Plan to take a patient approach to FSBOs. Realize that there is nothing you can do or say – short of offering to give your services away – that will rush the owners‘ decision to abandon the idea of selling their own home. Basically, you’re playing a waiting game that you can’t win in a hurry, but that you can loose, quickly, if you’re pushy or confrontational.
Agents who are filled with hyperbole about themselves and their service, or who try to tell owners that FSBOs fail to sell themselves, take the wrong tack. Owners don’t want someone to make them feel like idiots for trying to sell on their own – even if they may be!
The best approach is to dial back your sales pitch and enhance your emphasis on service. Focus on helping the owners in their effort, always encouraging them and wishing their success.
Organizing your plan of attack
If you work a large geographic area, expect to encounter a great many FSBOs. The easiest way to organize the opportunities is to track each home by the owners‘ phone number. Owners will change their ads and their asking prices, but they’ll rarely change their phone numbers and so by filing each home under its phone number you’ll eliminate the risk of duplications.
I kept a lead sheet for each FSBO prospect to which I attached clippings of all ads the owner had run. Whenever possible, I called the sellers and talked with them about their ads, making suggestions regarding how they might improve effectiveness. Then I’d watch for revisions. When they implemented changes I’d suggested, the update indicated that I had built a level of trust with the prospect and that the likelihood of an interview was beginning to skyrocket.
Targeting your prospects
In targeting FSBOs for conversion, use the following selection criteria:
o Clear motivation to sell
o A short selling time frame
o A specific place they need to be by a certain date
o The capacity to sell at fair market value with a commission
o A high-demand home in a high-demand neighborhood
o Owners who don’t have a best friend, or relative that 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 30 FSBOs service becomes a very difficult proposition. If you pursue the best 30 FSBOS, knowing that 80% – or 24 of the 30 ¬- are likely to list in the next 60 days, then you have 24 solid prospects, or about 12 a month.
If you provide solid advice, counsel, service, and care, you can get half of those 12 to interview with you. Depending on your skill in the interview, you could convert anywhere from two to five into listings each month. Think about it: A business source that generates five listings a month is a great solid source of business. And even if it delivers only two a month it leads to 24 listings a year. Not bad!
Defining your territory
Confine your efforts to a concise geographic area that allows you to stop by the FSBOs and see the owners as regularly as once every two weeks if appropriate. When it comes time for them to convert to an agent listing, they’ll find it harder to reject you or choose not to interview you if they have met and know you personally.
Remember, all you’re trying to do is gain a commitment that if and when the owners decide to turn the job of selling their home over to an agent, that they will interview you for the job. That’s it!
Making initial contact with owners of FSBO homes is the toughest step for most agents, so I recommend that you make calls just as soon as you see a FSBO come onto the market. I’ve had coaching clients who would buy the Sunday paper on Saturday afternoon just to get the FSBO classifieds so they could call owners of new listings to have a professional conversation before the onslaught of calls from other agents began to come through.
By being the first to place a call over the weekend, before other agents made their calls on the next workday, my clients found owners more open to dialogue. They also found it easier to distinguish themselves when they were the first to get through, rather than after 50 other agents had placed calls.
Another benefit to calling FSBO owners early on Saturday or Sunday is that you leave your afternoons free to drop into some FSBO open houses. Meeting owners face-to-face in their own homes presents an effective way to establish contact. The owners sure to be home, they’re expecting visitors, and they’re ready to make contact and discuss the sale of their home.
Putting the postman to work
Due to the four to five week sales cycle involved in converting a FSBO to a listing, you can use mailers more effectively with FSBOS than you can when dealing with expired listings. By mailing helpful items once or twice a week, you give yourself a reason to make follow-up phone calls on a regular basis.
Then, after every face-to-face or phone contact, follow up with a hand-written thank you note. Remember, the owners are getting mail from many other real estate agents. One way to avoid the round file is to personalize your notes with hand-written exterior addresses.
Also, use your mailers to send useful information that the sellers might need. Too often, agents act like adversaries of FSBO sellers. Take a different and better approach by helping them out. Most have no idea what they really need to do in order to complete the sale. If they receive helpful advice from you every five days, for example, when it comes time to sign their home over to a listing agent they are more likely to think favorably of your interview invitation.
1. Send the owners 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 properly.
2. Send a sample purchase and sale contract and maybe a counter offer form, along with the explanation that nothing ever gets 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 if appropriate.
4. Get your lender to prepare a financing sheet for the owners to give to the buyer.
5. Send numerous other items to service FSBO sellers and create a connection, including:
o Sample net revenue sheet
o Sample of a walk through form
o Updated market analysis of comparable properties
o Sample brochure or photos of the owners‘ home
o Guest register for use at showings
o Lead tracking form to log information on people who call about the home
o A list of homes that would meet the owners‘ needs if they are looking to purchase a new home in the area.
o Free report about selling their home.
Free reports are an effective device because they enable owners to educate themselves and increase their likelihood of success while simultaneously positioning you as the expert. By sending these reports you establish yourself as a strong resource that is there to help them succeed. Then, when they don’t, you’ll be there to pick up the pieces and list and sell their home.
As you prepare to send free reports, consider such titles as: „Selling your home yourself for the highest possible price“ or „The seven mistakes most For Sale By Owners make that cost them thousands in their sales price.“
Dialing for dollars
As you work your high-priority FSBO homeowners, make phone or in-person contact at least twice a week. Use these communications to see how sales activity has been, whether a weekend open house is scheduled, whether they received your latest mailing, and whether they got the home sold.
A word of caution: A portion of FSBOs sell on their own, but there is a big difference between getting a home sold and getting it closed. The fact that the owners achieved a sale doesn’t mean that they’ll get their money. The quality of buyers that shop FSBOs is lower than that of those who shop homes listed in the MLS. For this reason, when FSBO sellers report that they’ve sold their home, keep following up. A large number of these sales fall apart before closing. When that happens, sellers who thought they were on the downhill slope wave a white flag and call in a real estate agent. Make sure that you are still in touch when that moment of frustration arrives.
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