Plan to take a patient approach to FSBOs. Keep in mind that there is nothing you can do or say, short of offering to give away your services, that will hasten the homeowners’ decision to abandon the idea of selling their own home. You’re basically playing a waiting game that you can’t win quickly, but can lose, quickly, if you’re aggressive or pushy.
Agents who are full of hyperbole about themselves and their service, or who try to tell owners that FSBOs don’t sell themselves, are on the wrong track. Owners don’t want someone to make them feel like idiots for trying to sell on their own, even if they might be!
The best approach is to re-brand your sales pitch and improve your emphasis on service. Focus on helping the owners in their endeavor, always encouraging them and wishing them success.
Organizing your plan of attack
If you work in a large geographic area, expect to find many FSBOs. The easiest way to organize opportunities is to track each house by the phone number of the owners. Owners will change their listings and selling prices, but rarely will they change their phone numbers, so by filing each home with your phone number, you’ll eliminate the risk of duplication.
I kept a master sheet for each FSBO prospect to which I attached clippings from all the ads the owner had posted. Whenever possible, I called vendors and talked to them about their ads, suggesting how they could improve their effectiveness. Then I looked at the reviews. When they implemented the changes I suggested, the update indicated that I had built a level of trust with the prospect and the likelihood of an interview was starting to skyrocket.
Target your prospects
When targeting conversion to FSBO, use the following selection criteria:
o Clear motivation to sell
o A short sale time frame
o A specific place they need to be by a certain date
o The ability to sell at fair market value with a commission
o A high-demand home in a high-demand neighborhood
o Homeowners who do not have a best friend or relative who is a real estate agent
The best approach is to create a top 10, top 20, or even top 30 list. If you try to work much beyond the 30 FSBOs, the service becomes a very difficult proposition. If you search for the top 30 FSBOS, knowing that 80%, or 24 of the 30, are likely to show up in the next 60 days, then you have a solid 24 prospects, or about 12 per month.
If you provide sound advice, advice, service and care, you can get half of those 12 to interview you. Depending on your interview skills, you can turn two to five into listings each month. Think about it: a business source that generates five listings a month is a great solid business source. And even if you deliver just two a month, you generate 24 listings a year. Nothing bad!
Defining your territory
Limit your efforts to a concise geographic area that allows you to go through FSBOs and see owners as often as once every two weeks, if applicable. When the time comes for them to become a list of agents, they will have a harder time turning you down or choosing not to interview you if they have met you personally.
Remember, all you’re trying to do is get a commitment that if the homeowners decide to turn the job of selling their home over to an agent, they’ll interview you for the job. That is all!
making contact
Making initial contact with FSBO homeowners is the most difficult step for most agents, so I recommend that you make calls as soon as you see a FSBO come on the market. I have had coaching clients who would buy the Sunday paper on a Saturday afternoon just to get the FSBO classifieds so they could call new listing owners for a professional chat before the flood of calls from other agents started pouring in.
By being the first to make a call over the weekend, before other agents made their calls the next business day, my clients found the owners more open to dialogue. They also found it easier to distinguish themselves when they were the first to communicate, rather than after 50 other agents had placed calls.
Another benefit of calling FSBO owners early on Saturday or Sunday is that it frees up their afternoons to visit some FSBO open houses. Meeting owners face-to-face in their own homes presents an effective way to establish contact. The owners will surely be at home, expecting visits and are ready to get in touch and discuss the sale of their house.
Put the mailman to work
Due to the four to five week sales cycle involved in converting a FSBO to a listing, you can use banner ads more effectively with FSBOS than when it comes to expired listings. By mailing helpful articles once or twice a week, you give yourself a reason to make regular follow-up phone calls.
Then, after each face-to-face or phone contact, follow up with a handwritten thank you note. Remember, homeowners receive mail from many other real estate agents. One way to avoid the round file is to personalize your notes with handwritten outside addresses.
Also, use your banner ads to send useful information that sellers may need. Too often, agents act as adversaries to FSBO sellers. Take a different and better approach by helping them. Most have no idea what they really need to do to complete the sale. If they get helpful advice from you every five days, say, when it’s time to sign over your house to a real estate agent, they’re more likely to think favorably of your interview invitation.
For example:
1. Send homeowners a property disclosure form and information on disclosure laws, including how the law affects the value and sale of their home. Buyers can back out even at the last minute if they don’t handle this detail correctly.
2. Submit a sample purchase and sale contract and perhaps a counter offer form, along with an explanation that nothing is ever agreed upon in the first contract.
3. Send owners of older homes a lead-based paint disclosure form to give to the buyer if the home is suitable.
4. Have your lender prepare a financing sheet for homeowners to give to the buyer.
5. Submit many other items to service FSBO sellers and build a connection, including:
o Example of net income sheet
o Sample tour form
o Updated market analysis of comparable properties
o Sample brochure or photos of owners home
o Guest registry to use at exhibits
o Lead tracking form to record information about the people who call about the house
o A list of homes that meet the needs of homeowners looking to purchase a new home in the area.
o Free report on the sale of your home.
Free reports are an effective device because they allow owners to educate themselves and increase their chance of success while also positioning you as an expert. By submitting these reports, you establish yourself as a strong resource who is there to help them succeed. Then when they don’t, you’ll be there to pick up the pieces and list and sell your home.
As you prepare to submit free reports, consider headlines like: “Selling Your Home Yourself For The Highest Price Possible” or “The Seven Mistakes Most For Sale By Owners Homeowners Make That Cost Them Thousands In Their Home Price”. sale”.
Marking for dollars
As you work with your high-priority FSBO homeowners, check in by phone or in person at least twice a week. Use these communications to see how sales activity has been, if an open house is scheduled for the weekend, if they received your last mailing, and if they sold the house.
One caveat: Some FSBOs sell themselves, but there’s a big difference between selling a house and closing it. Just because homeowners made a sale doesn’t mean they’re going to get their money. The quality of buyers who buy FSBOs is lower than those who buy homes listed on the MLS. For this reason, when FSBO sellers report that they sold their home, keep following up. A lot of these sales fall apart before closing. When that happens, sellers who thought they were downhill wave a white flag and call a real estate agent. Make sure you stay in touch when that frustrating moment comes.