FSBO Prospecting Simplified
People who list their homes themselves don’t want to talk to you. Well, they do, but they just yet don’t know it. So your challenge is to explain why they need you and the value you bring. In this post, we discuss taking the right approach to FSBO prospecting.
This is going to take time, research, effort and some leads from Mojo’s real-time and aged FSBO lead services, or your preferred real estate lead provider. It might sound like a lot of work, but remember the work you put in ahead of time will be worth it since this is sometimes a neglected niche in the market. According to the most recent statistics from the National Association of Realtors, FSBOs accounted for nine percent of the more than 5 million homes sold in 2013. If you weren’t on top of FSBOs that year, that amounted to 458,100 missed opportunities.
Sometimes it Pays to Slow-Play a FSBO Lead
A key thing to remember when you are trying to convert an FSBO to a listing is to not be pushy. These folks may have already had a bad experience with an agent, which is why they are going it alone. Or they believe they are doing the right thing financially and don’t need a pushy agent.
People selling their houses themselves often don’t know what they are getting into. They think they can put up a sign and place an ad and someone will buy the house the next week. They aren’t familiar with the intricacies of contracts, negotiations, and closings. They don’t know that it takes more than a sign to sell a house.
With that in mind, FSBOs typically fall into two categories: those who give selling a try, but their hearts aren’t in it; and, those who don’t want to pay a commission.
The first group is a nice bunch because they aren’t committed to it. You usually can convince them to meet because, at the end of the day, they don’t want to do the legwork. They just thought they’d give it a go to save money. Again, it’s a numbers game, and if you’re calling enough FSBOs, every morning, you are going to find a bunch of those who think twice about going it alone.
The other group can be pricklier. They are listing themselves because they don’t want to pay a commission or perhaps because a previous agent let them down. Right out of the gate, this group probably believes real estate agents don’t bring much to the process of listing or selling property. They think they can make their fliers, put up a sign in the yard hold an open house and be in business.
With this type of homeowner, you want to prepare for the long game. On the first call, just focus on building a relationship.
Offer to bring them signs for the open house, throw in a brochure box, and ask if they have any questions you could answer before their first sale weekend. Then wish them luck and wait, until the following Monday when you call back.
On the Monday call, ask how the open house went and if they got any offers. Mention you sold three houses over the weekend and are seeing a shortage of inventory. Once again, ask if they need anything or have any questions.
Do this every Monday for the next few weeks. These conversations are great opportunities to build a foundation for a positive working relationship. Here’s an approach you can consider using: You may know that, according to NAR data, in 2013 the typical FSBO home sold for $184,000 compared to $230,000 for agent-assisted home sales. As you and the homeowner get to know each other, diplomatically drop that data into the conversation. The idea with an FSBO, or really any prospect, is to be helpful while not treating the homeowner like he or she is a complete idiot who’s making a huge mistake.
The Right Words Make a Difference when FSBO Prospecting
You could even try saying something like this:
“Look, I get it. You want to sell the house on your own; you want to save money. If I wasn’t a real estate agent, I’d do the same thing. I’m not going to try to sell you a thing, but what I would like to know is if you sold the house, where are you going?”
Or something like this:
“I don’t know if you know, but if something is going to happen with your house, it’s going to happen within the first 30 days. After 30 days, are you thinking about getting an agent? Again because, I get it, you want to try to save the six percent. If it doesn’t work out, is your plan B to hire an agent? If so, I’d like to talk to you about it. But right now, I’m going to respect your wish to try to sell it on your own, and, if you’re eventually interested, I may have a buyer for you.”
Have conversations on what the house could net. The most common reason people list the home themselves is because they think they will save the six-percent commission. That said, most homeowners would pay three percent to the buyer’s agent if you brought them a buyer.
So that conversation may go something like this:
Agent: If I was willing to bring you a qualified buyer would you be willing to pay three percent?
Prospect: Yes.
Agent: I’d love to come out, say Tuesday or Thursday, to see your home and see if it works for the buyer. I’d also like to show you what we do to get more homes sold in less time for more money.
By shifting the focus from how it benefits you, the agent, to how it can benefit them, you are highlighting a way out that will let them save face and money. You’ve created a realistic win/win scenario and proven your value as an agent.
If you continue this type of dialogue, somewhere around the six-week mark you should notice a change in the homeowners. They are starting to get frustrated that what they are doing isn’t working. They have lost their motivation and they want their free time back.
You want to be there when this happens. You want to be the agent who offered help, guidance and support when it seemed as though there was nothing in it for you. Because when they give up, who will they call? You. Because you stuck it out. You didn’t insult their intelligence to do it on their own. You put in the work and have earned the reward of your business.
Have more questions on how to engage a FSBO lead? Our friend Bob Loeffler, owner of the Fearless Agent, shares some quality tips below.
