According to the National Association of REALTOR®’s (NAR) most recent statistics, approximately 8% of home sales were For Sale By Owner transactions. That represents a significant portion of the market, so tapping into it can have a big impact on your bottom line. If you’re looking for the opportunity to convert FSBOs into clients, you’ll need to better understand how these homeowners think and how to speak their language.
1. Understand the FSBO perspective
There are a variety of reasons that FSBOs choose to sell without an agent. Some of the homeowners who sell their home themselves are doing so because they already have a buyer in mind and are merely conducting a straightforward transaction. Those FSBOs will have little interest in agent services since they probably have agreed on a price and will use an attorney for the transaction itself.
Most FSBOs, however, are selling By Owner in order to avoid paying a real estate agent’s commission. This is especially true in today’s hot seller’s market where more homeowners may be considering going it alone to maximize the profitability of their home sale.
FSBOs can be resistant to pay for the services of a real estate agent for a myriad of reasons, including:
- “I know my neighborhood and my home better than anyone. That makes me the most qualified person to price and market my home.”
- “I know plenty of people around town. If I let them know my home is for sale, they’ll beat a path to my door.”
- “Real estate agents don’t really do anything. They just put the home on the MLS and wait for a buyer.”
- “My home is perfectly decorated and maintained. Anyone would be lucky to buy it from me.”
- “I’m in no hurry to sell my home. I’ll pick my price and wait for the right buyer to appear.”
While these assertions may be frustrating to you as a real estate agent, it’s important to know that this is the mindset you’ll encounter. It is vital for you to go into any interaction with a FSBO lead armed with the facts to counteract these mistaken beliefs. Here are a few suggestions:
- Home valuation depends on a variety of factors, including comparable properties and market conditions—any of which can affect the current value. That makes pricing a home difficult for most FSBOs.
- Marketing a home effectively requires more than word of mouth. The vast majority of serious home buyers start their search online, with professional photography and other marketing collateral helping them narrow their search.
- Real estate agents offer value through consultation, pricing, marketing, and transaction management. In addition, many offer help with staging and other services designed to streamline the process. They pay for all of these services out of pocket and if the home doesn’t sell, they don’t get paid.
- While the home may be beautiful, that doesn’t always translate into a quick sale or a top-dollar price. Preparing and staging a home for today’s buyer, and then marketing it correctly, have far more to do with optimizing the price and days on market—and those are the services that a real estate professional is best qualified to provide.
- An overpriced home that has been on the market for months or even years is not becoming more desirable. It is becoming less likely to sell as time goes on. Buyer perception is of vital importance and a potential buyer will assume that something is wrong with the home when it has hundreds of days on market.
2. Look beyond the MLS
Most FSBOs who have listed their home on the MLS have already been contacted by every agent in town. In order to reach the homeowners who are more likely to hear your pitch, drive around your area and look for for-sale signs at homes that are not listed on the MLS. These sellers may have little idea how to properly market the home and manage the transaction, making them more open to a well-crafted listing presentation.
3. Focus on short-term goals
You don’t have to convert the FSBO into a client on the first contact. Focus on making a connection by phone or email, then focus on getting a foot in the door. Spend time listening to the homeowner’s beliefs, and then refute their misconceptions. Slowly but surely you will develop rapport and build trust, eventually allowing you to sign the homeowner as a client.
4. Create FSBO-focused content
Don’t go into a listing presentation with your standard marketing material. Design a presentation specifically focused on answering the objections the FSBO will have. In addition, add FSBO-focused content to your blog or video channel so that you can educate and inform homeowners while they’re researching the FSBO process online.
5. Use statistics to emphasize your value
FSBOs are price-sensitive and numbers-oriented, so you should be, too. Use statistics like those provided by NAR to explain the value you bring to the home sale. Help FSBOs understand the potential liability and financial impact of improper paperwork, errors, and omissions. Justify your commission in dollars and cents so that the homeowner understands what is included and why you matter.
6. Keep in touch for the long haul
FSBOs may be reluctant to talk with you at first. It may take several contacts over a period of weeks or months to get a foot in the door, then you still may need to spend some time patiently educating them and convincing them that you’ll be able to help them. Don’t let initial rejection put you off. Remember, it is very difficult for people to change their minds, and your FSBO homeowner has probably convinced him or herself that they know better than you.
Continue to reach out by mail, email, phone, or visit, offering your service and providing needed information. As you develop your skills in handling objections and refine your promotional materials, you may find that converting FSBOs becomes an effective and consistent strategy for generating leads and growing your business.