - I couldn't agree more. Once a good relationship is established, a FSBO can be a valuable referral source.

Derrick -- Are you sure that your conclusion about the statistics is correct? I haven't looked at your source but if 12% of all home sale transactions are completed without the use of a real estate professional it only means that these 12% of transactions didn't use a real estate professional. You can't conclude that 88% of all FSBOs won't sell. The correct conclusion is that 88% of all home sale transactions involves a real estate professional.

That said, I do agree that FSBOs provide us with an opportunity to spread goodwill and perhaps even gain new business.

Michael - You are correct. 88% did use a Realtor. I've rephrased the conclusion. Thank you.

OCT

2007

I actually go by the home and take a photo and put together about 50 or so very attractive FSBO FLYERS. I write a letter introducing myself and wishing them luck with their endeavor, however if the time comes and they do wish to list with a Realtor that they think of me. I have had success with this. Most FSBO's are being contacted 100's of times a week by agents wanting to list their house. I prefer the non-confrontational approach.

I do like others ideas also.

OCT

2007

I like those numbers too Derrick - I wonder if the numbers will increase in the current market?

OCT

2007

Justin - Builting a relationship with the FSBO will definitely improve your chances of obtaining the listing.

Barbara - The numbers are good statistics to present to a FSBO.

OCT

2007

Derrick do you actively seek out fsbos..if so, how do you approach them, and what is your success rate

OCT

2007

Konnie -I would not say actively, but I do market to FSBO on occassion. The approach is to meet them in person to establish a relationship with them. And then to stay in touch with them. I have about a 25% success rate in obtaining the listing, but a much higher rate in terms of obtaining referrals and other contacts.

OCT

2007

Hi Derick,

I think going after FSBO is a good business decision. I myself do convert some FSBO'S, if you listed one FSBO a week............That is Good!!!!!!!!!!

Anthony - It can prove to be a good niche. Thanks for stopping by again.

Derrick - I work with a ton of FSBO's. I always give them a little chat about the advantages of listing with an agent. Often they are hesitant because they don't know a good agent and just want to give FSBO as shot. Last year I referred 7 FSBO's to agents that I work with frequently. It is just another reason to get in with your local Home Stager. A lot of the time stagers are the first call people make in the real estate process.

Maureen -Thanks for the tip. The advice is worth considering in today's market. Many FSBOs may perceive Home Staging as plus and would initially be more comfortable with a Stager than a Realtor.