Converting FSBOs; Giving Up Pennies to Make Big Dollars!

By
Real Estate Agent with Big Block Realty 858.232.8722 CA BRE# 01261476

A client recently shared a lead to his neighbor he knew was planning to FSBO. I finagled an appointment with his help and sold the merits of myself and my services to a FSBO (For Sale By Owner). They initially asked me, “why would we need you, our neighbors want to buy it, they accepted our price and we’ve known them for 30 years?”

 

FSBO

Warning; compromise ahead:

  • I explained about how friendly discussions give way to all-business offers. (And it sure did).
  • I explained that my E&O insurance would protect them against liability. (They didn’t think about that).
  • I explained I'm "paid" to spend my time on this escrow, they are losing money at work, by being home to manage the minutia of an escrow.
  • I shared that I could be the “bad guy” when they really wanted to counter something without jeopardizing their friendship; “Blame me!” (We had 13 countered points)!
  • I explained that I can think of potential issues from my experience that they’d never see coming; I sell 2-3 homes per month on and off the market, they’ve sold …well, never, this is their first!
  • I showed them creative solutions to complicated “differences of opinion” within the offer that avoided confrontation; (Preserving the relationship while compromising terms on both sides).
  • One of the biggest points was I shared that they can save them at least $24,000 How? Well, the other side, the buyer was going to bring in their own agent. That agent would have demanded 2.5% for his services minimum in our area on a $960,000 deal; our deal. By hiring me, they only pay that, I let the buyer use one of my partners whom I compensate and yet we’re an arm’s length deal and boom, one commission not two. Dual agency but each party with their own ethical agent.
  • I get an almost million dollar sale in the heart of my primary service area, I make $24K and give my buyers agent a piece, she’s happy for the found money and essentially its just paperwork and minding an escrow (yes with all the usual concerns and complications, but quite a jump-start to the escrow part).
  • This is the conversation we had and by the end, they were convinced. FYI they were lawyers; that's why they felt they could FSBO and I still got them to hire me.

 

Here’s the bonus: if this deal falls apart, I have (in writing) the listing on the open MLS market for a full fee!

 

I’m sharing this to help you get out of that box and use creative, beneficial methods to help your client and still make a living. It’s not about how much you make every deal as much has having consistent deals. I can have a great year without bleeding every penny out of each deal. So can you. Sometimes it’s worth “spending” or giving up $5,000 to make $24,000. I mean, if I guaranteed you a 5X return on your money, wouldn’t you invest it? I’d kick myself to walk away from $24K over the principle of getting 3%. I’m not a fan of discounting my services and I negotiate every deal from 6%, but with FSBO’s you have to get creative.

 

What is your opinion, where do you get creative to get extra work like FSBO’s or Expired’s etc.?

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Selling
Tags:
realtor
for sale by owner
sales tips
fsbo
real estate
realtor to realtor

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Ambassador
1,678,058
Michelle Carr-Crowe-Top 1% Diamond Certified Real Estate Team Sells Cupertino San Jose Homes-Just Call 408-252-8900
Get Results Team...Just Call (408) 252-8900! - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Congratulations on a great sale, and convincing lawyers they were better off hiring you.

Jan 18, 2017 09:56 PM #1
Ambassador
2,583,915
Paul S. Henderson, REALTOR®,CRS,
RE/MAX Professionals. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I've been lucky to only have dealt with one nasty FSBO client Thomas J. Nelson, Realtor, CRS. I now work with them all the time.

Jan 18, 2017 09:59 PM #2
Rainmaker
515,217
Nathan Gesner
American West Realty & Management - Cody, WY
Broker / Property Manager

It sounds like you understand the value you bring to a transaction and were able to communicate that clearly. Well done!

Jan 19, 2017 05:35 AM #3
Ambassador
2,285,884
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

FSBO's are tricky - especially attorneys who think all they need to do is understand the contracts.  Nicely done making the conversion.

Jan 19, 2017 09:38 AM #4
Rainmaker
711,658
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

Congratulations to you.  You focused on their needs and met them while getting paid a reasonable fee.  Why doesn't the real estate industry focus on the client needs rather than a legacy commission compensation system.

 

Sellers go FSBO because they do not perceive the value of the commission being charged.  It is about the money. The industry needs to be open to providing alternative solutions to meet their needs.  Flat Fee Listings, Hourly Fee For Services, and Real Estate Consulting offer the seller additional choices to meet their needs while saving their equity.  All of the issues mentioned can be addressed by a real estate broker/agent who is open to alternatives beyond the legacy commission compensation system.  And a benefit to the real estate professional, you get paid for your time, knowledge and experience without waiting for the transaction to close. Changing the risk/reward calculus means lower cost to the seller while the real estate professional gets paid a reasonable fee for their services in a timely manner.

Aug 06, 2017 02:27 PM #5
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
746,548

Thomas J. Nelson, Realtor,CRS,e-Pro

Co-Host of Mail-Right's: Real Estate Agent Podcast
Referrals & Sales-free Help / Info Here.
*
*
*
*
Spam prevention