High-performing agents have long-known the value of prospecting For Sale by Owner (FSBO) homeowners.
According to the most recent data from the National Association of Realtors, 8 percent of homes sold in the U.S. are through FSBO. NAR also estimates that the typical FSBO home sold for $217,900, compared to $295,000 for agent-assisted home sales.
Nearly half of FSBOs do not actively market their homes, with 25 percent relying on yard signs, and 22 percent on word-of-mouth through friends, family members and neighbors.
When queried on their biggest challenges, FSBO sellers lead with prepping their home for sale (12 percent), paperwork/contracts (10 percent and getting the right price (9 percent).
And, of course, as we see from the chart below, the number one reason homeowners choose to sell their own home is they don’t want to pay real estate agent commissions.
The good news for agents is that the about 9 out of 10 FSBO sellers eventually decide that it’s not worth the effort and turn to an agent. And, IMPORTANTLY: 7 out of 10 times, the FSBO seller will work with the FIRST AGENT who contacts them.
Which is why, if you’re using Vulcan 7, you are at a distinct advantage over most of your competitors. That’s because you’re getting the most up-to-date and accurate FSBO contact information on a daily basis.
But while it’s great to have superior data via Vulcan 7, you still need to work FSBOs much differently than you would an expired listing. The good news is, you’ll likely have less competition because most prospecting agents focus on expireds who tend to have greater urgency to sell. Still, while you may have less competition calling FSBOs, you have to approach these homeowners in a very careful, nuanced manner. You have to respect their decision to sell on their own, and approach FSBO prospecting as a longer-term proposition.
To that end, we want to walk you through some essential questions to use when calling FSBOs. The key is to reinforce their decision, while also keeping them engaged (i.e. keeping them on the phone) in order to build trust and confidence that you can be the right partner if, or when, they decide to un-FSBO! But the overarching theme supporting these questions is that you want to help, you want to contribute to their ultimate goal of selling their home with as little hassle as possible, and for the greatest profit.
Are you willing to pay a commission if an agent brings you a buyer?
This is one of the few yes/no questions you’ll ask, and knowing the likely answer is “yes,” it leads to the more important follow-up: “Can I come by to see your property?” You may get push-back, but it’s worth staying the course because unless you know the home, it’s difficult to find the right buyer.
What will you do when you sell your home?
This question gets you into a discussion of their goals and dreams, allowing you to learn more about your prospect and build a small amount of intimacy.
If you don’t sell your home in X weeks, are you open to interviewing an agent?
Most FSBO sellers believe they can sell their property quickly (especially in a competitive market). So, this question plants the seed that it’s not as easy as they might think. Plus, the wording (open to interviewing an agent) is less threatening because you’re not asking if they’d be willing to interview YOU.
What’s the biggest advantage to you selling on your own?
Their obvious answer will be “to make more by saving the commission.” Of course, you acknowledge that decision: “That decision makes a lot of sense, because it’s a lot of money.” You probably want to then remind them that if an agent brings a buyer, they’ll have to pay as much as 3 percent to that agent. You may also keep the conversation going with a related question, such as: “How will the buyer benefit by working directly with you?”
Would you be open to having me come to see your home next week?
You broached this in the first question above, but if you didn’t get a positive response, you might want to push a little harder, by outlining some of the ways in which seeing their property could bring value:
- “Again, I might have a buyer, so it helps to know your property.”
- “I can help you find a place locally, or refer you to an agent if you’re moving out of town.”
- I can share some free advice about how to stage your open house, improving your home’s curb appeal, etc.”
Tell me about how your new home will differ from your current home?
Here the goal is simple: if you haven’t gotten very far with the previous questions, this is simply a conversation-extender. Keep it going, keep engaged. “What’s important about a bigger back yard?”
If you could net an extra X thousand dollars, would you be open to having me as your agent?
If you’ve been successful at keeping the conversation moving along, and the homeowner seems comfortable with you, this is your opportunity for a hard-sell. Even if you’re just planting the seed for that moment when the FSBO seller decides they’d prefer to work with a professional.
Remember the statistic we shared above: 7 out of 10 FSBO sellers who make the decision to work with a professional will end up working with the first agent they’ve met. With Vulcan 7 at the ready, you have an excellent opportunity to connect with FSBO sellers, built rapport, and position yourself as he go-to agent when they’re ready to make the leap.