In this post, we review a few essential strategies to use when prospecting For Sale by Owner (FSBOs).
Let’s start with a few facts from the National Association of Realtors:
- It is estimated that FSBOs account for about 8% of all real estate transactions in the U.S.
- NAR also estimates that the typical FSBO home sells for between $215,000-$220,000. Agent-sold homes, on the other hand, fetch as much as $295,000, on average.
- The vast majority of FSBOs do not attempt to market their homes. Most often, FSBOs rely on a yard sign (25%) and word-of-mouth through friends, family and neighbors (22%)
- When queried on their biggest challenges, FSBOs site prepping their property for sale (12%), paperwork (10%) and getting the right price (9%).
Of course, 90% of the time, FSBOs eventually opt out of selling on their own, realizing the time and energy involved is not worth it in the long run. Here’s the critical thing to remember for any real estate agent: of those FSBOs who decide to work with an agent, about 70% will work with the first agent who contacts them. Therein lies the importance of actively prospecting FSBOs, especially with the support of VULCAN7, who delivers timely and accurate FSBO contact information to your desktop on a daily basis.
Many agents prefer prospecting FSBOs because it is much less competitive than calling newly expired listings. That’s because expireds tend to have a greater sense of urgency to sell, as well as a higher degree of frustration for not having sold during their initial listing. FSBOs typically do not have the same level of urgency as expireds, which means you need to be patient, and nuanced, as you approach these homeowners.
When prospecting FSBOs, you’ll want to remember several important points:
- Always reinforce their decision to sell on their own.
- Keep them engaged (i.e. on the phone) in order to build rapport, confidence and trust.
- Remind them that you are there to help them sell their home to achieve their goals.
In this light, here are questions you can use to guide your initial calls with a FSBO:
If I were to bring you a buyer, would you be open to paying a commission?
Typically, we try to avoid simple yes/no questions, but this is an exception. The prospect will likely answer “yes,” which opens the door to your follow-up: “Can I come by to see your property?” Even if the homeowner says no, stick with it a little longer, reinforcing the point that the more you know about their property, the easier it will be for you to identify the perfect buyer.
What do you plan to do after you sell your home?
By going down this path, you begin to build rapport by engaging the prospect in a discussion of their ultimate goals and dreams.
While I fully expect you to sell your home, if you’ve not had success after, say, four weeks, would you be open to interviewing a real estate professional?
This question affirms the homeowner’s belief that they should be able to sell on their own. But it also sets up the more likely reality that selling might not be as easy as they think. And subtly reminds them that you are the real estate professional they might consider when the time comes.
What do you think is the key advantage to selling on your own?
Most likely, they will reiterate the importance of making more money by saving on commission. Acknowledge their decision: “Yes, I clearly understand, because it’s a lot of money.” You’ll want to remind them that they will still have to pay the buyer’s agent a commission, which could be as much as 3%. Also, keep the conversation active by asking: “How will the buyer benefit by working directly with you?” This question forces the FSBO prospect to think about factors they may not have considered, such as the fact that buyers have many more options and, thus, more leverage.
Would you be open to having me come to see your home next week?
Even though you may have touched on this earlier in your conversation, it’s important to reinforce some of the ways in which seeing their property could bring them value:
- “The more familiar I am with your property, the more likely I am to bring you the right buyer.”
- “I’d be happy to share a bit of free advice that might help you sell your home more quickly. Like, how to help your home’s curb appeal, or how to maximize your open house.”
- “If your plan is to move out of the city, I can connect you with an agent wherever you intend to move.”
Tell me what you see as the key differences between your next home and your current home?
This is a simple conversation-extender, to keep your prospect engaged, and give you opportunities to learn more about their needs. For example: “What’s important about a bigger back yard?”
If I could show you how you could net an extra five thousand dollars, would you be open to hiring me as your agent?
Once you’ve established rapport, and hopefully some trust, with your FSBO prospect, you might have an opening to make the hard-sell. Again, this hard-sell might not work early in the FSBO process, but it plants an important seed that will hopefully blossom once the homeowner has experienced weeks of futility in their efforts to sell.
Remember, nearly 70% of FSBO homeowners ultimately decide to work with the first real estate agent they meet. With VULCAN7 at your fingertips, you’ll be uniquely positioned to tap into this potentially-lucrative market. But you’ll need to be patient, working to build rapport, trust and confidence with the homeowner, so that when they’re ready to throw in the towel on their own efforts, you’ll be the first, best agent on their list.