A FSBO Refresher
Anybody who’s been in real estate sales for any amount of time understands that FSBO (For Sale by Owner) can be a significant source of revenue. This is especially true for Vulcan 7 agents who get the newest FSBO leads loaded onto their desktop every morning.
We’ve written previously in this blog about how to maximize your opportunities with FSBOs. In today’s post, we focus on some of the basics of prospecting FSBOs, whether you’re relatively new to the industry or have been selling homes for years.
The thing that experienced agents like about FSBOs is the understanding that these are homeowners motivated to sell. Yet, even though they may be motivated, it takes tremendous patience, and a slightly more nuanced approach, to working with FSBOs. Experience has taught high-performing agents a few valuable lessons about working with FSBOs:
- Be persistent in your follow-up efforts. The reason is simple: FSBOs can quickly become disenchanted and frustrated if they don’t have immediate success.
- Taking thorough notes on your initial call. Good note taking leads to relevant questions that can keep subsequent conversations moving forward. For example, when you find out that your FSBO prospect is holding an open house, you want to be sure to call the next day to check on their success. You may learn a lot about the homeowner’s feeling about selling on their own with a simple question like: “How’d your open house go?”
- Affirm and reinforce. Your FSBO prospect wants to feel as if they’ve made the right decision. The best way to begin building trust is to make them feel as if they’ve made the best decision ever: “Great idea to sell on your I think you’ll have a lot of success. And if you need any help, let me know.” It’s up to the prospect to come to come to their own conclusion that selling on their own was not such a great idea.
- Don’t force the process. Experienced agents know that the right, open-ended questions can uncover the homeowner’s motivation. When the FSBO says “I’m going this to save money,” your response might be: “That makes total sense, but let me ask you, what does saving money look like to you?”
If you’re relatively new to real estate and/or fine-tuning your prospecting approach, it’s important to remember one thing: FSBOs are generally easier to talk to than a new Expired. In most cases, those homeowners who couldn’t sell are frustrated, discouraged, and maybe even a little angry. They’ll be getting calls from lots of agents, all of whom have the right strategy to sell their home. These calls might exacerbate their frustration. New agents, with little experience fending off objections, can sometimes find new expireds challenging.
FSBOs represent the other side of the spectrum. They’re likely to be more comfortable and relaxed in the belief they will save lots of money by selling on their own. They might be friendlier and open to dialogue because they haven’t had enough time to get frustrated at the process. A couple of pointers for newer agents:
- Minimize the hard sell: Be persistent in your follow-up, but know that you should not be selling. Selling can be interpreted as you suggesting that the homeowner made the wrong decision by selling on their own.
- Pull back on your eagerness. Being overly eager is a common trap for newer agents. Because FSBOs are easier to talk to, you might assume it will be easier to get a listing from them. But that assumption can backfire.
- Provide value: Build trust by adding value to your initial conversations. Maybe you can remind the prospect of the importance of curb appeal, and suggest landscapers you know. Let them know you support their efforts, even if you don’t have the listing,
- Listen and learn. It’s easy to get trapped into talking too much because you’re excited to have someone answer your call. Your natural instinct is to take advantage of the time and do as much “selling” as possible. Learn the art of asking open-ended questions. Then, sit back and carefully listen as a way to uncover a seller’s fears and motivations
Let’s close with a few observations and tips to help you improve your opportunities to engage FSBOs:
- Understand a FSBO’s mindset: research tells us that 60% of homeowners don’t trust real estate agents. Which means, in essence, that any conversation with a FSBO starts from a position of weakness and suspicion. You need to work hard to earn their trust and confidence.
- 9 out of 10 FSBOs are selling on their own to save on the commission. Affirm their decision to build trust. “I have no doubt that you can sell on your own.” Don’t jump in by selling them on the belief that you can save them money. Build your relationship with a FSBO, while allowing them time to see what it’s like to sell on their own. You’ll know when the time is right to ask: “If I could help you sell your home and make more money, would you be open to that?” Or: “If there would be a financial benefit to working with me, wouldn’t you at least want to hear what I had to say?”
- Come at the relationship from a place of “we.” Use “we” to suggest that are you both in this together. “When we sell your home, do you have somewhere you want to move?” Or: “If you feel comfortable that working with me is in your best financial interest, would you consider hiring me?”
- Tonality and mirroring are important. With regard to tonality, you want to sound empathetic, enthusiastic and positive. Don’t sound as if you’re lecturing someone. Also, people want to be heard, so practice how to mirror back what they’ve said, so they know they’ve been heard.
- Building on an earlier point, always add value even if it doesn’t’ lead to an immediate listing. Here are a few thoughts on adding value:
- Guide them through the paperwork
- Suggest real estate-related vendors, such as mortgage brokers home inspectors, etc.
- Offer to help them with a seller’s disclosure form.
- Share ideas on how to stage their home
It might only take a few weeks for a FSBO to appreciate how difficult and time-consuming it is to be their own real estate agent. With patience, and by adding value, you can set yourself up to be the “go-to agent” when the prospect finally says: “I’m ready to pay that commission!”
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