Housing inventory remains low, enticing some sellers to list their homes without hiring a real estate agent. While a for sale by owner (FSBO) listing can sell quickly, the seller may walk away with thousands of dollars left on the table.
FSBO listings attract real estate agents because they are low-hanging fruit as potential clients. And because targeting FSBO sellers is a common marketing strategy for agents, you must offer them a more exceptional selling experience than your competitor.
Why Sellers Want to List as FSBO
To sellers, the benefits of an FSBO listing look great on paper. Especially if they enjoy doing all of the paperwork. For one, the seller doesn't have to pay a listing agent. A real estate agent's commission is one of the higher expenses for sellers, which makes sense based on the benefits an agent provides.
Top reasons sellers try FSBO:
- The market is hot, and they predict multiple offers
- They have prospective buyers in mind
- They aren't motivated by time
- They want to avoid agent fees
FSBOs also tend to sell faster, likely because the seller already has a buyer. On the other hand, the FSBOs without potential buyers lined up usually sell slower and under market value. It's important to note that the FSBO seller is expected to pay the agent's commission on the buyer's side.
How FSBO Listings Fail
There are several reasons why most FSBO sellers eventually hire a real estate professional. A real estate agent handles everything from marketing to paperwork to time management. Real estate agents know how to effectively promote listings to their network and a larger online audience.
FSBOs often fail because owner-listed properties don't receive the same exposure agent-listed homes do on third-party sites. Zillow, for example, prefers listings posted by real estate agents and Zillow Premier Agents. Additionally, you won't find FSBOs on your local MLS. They aren't allowed. This regulation further limits property exposure.
Top reasons FSBOs fail:
- Lack of online exposure
- The right buyers never see the listing
- No professional listing images or marketing material
- Buyers' agents avoid working with FSBOs
- An inaccurate list price
FSBO sellers are typically unaware of the latest strategies or products to promote a listing. They also don't have the same vendor connections as real estate agents. Most FSBO listings lack the essentials like professional real estate photography, interactive floorplans, virtual tours, and more that a real estate business would provide.
Lastly, FSBOs often get a bad rap. Some real estate agents won't even present FSBOs to their clients due to poor past experiences.
Tips to Win an FSBO Listing in Today's Market
It takes tact to earn business from the FSBO seller subset. These particular homeowners didn't intend to use an agent, and you won't be the only agent trying to win your local FSBO listings.
With this in mind, you must not only show the seller why you're the right agent to list their home, but you'll need to demonstrate why hiring an agent is in their best interest.
Here are some critical tips on how to find and win FSBO listings:
Build FSBO Lead List
Before wrangling your FSBO sellers, organize your leads and create an outreach strategy. You can find FSBOs through local Facebook Groups, Zillow, Craigslist, and online newspapers. There's also a website dedicated to FSBOs called forsalebyowner.com.
Reach out to Potential FSBO Clients
Once you organize your FSBO lead list, you can begin your marketing strategy and secure some listing appointments. Outreach can include cold calling, email campaigns, door hangers, social media ads, and direct mail.
Keep in mind that FSBO sellers are different from other homeowners. They may be more guarded or resistant to learning the benefits of hiring a real estate agent. Allow the conversation to warm up before asking for their business.
Set a Listing Appointment with the FSBO Seller
Request a listing appointment after your potential clients move through your marketing funnel. An FSBO listing appointment requires you to emphasize the benefits of a real estate agent overly. Not only should you illustrate why a real estate agent is necessary, but why you are necessary to get the job done.
Crush your FSBO listing appointment:
- Prepare your presentation for FSBO clients
- Bring these 15 things to your appointment
- Present your metrics and your USP
- Address their pain points
- Tour the home
- Describe your listing marketing strategy
- Leave with a signed agreement
Leave With a Signed Agreement
This part is critical. You need to leave the FSBO listing appointment with a signed agreement with the seller. If you don't receive a signed contract, your odds of winning the listing decrease drastically.
After completing your listing presentation:
- Ask the FSBO seller if they have any questions. Once you address any concerns and questions, you can ask them for their business.
- Let the seller know that your marketing strategy begins right after leaving a (winning) listing appointment.
- Allow the seller to review your contract and sign if they're ready to sell their home with your help.
It's rewarding to take on former FSBO clients. You have the unique opportunity to show a home seller the benefits of using a real estate agent while helping them sell their home for the most money possible.
You can expect repeat business and valuable referrals when you WOW an ex 'for sale by owner' client.