How to Approach a FSBO (For Sale by Owner)

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Mortgage and Lending with Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, NMLS #138061 MMCD #1141
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How to Approach a FSBO (For Sale by Owner)

 

 

     "Work expired listings & FSBO's!".  This is the advice nearly every new real estate agent receives as a way to strum up business quickly and get started on building an empire of listings.  At least that's how it seems.  The problem becomes when every agent starts doing this, the FSBO's and Expireds get caught in a real estate agent free for all, and no matter how good their intentions may be, agents can easily come off as hyenas.  For Sale by owner marketing

 

 

     So what's an agent to do?  The fruit is RIGHT THERE!  They're OBVIOUSLY wanting to sell their home, so are the only options to either leave them alone & miss out on the opportunity, or put on your hyena suit and hammer the phone line?  Although those may be the 2 most common approaches, the good news is there's a 3rd option - what I like to call a 'soft' approach, or more broadly, "doing it right".

 

 

     To increase success when approaching a FSBO, you need a couple of things - first, you need to be on your "A game" and approach with well-deserved (because you've educated yourself...more on that later) confidence.  Second, and most important, you'd better dial that number or knock on that door with some value in your hands.

 

 

     While percentages certainly vary from market to market, the overall numbers make it obvious that using a Realtor is better than selling a home FSBO in most cases.  Sales prices are higher, there's less risk to a seller, the process is easier, and a home sells faster.  What's not to love?  For many homeowners, it's simply a lack of information, or worse, misinformation they've received that makes them keep real estate agents at arms length.  For this reason, the "you're wrong and here's why" approach just doesn't get good feedback.

 

 

But value?

 

 

     Showing up and offering information about the local market is value.  Comps are value.  Insight into buyer trends and staging ideas is value.  Do you want the listing?  Yes!  Are you going to ask for it?  No.  In fact, in most cases you don't have to.  Something like 90% of FSBOs that do eventually sell, sell with an agent listing the property.  Why not show yourself as the local professional with a ton of knowledge, and if & (most likely) when the time comes, you'll be the local pro they need to get the listing up and the home, finally, sold. 

 

 

     Next time you approach a FSBO, think first about what value you're offering them.  Do you have local market data perhaps they haven't seen? Do you have the time to stop by, introduce yourself, and offer to check out their home to see if there are popular staging methods they can use?  Some people call this "working for free", but I call it building rapport.  Let's face it, until a transaction closes, we're all working for free.  If you're a partner of mine in business, you may know about my prime services suite, which would even allow you to create (ok, have created for you, at no cost) marketing materials for a prospective FSBO client.  There are a ton of things you can do, but doing something of value for a FSBO will at the very least turn you from just another agent to someone a home owner knows - that's WAY more impact than an annual refrigerator magnet will ever get you.

 

 

     Working the FSBO market is a great way to pick up listings.  In fact, simply having the guts to call a FSBO or stop by will set you above a lot of others.  Doing it right, however, will lead you to success far more often than putting on a hyena suit and joining the pack.

 

 

Oh, and those expired listings and the approach to take there?  That's a different blog for a different day.

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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Tony and Suzanne Marriott, Associate Brokers 03/31/2016 11:02 PM
  2. Lori Bergeron 04/02/2016 12:39 AM
  3. Praful Thakkar 05/30/2016 02:01 AM
  4. Winston Heverly 06/19/2016 02:22 PM
  5. Lise Howe 09/29/2016 11:12 AM
Topic:
Real Estate Best Practices
Groups:
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Tags:
marketing
value proposition
cold calls
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Rainer
15,601
Marjorie Dybec
Douglas Elliman - New York, NY

I've always tried to engage the homeowner in a conversation about their most recent experiences with RE agents or their opinions/assumptions about us. Sometimes it takes some finesse to draw out honest and not snarky answers.

Of course every seller wants to put more money in their pocket. However, I find above that, most FSBOs believe they can do a better job. I try to find out WHY they believe this. And then I can decide if this is a person I want to work for and if so how can I show them I am their best choice.

Apr 02, 2016 08:00 AM #52
Rainer
132,458
Theresa Akin
CORPUS CHRISTI REALTY GROUP - Corpus Christi, TX

This is a great post! I got a listing by FSBO. They were trying to sell their property and I called. I had actually been interested in purchasing possibly as an investment. When I called about the property and realized its location I changed my mind but didn't let the seller know. Upfront I let them know I was a realtor. I didn't push it just inquired and asked a few questions. It had been on the market for some time. Did comps while on the phone and made arrangements to view the property. As any good realtor, I had a listing agreement with me. I sent a CMA to the sellers. That was all it took. Signed and sold listing within 3 months. One buyer financing fell through.  Today there are so many apps to show FSBOs information in a few short seconds. If you have a buyer inquiring about the property, better yet.

Apr 02, 2016 09:57 AM #53
Rainmaker
1,043,605
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

I recently listened to Real Bird webinar on Expireds, published here in the Rain as well. It inspired me to add them to my marketing plan. 

Apr 02, 2016 05:33 PM #54
Rainmaker
508,570
JM Padron, CCIM
REMAX PREMIER-COMMERCIAL ASSOCIATES - Weston, FL
CCIM, MRICS, Serving South Florida

The best approach is to call in and make an appointment to preview the home, bring in a professional CMA,  and ask permission to take pictures to prepare a package and send it to potential buyers. This besides or maybe getting at least one side will earn trust with the Seller and may decide it to end up giving you the listing.

