Including For-Sale-by-Owner (FSBO) properties in your prospecting plan is smart. If nothing else, it’ll sharpen your skillset, as approaching and winning over FSBO listings requires knowledge, constancy, and finesse.
Owners attempting to sell their homes without the assistance of a professional typically underestimate the difficulties they face. For you, FSBOs present a unique set of challenges and opportunities. This article breaks down the FSBO prospecting process and offers practical strategies to turn these opportunities into wins.
Understanding FSBO Property Owners
Why do sellers decide to sell their property on their own? Generally, homeowners choose to sell their homes independently because they believe they will maximize profit; because they have been disappointed with agents in the past; or because they believe this route saves them commission fees. However, it also burdens them with all aspects of the sale process. Understanding these motivations and identifying how to offer value will allow you to address their concerns better.
What Sellers Attempting to Sell Their Home on Their Own Do Not Know
According to a 2023 NAR report, a recent survey by Clever Real Estate found that FSBO sales have a lower sales price, take longer, can be fraught with legal issues, and result in more stress than a transaction handled by a professional.
In 2022, only 7% of homes sold were sold by the owner. The same report states that the median price of FSBOs was $310,000 versus $405,000 for properties sold by a real estate professional. The survey went on to document that more than one-third of non-agent sellers learned that buyers distrusted them; that they needed to understand the contract and other document requirements fully; and that they made legal mistakes that would never have occurred had they had an agent.
Challenges and Opportunities for Agents
Pursuing FSBOs requires you to navigate the skepticism of sellers confident in their ability to sell independently. This skepticism, however, allows you to showcase the complexities of the sale process and how your expertise can lead to a more favorable outcome.
The challenge and opportunity lie in earning the seller’s trust by educating them and offering commitment-free support until the seller himself asks you to sell the home.
Effective Strategies for Prospecting FSBOs
1. Build Rapport and Earn Trust
Earning trust is vital when converting FSBO listings. To build trust with FSBO sellers, visit or call them weekly at the same time. Consistency is critical to developing trust. The seller needs to see or hear from you with clockwork regularity to accept that you are reliable.
2. FSBO Psychology
Every time you reach out, offer valuable market insights and a listening ear about their weekly experiences. Do not ask for the listing. Such dedication showcases your reliability, laying the groundwork for a successful partnership. While counterintuitive, telling the seller you will NEVER ask for the listing but that they should let you know if they want your help is also a superb strategy.
3. Provide Insights and Resources
On your weekly visits, ask the seller how many phone calls they’ve had, how many appointments they set, how many prospects showed up, and which ones were financially qualified. To be super helpful, you may want to
- give the seller a sheet to keep track of that data.
- provide the seller with market data and staging tips.
- discuss safety during showings.
- bring the seller a sheet of qualifying questions.
- provide a list of attorneys you have worked with.
In other words, become the owner’s go-to expert. This approach changes how sellers see your value and creates a mind shift, and it won’t be long before she asks you to sell their home.
The Value of Prospecting FSBOs
Working with FSBOs opens a segment eager for professional insight, potentially increasing deals and broadening the customer base. It highlights the ability to adapt to different market conditions, boosting the reputation as a skilled expert.
For sellers, choosing to partner with a professional after starting as an FSBO can significantly improve their selling experience, making it smoother and more effective. Knowledge of the market, negotiation skills, and marketing savvy can lead to faster sales and possibly higher prices, showcasing the value of teaming up with a professional.
In summary, targeting FSBOs is an excellent avenue for real estate professionals seeking to broaden service offerings and cater to a more diverse seller base. It is an excellent practice ground for newer agents and agents wishing to sharpen their emotional intelligence and NLP skills. Understanding FSBO motivations and adopting a tailored, empathetic approach can significantly enhance success rates.
Implementing the outlined strategies will make you a better professional, will train you to optimize conversion rates, and is consistent with fostering lasting relationships that fuel future business. A FSBO you win over is likely to be your most prominent advocate.
