FSBOs are often a sore spot for many real estate agents. For a homeowner to assume that the work of a real estate agent is easy enough and more efficient to do on their own, much for the sake of saving on commissions, may put some on the defensive. So are FSBOs worth calling? How should an agent go about doing so?
FSBOs are Not Your Foes
Properties that are listed as FSBO have not increased as some may assume, according to a recent report by the National Association of Realtors. However, they still happen in today’s real estate market. It’s important to gain some perspective prior to contacting FSBOs so that you put your best foot forward when calling on them.
What do we mean? Simply that a homeowner listing their own property may simply be uninformed about the process and the negotiations that need to take place for success. Homeowners that list their properties:
- Tend to focus too much on the savings in commission without using a real estate agent.
- Do not understand what the process entails.
- Lacks knowledge about the specific relationships that can lead them toward success.
- Underestimate the time it takes to list and maintain a successful listing for showings, for example.
So, yes, if you go into this mindset, it is absolutely imperative that you, as a real estate professional, contact FSBOs. Besides the benefit of a new client, you will be helping a homeowner save the time, headache and heartache of going at the real estate process solo.
Convincing Ways to Successfully Snag a FSBO
It’s clear that contacting FSBOs is something you should absolutely do, but that does not mean it will be easy!
Elizabeth Jenkins from Source Capital Funding, Inc., has some great advice for real estate agents to make the conversation go more smoothly and to increase your chances of turning FSBO prospects into actual clients.
- Offer to partner up. This foils the concept that many homeowners have that they will save money of commissions. Saying you will “partner” with them eases that transition in mindset so they feel that you are not just calling on them for the revenue. In addition, your partnering with the FSBO will give them more leverage with buying agents. Don’t forget – you have much to offer as an agent, so make that clear. Mention your contacts and resources, your access to errors and omissions insurance, good lawyers and more. These will be extremely helpful to the seller and increase your chance of becoming part of the sale.
- Have clients ready to see the property. During your “pitch” to become a partner, have a few clients ready to see the property. This not only shows preparation but clearly demonstrates from the start your commitment and value. Much more powerful than just mere words could ever be.
- Demonstrate the challenges of FSBO. First-time sellers are especially prone to making mistakes (and many of them) during the process that could cost them more money in the long run. When you call, ask what their pain points are and offer a solution. Anticipating what these pain points could be and having an answer prepared for each one can help strengthen your case.
Most importantly, use the conversation with an FSBO as an opportunity to help, not sell. People, especially cynical FSBOs, can see right through the sales pitch. The more solutions and advice you can provide, the more likely that FSBO will give up and ask you to take over.