Tips for Success with FSBOs

Anyone who’s been in real estate sales for any 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 desktops daily.

UNDERSTANDING THE FSBO MARKET

FSBO Facts Worth Knowing

According to the NAR:

• Lower sales prices. FSBO homes, on average, sell for about $100,000 less compared to those sold with a realtor’s help. This significant difference highlights the potential cost of bypassing professional assistance.
• A shrinking FSBO market. The FSBO market share hit an all-time low of 7% in 2023, suggesting a declining preference or success rate for this selling method.
• Buyer familiarity matters. FSBO does have its place, particularly when sellers already have a buyer in mind. In fact, around half of all FSBO sellers had a buyer lined up in 2023.

FSBO methods used to market home:

• Friends, relatives, or neighbors: 20%
• Yard sign: 19%
• Third party aggregator: 14%
• Social networking websites: n/a
• For-sale-by-owner website: 5%
• Open house: 7%
• Online classified ads: 4%
• Multiple Listing Service (MLS) Website: 5%
• Other website with real estate listings: 1%
• Video hosting websites: 1%

Most difficult tasks for FSBO sellers:

• Preparing/fixing up home for sale: 4%
• Getting the right price: 15%
• Understanding and performing paperwork: 7%
• Selling within the planned length of time: 7%
• Having enough time to devote to all aspects of the sale: 4%
• Attracting potential buyers: 4%
• Helping buyers obtain financing: 5%

Source: 2023 Profile of Home Buyers and Sellers (National Association of REALTORS®)

WORKING WITH FSBOs

Approaches Tied to Your Level of Experience

We’ve previously written about how to maximize your opportunities with FSBOs in this blog. Today’s post focuses on some of the basics of prospecting FSBOs, whether you’re relatively new to the industry or have been selling homes for years.

EXPERIENCED AGENTS

What 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.
• Take 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 feelings 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 like 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 their own conclusion that selling on their own was not such a great idea.
• Don’t force the process. Experienced agents know the right, open-ended questions can uncover the homeowner’s motivation. When the FSBO says, “I’m doing 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?”

NEWER AGENTS

If you’re relatively new to real estate and/or fine-tuning your prospecting approach, it’s important to remember that  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 slightly angry. They’ll be getting calls from many agents, all with 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, believing they will save lots of money by selling independently. They might be friendlier and open to dialogue because they haven’t had enough time to get frustrated at the process. Here are a couple of pointers for newer agents:

• Minimize the hard sell: Be persistent in your follow-up but know that you should not sell. Selling can be interpreted as 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 more accessible to talk to, you might assume getting a listing from them will be easier. 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 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

FINAL OBSERVATIONS ON FSBOs

How to Improve Your Prospecting Opportunities with FSBOs

Regardless of your experience level, here are a few closing tips that might improve your chances of being the agent of choice when they’ve come to the conclusion that selling their own is too much work:

• Understand an FSBO’s mindset: A 2013 study conducted by Choice Home Warranty and reported in the LA Times suggested that more than 2/3 of Americans distrust real estate agents. This means, in essence, that any conversation with an 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 independently to save on the commission. Affirm their decision to build trust. “I do not doubt that you can sell on your own.” Don’t jump in by selling them, believing you can save them money. Build your relationship with a FSBO, while allowing them time to see what it’s like to sell independently. 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 you are 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 essential. Concerning 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 and home inspectors.
  • 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!”

VULCAN7 EMPOWERS SUCCESS WITH FSBOs

Invest in Your Success

Vulcan7 is widely regarded as the leading resource for superior, proven FSBO Leads. And while FSBO is an acronym for For Sale by Owner, savvy agents also know it can stand for Fastest Single Business Opportunity.

CONTACT US to learn how to leverage Vulcan7’s proven system into your Fastest Single Business Opportunity.

Doug Spak

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.