Apr 03, 2016 01:35 AM #55
Rainmaker
1,204,256
Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

John, I had a client call the other day because our listing expired and I hadn't relisted it yet (24 hours). The days that followed, the client was inundated with post cards, calls and offers from well-meaning agents to sell the property. He asked if that was normal. Of course, I said it was. I like your approach.

Apr 03, 2016 04:33 AM #56
Rainer
14,580
Irina Tibbits
Panhandle Real Estate, Inc - Panama City, FL
Investment, Sellers, Buyers,Relocation

Great topic !  It is looking very easy - they need to sell now ..but... It is very hard to contact FSBO, because they slam with realtors calles and doors knocking.  I was able to have FSBO seller only once so far. Its happends by accident ,  when I were with a customer showing property next door and he come up and said that he planning to put his house for sale in 2 month because of moving to new house which is still under constructing . My Buyers asking to see the house now if that possible , that as coner lot with carport as additional a side. Seller was very organized and house has lots of updated to compare the 1 st one. Buyers jump on his deal. We all met again 2 days after to sign the  contract. I am glad that works great for my customers (both of them) and me with better % commissions. :)))

Apr 03, 2016 04:41 AM #57
Rainmaker
279,002
Diana Dahlberg
1 MONTH REALTY - Kenosha, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Over the years I have worked with many FSBOs.  Most of them were because I had the buyer for their house.  But there were a few times that although I took a number of buyers through their  house I never wrote an offer on their home. But because of the rapport built during those showings, guess who they called when they were ready to list?  You got it.  Yours truly, 

Apr 03, 2016 02:56 PM #58
Rainmaker
1,238,635
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

Some people require more "touches" than others before they're convinced, so plan ahead for what you can send next. For instance: information about the disclosures they'll need and warnings about opening the door to people who haven't made an appointment in advance.

Apr 03, 2016 03:03 PM #59
Rainer
215,780
Ron Aguilar
New American Funding - Saint George, UT
Mortgage & Real Estate Advisor since 1995

I have a strategy we have been using for the fizbo market for the past 16 years. Since I am a Loan Officer these are the calls I time block in each day. Its a thing of beauty and all the defensive shields are down and the truth comes out. Agents, train your LO's on this idea, oh thats right they cant do this they dont have the time to build your biz... 

Apr 04, 2016 01:27 AM #60
Rainmaker
1,344,515
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

This is great advice. Just listed a FSBo after using the "soft sell" for about three weeks.  Patience, when combined with "value," will yield results!

Apr 04, 2016 02:17 AM #61
Anonymous
Karen

A real estate i worked with was very successful in listing FSBO seller homes. She would call and if she got a voice message, she would leave a message that says
'I'm a real estate agent. But I just got your recorded voice message. You may be missing talking to a buyer who is interested in your home. If you are missing talking to potential buyers, I can help prequalify buyers for you. Would you like to talk about my flat fee commission structure and what's included.?"
Then she follows up with a report - Mistakes FSBO Sellers make (because she has the address, Right?

Apr 04, 2016 03:57 AM #62
Rainmaker
70,023
Jim West
Keller Williams Capital Partners - Marysville, OH
Our Passion Is Helping 1st Time Home Sellers

John, I see you are a mortgage guy. Have you ever approached a FSBO or Expired? 

Apr 05, 2016 12:30 AM #63
Rainmaker
306,530
Mike Wong
Keller Williams Realty Southwest - Sugar Land, TX
Realtor: Commercial, Residential, Leasing, Invest

Value is key, whether FSBO or a regular referral for a listing appointment. You have to show your value as their agent and distinguish yourself from the competition. Years of experience on appointments helps. 

Apr 06, 2016 08:03 AM #64
Rainmaker
752,086
Jan Green
HomeSmart Elite Group,Scottsdale, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Great post!  It is so important to provide value added service to stay in and keep new business.  Great points all!

Apr 06, 2016 08:56 AM #65
Rainmaker
1,427,086
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Don't really market them much.  But I am working one now.  Just giving the seller a lot of info.  

Apr 12, 2016 12:35 PM #66
Rainmaker
1,182,812
Sandy Padula and Norm Padula, JD, GRI NMLS#1483386
Allison James Estates & Homes & Realty One - Carlsbad, CA
Presence,Persistence & Perseverance

John Meussner This advice holds true each and everytime we 'touch' a prospect. Value offered without any expectation of a payday does win many, but not all prospects. Great post!

May 30, 2016 02:04 AM #67
Rainmaker
533,307
Thomas J. Nelson, Realtor, CRS
Big Block Realty 858.232.8722 - La Jolla, CA
Co-Host of Mail-Right's: Real Estate Agent Podcast

Great post! Since more than 80% convert to selling with an agent, the odds are worth pursuing them; especially when they realize they will earn on average 13% more with a Realtor, which can be up to 7% more profit after the 6% they are trying to save. I never understand why FSBO's don't do the math, they lose more than they save statistically.

May 30, 2016 03:06 AM #68
Rainer
342,064
Anna Hatridge
Goodson Realty - Bonne Terre, MO
Missouri Realtor with Goodson Realty

Coming over from Praful Thakkar 's re-blog.  I read it the day it posted but then couldn't find it a again.  This time I bookmarked it so I can find it and share with others in our office.

May 30, 2016 09:23 PM #69
Ambassador
2,662,840
Bob Crane
Woodland Management Service - Stevens Point, WI
Forestland Experts! 715-204-9671

Thanks for sharing this John, I do need all the help that I can get when it comes to dealing with FSBO's.

Jun 19, 2016 03:54 PM #70
Ambassador
2,412,513
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

I have never taken a chance to chase FSBO's even though they are a ready target as you describe

Sep 29, 2016 12:48 PM #71
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