House for rent

The Revenue Potential of an Absentee Owner Script

 In a September, 2022 post on his blog, real estate coaching guru Mike Ferry said this:

“You should be talking to four to five different sources each day. The new Expireds and For Sale by Owners, your Centers of Influence and Past Clients, absentee owners, old Expireds and old FSBOs and then some Just Listed Just Sold calls. It’s just a quality over quantity game.”

Over the years, we’ve written extensively about many of these revenue sources, especially expired listing leads and FSBOs. In today’s post, we’re going to take a deep dive into a source of revenue that is often overlooked by most agents, especially those who are newer to our industry: ABSENTEE OWNER.

WHAT IS AN ABSENTEE OWNER?

Also known as For Rent by Owner (FRBO), absentee ownership refers to the ownership of a property by someone who does not live at that property, and is not present on a daily basis. An absentee owner can be an individual or company that purchases a property as an investment and either rents it out or leaves it unoccupied.

Absentee ownership can take various forms, including:

  • Short-term rentals (i.e. multi-unit property OR single-family Airbnb)
  • Longer-term rentals (typically a single-family home)
  • Vacation properties (out-of-town)

For those intrigued by the idea of being an absentee homeowner, there are two reasons to consider jumping into the market:

  1. A rental property provides a steady flow of income. If the owner is lucky, they offset all or a significant portion of their monthly property ownership costs through the rental payment.
  2. Even with the recent cooling in the real estate market, property prices tend to appreciate over time. So, the longer an owner holds on to a rental property, the greater the likelihood they can sell and turn a nice profit.

PROSPECTING FRBOs WITH VULCAN7

So, what does obtaining an absentee owner list mean for your prospecting strategy? Consider the following:

  • FRBOs are opportunistic. Many have multiple properties, and, as such, are likely to have multiple transactions in the future. They may want to sell a property NOW instead of renting for various reasons.
  • Most FRBOs are interested in expanding their portfolio, so they’re always in the hunt for new properties. If you’re not currently working with FRBOs, consider adding 6-8 investors to your portfolio. It will pay huge dividends in the long-run.
  • At some point, you may want to bring up the idea of selling and exchanging, through IRS Code 1031, otherwise known as a Like-Kind Exchange.  Here is how it works:

Like-kind exchanges — when you exchange real property used for business or held as an investment solely for other business or investment property that is the same type or “like-kind” — have long been permitted under the Internal Revenue Code.  Generally, if you make a like-kind exchange, you are not required to recognize a gain or loss under Internal Revenue Code Section 1031. If, as part of the exchange, you also receive other (not like-kind) property or money, you must recognize a gain to the extent of the other property and money received. You can’t recognize a loss.

When it comes to building your absentee owner list, remember: Vulcan7 offers FRBO leads at no additional charge! Of the three, major pools of FRBO investors, Vulcan7 pulls owner contact information for the top two below:

  1. Individual investors who run their own ads
  2. Investors who own properties but use the services of a property management company to market and show the property
  3. Real estate agents who own their own rental properties.

As you can see from the screenshot below, Vulcan7’s robust Neighborhood Search filters allows agents to build absentee homeowners lists by filtering for “non-owner occupied” contacts:

Likely to list screenshot

ABSENTEE OWNER SCRIPTS

The absentee owner/FRBO lead generation process is no different than working with any other potential prospect: you are building relationships. Many agents choose the more passive approach of sending an absentee owner letter.

But regular readers of this blog know that Vulcan7 is dogged in its belief that working the phones (i.e. active prospecting) is the best way to engage and build rapport with homeowners.

To that end, we’d like to tap into the prospecting wisdom of two of our long-term partners, Brandon Mulrenin and Mike Ferry. Below, each shares an example of an absentee owner script that has shown to deliver positive results for their agent clients.

BRANDON MULRENIN: CEO OF REVERSESELLING.COM

Brandon mulrenin

Brandon uses different scripts for FRBO and Absentees. As you can see, they are similar, with a few differentiating tweaks.

