13 Jul Q: What are some For Sale By Owner (FSBO) strategies?
Homeowners that choose not to hire a selling agent, but rather attempt to market their property on their own, are referred to as For Sale By Owners (FSBOs). Though there are several reasons for why they may decide on this path, the primary motivation usually stems from a desire not to pay broker fees. Sellers often don’t understand the value that you present as an agent, nor what is involved with trying to sell on their own. Thus, before you approach a FSBO and ask them to hire you, it is absolutely critical that you understand the value and worth you present as an agent.
When you start the process of trying to solicit the business of For Sale By Owners, try to meet as many of them as possible. Since you will find that you will receive the same questions, objections, and frustrations from most, recognizing the common pitfalls of the practice will enable you to better relate and appear authoritative.
The simple fact is that we are in a problem-solving business, so if you can’t solve their problems, you should not be trying to get them as clients. After meeting several FSBOs, you will learn how to better handle them and how to identify aspects that motivate them to sell. From there, you will narrow your focus from every FSBO to meeting only those who are in a position to likely list. Identifying the “sweet spot,” or the time in which the FSBO is most likely to hire an agent, will lead you down the path to success. Sellers are more likely to hire someone that they have recently met than a relative unknown, so needless to say, timing is critical.
If you devote your full attention to prospecting FSBOs and setting appointments, you should be able to go on two listing appointments per day. After you have gone on 15-20 appointments, you will be able to anticipate much of what will be said at your meetings, leading to very few breaks in speech for you to consider variables. It will be at this point that you will have gained confidence and will able to speak from a point of authority.
You will notice that all the first FSBOs you met have decided to list with other brokers. You will realize that it is incredibly difficult to sell as a FSBO. FSBOs will now appear to you as leads that require care and attention, with the potential result being solid business and a nice amount of money for quality work!
Perhaps most importantly, however, you will find yourself competing against similar agents time and time again. Instead of wallowing in disappointment every time you don’t get a listing, simply ask the owner why they hired another broker. This feedback will enable you to improve and allow you to open your eyes to the good that can come from a rejection. The entire experience of finding a FSBO, contacting them, setting an appointment, preparing comparable market analysis, and crafting a pitch will have taught you a lot. Every time I listed a FSBO, or lost the listing to another agent, I felt wiser regardless of the outcome. There were times when I was absolutely confident that I was getting the listing, only to find out that another broker was hired at the last minute. Other times, I was adamant about the owners never hiring me, only to find that they signed without reservation. With each experience you will better learn the strategic, commanding, and romantic experience of the FSBO Prospecting Dance.
Review the following list and keep it in mind while prospecting For Sale By Owners. When you start calling FSBOs, here are some of the things you will need to do:
1. HAVE A GOAL ON EVERY CALL: Every time you pick up the phone or send an email to a FSBO, have a specific goal in mind. Whether you want to learn more about the apartment, determine the motivation of the owner, or set an appointment, goals are key to remaining focused and productive.
2. ASK THE RIGHT QUESTIONS: Role play asking questions from scripts and ask open-ended questions to get the owner to speak. The more the seller talks, the better it will be.
3. ACQUIRE INFORMATION: Identify any missing info in the FSBO advertisement, such as names, contact info, or property details, and directly ask for it.
4. SPEAK DIRECTLY: If you call a FSBO based on an advertisement, don’t leave a voicemail on the first try. Attempt to call at three different times of the day, and if you still don’t get them on the phone, a voicemail is acceptable. Example: “Hi ___, this is Michael. I saw your property on ___ and I had a few questions. Please call me back at xxx-xxx-xxxx.
5. OFFER A COMPLIMENT: When you call a FSBO, mention and ask about something that looks nice in the advertisement photos. Owners will appreciate that you fancy their apartment and will be more keen to speak to you when it appears you see value in their apartment.
6. INSPIRE HOPE: When talking to a FSBO on the phone, state something along the lines of, “I think buyers will really love this space.”
7. ESTABLISH A TIME FRAME: If a FSBO is not looking to work with a broker, ask them, “When in the future will you consider working with a real estate broker?” If they say, “We want to try marketing the apartment on our own, and if unsuccessful, we will work with a broker,” take note of their time frame and continue to ask questions about the unit to promote conversation.
8. AFFIRM STATEMENTS: When speaking with a FSBO, repeat and reaffirm what they say by mimicking the cadence and intonation by which the speak. For example, if someone says to you in a low tone that “my apartment has southern exposure,” you should respond in a similar low tone, “Great, so your apartment has southern exposure, Does it receive a lot of direct sunlight?” This shows the seller that you are listening to what they are saying.
9. PROVIDE VALUE: When it is the right time, you might explain to the seller that you can assist them in earning more than they can get themselves.
10. GET THE OWNER TO SPEAK AS MUCH AS POSSIBLE: You might quickly raise numerous questions in the beginning of a conversation to keep the individual from hanging up. If it seems like the seller is about to hang up, you might quickly say, “Can I ask you a couple of brief questions?” The goal is to get the owner to talk as much as possible by listening and making inquiries.
11. OFFER A TASTE OF INSIDER INFORMATION: If a FSBO makes a statement like, “I know a broker in the building who we might hire,” you should reply with, “The broker in your building will bring his buyer regardless of who you hire. We share our commission when other brokers bring buyers. A broker like me will not only market your property to that one broker, but to resident brokers in other buildings as well. Does that makes sense?” If they reply “yes,” then you should continue with, “I promise not to waste your time. At the end of our meeting, you will have learned information that you can use when marketing your apartment, or, at the very least, understand key questions and tasks to present to the broker you hire. Are you available on Monday at 2 PM or Wednesday at 5 PM?”
12. ALWAYS ASK FOR CONTACT INFORMATION: Even if the advertisement has an email address listed, act as if you don’t already have it. By asking for it directly, you might receive an alternate email address or a more direct line of contact. Often, a FSBO’s main email address is not the same one they use for their ad, thus if you get their primary email, you will have a greater chance of continued contact and being remembered.
13. BE ORGANIZED: When prospecting FSBOs, it is critical that you stay organized. There is a variety of software that you can use to keep contacts in order. Though there were not as many tools available when I started in the business, I had a binder in which I separated days by tabs. At the front of the binder was where I stored the ads I had printed out, each one complete with handwritten notes. The information included alternate email addresses, phone numbers, learned personal information, answers to questions I had asked, and my best guess as to when they would be most motivated to hire an agent. Once I had spoken with them, I would move the listing into the appropriate date/tab for when I wanted to call them back, and would move it accordingly until we met in person. As technology developed, I started using programs like RED-X and others to be more efficient. Your personal preferences will dictate the system that will work best for you.