FSBO Listings Can Be a Goldmine
Tips to turn "For Sale By Owner" (FSBO) property into a listing. By Patty McNease, Director of Marketing, Homes.com
To be successful as a REALTOR®, an agent needs to devote at least one hour of his or her day to prospecting.
That’s the philosophy of best-selling author, Jim Remley, founder of FSBOListingGuru.com, who lent his expertise in the recent Homes.com’s webinar, “FSBO Farming - Top Tips to Double Your Inventory.” In the informative webinar, Remley explores how a REALTOR® can change an FSBO property into his or her own listing and talks about the value of prospecting overall.
Let’s say you pull up to a FSBO and want to talk to the owners about how hiring an agent can make selling their home easier, but you’re not quite sure how to start. Remley offers tips on both what to say and how to say it to make a convincing argument and farm FSBO listings successfully.
Importance of Prospecting
A 25-year industry vet, Remley says the one question he gets asked most is how to build inventory. “Almost anywhere I go, there is an inventory shortage, and by doubling your inventory, you can get more comfortable in your business and produce results,” he says. “There’s nothing more powerful than setting aside an hour a day dedicated to prospecting, especially for new agents. If you don’t do this, you’re setting yourself up for failure.”
Remley warns about the downward spiral where agents start to anticipate failure and see their prospecting slowly decline over time. “We expect to fail when we prospect because we are not comfortable in the way we are prospecting,” he says. “I like to talk to brokers about the concept of a painless approach to prospecting. Flip and reverse the dilemma and think about if you were on the other side of the phone and someone approached you: what would you say ‘yes’ to?” Once you discover that, you’ll become more comfortable with your approach because you’ll believe in it, and that will lead to results.
According to an NAR study, the reason most people go the FSBO route is because they don’t want to pay a commission (49 percent). Other reasons are they planned to sell to a neighbor or friend (26 percent), the buyers contacted the seller directly (11 percent), or they already listed with another agent who was unsuccessful in selling the home (7 percent). It’s rare that they simply don’t want to work with an agent, as only 4 percent of sellers listed this as their primary reason. The study also showed that the makeup of a FSBO seller has a median age of 54, an income of $96,700, and 75 percent are married. However, it’s important to note that home sellers have realized that working with a REALTOR® can be beneficial. According to Remley, “In 1991, 19 percent of FSBO properties were on the market, compared to just 9 percent in 2014. The reason is that a real estate transaction has become more complicated and the complexities are so vast that they need a consultant to walk them through it.”
Remley says the most important thing is for a REALTOR® to believe in his or her own value. If you don’t believe sellers will be better off listing their home with you, neither will they. “The first person you have to sell is yourself. When you do that, prospecting becomes easier,” he says.
Remley gave eight reasons why a FSBO needs an agent’s expertise to sell their house, and suggested agents should bring them up when trying to convince someone to list their home with them. Chief among the reasons—and usually the one that makes a seller take action—is that an agent can sell a house for more money. “We offer the ability to put the home in front of hundreds and hundreds of REALTORS®, No. 1,” Remley says, “but also the channels of exposure (websites) plus virtual tours, great photography and the way we handle inquiries and calls can all lead to a better sale.”
Plus, because an agent does this full-time, understands how to complete the many contracts involved, and can price a home competitively, he or she is better at being objective. Additionally, Remley says, agents are more likely to close the deal, since they can better ascertain a buyer’s ability to afford the property and negotiate.
Of course, some FSBO sellers will counter that they can get on the MLS for around $500 today, but that doesn’t mean a REALTOR® will show the home. If they have a choice, REALTOR® s will almost always go with a home listed by another agent, since they know they will be doing twice the work otherwise.
The Final Say
Reaching out to a FSBO seller—by phone or email—is the first step. In an email, Remley highlights that you should uses phrases such as “I respect your decision to sell your own home” and ask if they would allow you to tour the home as you like to know what’s going on with every home in the market. This will lead to a tremendous response, he says.
The most important takeaway from the webinar is that more than 8 out of 10 FSBOs will end up listing their home with a REALTOR®. “If you never talk to them, it’s not going to be you,” Remley says. “It takes courage, but you need to be proactive for success.”
Be sure to come back to Homes.com on Wednesday, March 25 for its next webinar when Debra Trappen, “Chief of Sass, Moxie and Experience of d11 Consulting,” advises on how to define your personal brand and business goals in “Fire Up
Your Personal Brand.”
Reprinted with permission from RISMedia. ©2015. All rights reserved.