FRBO SCRIPT

  1. Hi (Name)?
  2. This is Brandon, I’m a local Realtor and I’m not sure now’s the right time, but I was hoping to tell you why I was calling and then you can decide if we should continue or not, fair enough?
  3. Ok great! I’m calling about the home for rent on Main St. and was curious with the market so high right now if you’d consider selling the home if the numbers made sense?
  4. Great, well what I’d like to do and I really don’t mind is do a price analysis on the property, email you the results and if the numbers make sense, we can talk about possibly getting together to discuss a plan to get the property sold, sound fair?
  5. Perfect, what’s the best email for you typically?
  6. Great, I just have a few questions about the property so I can be as accurate as possible with the analysis without seeing the home:
  7. Any major updates that would impact the value of the property?
  8. Finished basement?
  9. Garage?
  10. Let me get to work on the analysis and I’ll circle back with you this afternoon or this evening, fair enough?

ABSENTEE OWNER SCRIPT

  1. Hi (Name)?
  2. This is Brandon, I’m a local Realtor and I’m not sure now’s the right time, but I was hoping to tell you why I was calling and then you can decide if we should continue or not, fair enough?
  3. Great! I’m calling about the home on Main St., are you still the owner?
  4. Ok great! I was curious if you would consider selling that property while the market is so high?
  5. Great, well what I’d like to do and I really don’t mind, is do a price analysis on the property, email you the results and if the numbers make sense, we can talk about possibly getting together to discuss a plan to get the property sold, sound fair?
  6. Perfect, what’s the best email for you typically?
  7. Great, I just have a few questions about the property so I can be as accurate as possible with the analysis without seeing the home:
  8. Any major updates that would impact the value of the property?
  9. Finished basement?
  10. Garage?
  11. Let me get to work on the analysis and I’ll circle back with you this afternoon or this evening, fair enough?

MIKE FERRY. MIKE FERRY REAL ESTATE COACHING

Mike Ferry

 

Hi, my name is __________ with __________. I am calling about your property on __________ (address).

And I was wondering … When do you plan on selling that property? (Never) Terrific

  1. How long have you owned the property? (Really)
  2. I’m curious, how did you happen to purchase an investment in this area? (Interesting)
  3. If you ever were to sell when would that be? (Great)

(Only go forward if they say 3 months or less)

  • Did you realize it could take 1 to 3 months in this market to get a property sold … did you know that? (No) Excellent
  • Fortunately, … to get the property sold and closed … all we need to do now … is simply set an appointment … so I can help you get what you want … in the time you want … won’t that be great? (Fantastic.)
  • (If out of town client over the phone listing appointment would be scheduled for after the prelisting package including CMA, Completed Net Sheet and Contract has arrived at their home)
  1. Are you interested in purchasing any other investment properties in this area? (Terrific)

***If client says not sure if they want to sell, that it depends on CMA or that they need to talk to CPA first ask …

“If the CMA indicates a price that is acceptable to you /or if your CPA approves of the sale, are you ready to list the property right away?”

(If the answer is no, then tell them to call you when closer to being ready to sell so that CMA will be accurate. Then throw them away, don’t waste your time.)

(If the answer is yes – “would you be willing to interview me for the job of selling the property?”)

DO YOU HAVE A FOLLOW-UP SYSTEM?

When phone prospecting FRBOs/Absentee Owners, it’s likely you may be faced with the “reflexive no.” The prospect may not be getting calls from real estate agents, so their knee-jerk response might be to say “not interested” or “I’m not interested in selling.”

If you get a reflexive no, always remember to STICK WITH IT!! Most agents are finished at the reflexive no. But more than 80% of leads will come to those agents who work through the no by being persistent and asking great open-ended questions.

Agents don’t always get any action on the initial call, so it’s critical for agents to have a follow-up system to stay engaged with the prospect. One of the benefits of working with Vulcan7 is you’ll have access to one of the best CRMs around, allowing you to stay focused and organized in your follow up efforts.

CLICK HERE to learn more about Vulcan7’s best-in-class, purposeful lead generation system.

 

Doug Spak has over four decades of experience as an advertising copywriter, agency creative director, blogger, and content creator. He joined Vulcan7 as a Content Specialist in 2016. In addition to ongoing website copy refreshes, Doug has produced over 300 blog posts while developing content for Vulcan7’s social media platforms.

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