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Archive for FSBO Marketing

The Art of the Deal: Marketing to FSBOs

Marketing to FSBOs: Art of the Deal

When I see a FSBO sign in someone’s yard, I always feel a bit sorry for them. Not in a condescending way, simply because I know they are leaving money on the table. And because I know they are getting themselves in over their heads.

Homeowners don’t seem to understand everything it takes to close a deal. I think that represents a huge marketing opportunity as you reach out to FSBOs this summer. Letting a seller know who has to be involved in a home transaction and what it takes to make things go smoothly can really open their eyes.

First Part of the Deal: Time

Homeowners don’t realize how much time it really takes to market a home correctly. Simply placing it on the MLS is not enough to get a great offer. You have to take professional pictures, create marketing materials, and spread the word.

The value you bring as a Realtor® isn’t just your time and money. It’s also your network. You know other real estate agents who represent buyers. You know who you can contact to get great Just Listed and Just Sold postcards. You have connections on social media and through your website that can help you sell a home.

A homeowner doesn’t have these specialized connections. They also don’t have the time, money, and expertise it takes to market their own home effectively.

Second Part of the Deal: Negotiating

Do you know how to drive a hard bargain? Do you know exactly how to price a home to maximize the value to the homeowner? If you’re a Realtor®, your answer should be a resounding YES! But most homeowners cannot say the same.

Negotiating starts with setting the right price, which takes market knowledge and business skill. Then, you weed out the looky-loos and negotiate with serious buyers. Sometimes you need nerves of steel to stand your ground against an aggressive buyer’s agent.

Let’s be honest. People are afraid of negotiating over a car. Dealerships market themselves as “no haggle” to attract customers. What makes homeowners think they can handle negotiations on a house, which is worth 10 times as much, by themselves?

Of course, you can’t say things that way in your marketing outreach to a FSBO, but you can point out that negotiating is hard on small things. It’s even more difficult when hundreds of thousands of dollars are at stake. A buyer’s agent won’t respect a FSBO and may take advantage of them. Having a Realtor® on the seller’s side offers protection.

Third Part of the Deal: People & Paperwork

Remember when I mentioned how much your network is worth? Your sales network is only half the story. The people you know that help you close the deal are equally valuable. As I mentioned in a previous post about the five people you should know, a great Realtor® is well-connected.

The connections you have with mortgage brokers, home inspectors, insurance agents, and escrow officers are extremely valuable to a seller. They almost certainly don’t know how to connect with high-quality professionals and may be in for a shock when an inexperienced inspector or escrow officer scuttles a deal.

Then, of course, there’s paperwork. The mountain of paperwork and disclosures required to sell a home would intimidate anyone, and it all has to be done right to protect the buyer and the seller. Without proper documents, a seller may be hit with extra fees or find themselves on the hook for post-sale repairs. Having a professional prepare and execute the closing documents is a huge relief for a seller.

You’re Worth More Than You Know

The next time you’re reaching out to a FSBO, look over all the value you bring to the table. Consider how much training, experience, and knowledge you bring to a transaction. You have mastered the art of the deal.

That poor FSBO doesn’t know what he or she is missing. But with the right marketing focused on the many services you provide, including time, negotiation, your network, and making the transaction go smoothly. How can a seller say no to that?

If you’re ready to reach out to FSBOs in your area, let us help. We have a variety of FSBO marketing postcards that can help you connect. Check them out today!

Handling Objections From an FSBO

For Sale By Owner Objections

There’s a reason FSBO (For Sale by Owner) home sales have dropped from 19% to 8% over the last 20 years. It’s often not worth it to sellers.

But there are still those stubborn few who think they can save time, money or hassle by selling their own home. It’s your job to show them the many flaws in that plan.

So let’s examine a few common things your typical FSBO seller will tell you, and how to handle their objection.

For Sale By Owner Seller Says: “This Will Save Me Money”

They assume that your only function is to put your hand in their pocket and take a cut of the sale they could have had anyways.

This is, of course, wildly inaccurate and the numbers support this. The typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. So the seller’s net from the transaction is actually likely going to be much higher from working with a Realtor®.

For Sale By Owner Seller Says: “I Know What I’m Doing”

No, they likely don’t. Most FSBOers will assume they can just Google the required paperwork, print it off, fill it out, and they’re good to go. We both know how absurd that is.

There is a lot of negotiation and red tape that needs to be handled before you even get to the actual purchase. And they need an expert on their side to guide them at every step.

“You can expect lots of competition, cutthroat tactics, all-cash offers, and bidding wars. Don’t you want a savvy and professional negotiator on your side to seal the best deal for you?” wrote real estate blogger, Rachel Stults.

“And it’s not just about how much money you end up spending or netting. A Realtor® will help draw up a purchase agreement that allows enough time for inspections, contingencies, and anything else that’s crucial to your particular needs.”

You have likely saved people a lot of time and hassle during your career. Tell your FSBO sellers about these times, and use real world examples of how complex things can be.

For Sale By Owner Seller Says: “This House Sells Itself”

If a seller has a hot property that will likely move quickly, selling it themselves will likely leave money on the table by not getting the highest possible asking price for it.

“It’s not impossible to sell a home on your own, but you’ll find that buyers expect a substantial discount when you do, so what you save on a real estate commission may end up meaning a lower price,” wrote real estate and finance expert, Teresa Mears.

“It’s not impossible to sell your home on your own for the same price you’d get with an agent, but it’s not easy.”

For Sale By Owner Seller Says: “A Yard Sign and Newspaper Listing is Enough”

Again, this may make sense in their minds, but the data shows there is almost no truth to this theory.

When it comes to where buyers are looking for new homes, 44% look for houses on the internet and 33% use a Real Estate Agent. Only 9% use yard signs and 1% use the newspaper. So a FSBO seller is only exposed to roughly 10% of the buyers that could see their home if they worked with you.

The FSBO mentality will forever be one of your biggest competitors. There will always be be people who think they can make more money from a FSBO transaction, because they know what they’re doing and their house will sell itself via a simple yard sign. You know better! So always use anecdotes from your actual career to illustrate the many examples of the times you helped buyers make more money, and saved them a ton of time and heartache.

PS: As you get ready to market your new listings, don’t forget about flyers and postcards! You can customize your own design and have high quality marketing materials delivered to you quickly and easily! 

FSBO Lead Generation Tactics – FREE Download

FSBO Lead Generation TacticsWhen many sellers get ready to sell their homes, the first question many consider is, “Can I get away with not using a Realtor®?” With all of the For Sale By Owner (FSBO) websites popping up, it’s easy for a homeowner to think they can save money by listing the property themselves and not paying your commission. You and I know that’s simply not true and that homes sold by Realtors® sell for more and much faster, it’s been proven time and time again.

With lead generation being critical to the success of any real estate agent’s business, prospecting to FSBO’s offers an extremely targeted list of prospects/leads to target.  The key is showing the person who has decided to go FSBO that it is in their best interest to use your services.  Here’s some great objection handling information (which can be downloaded as a flyer…free) for you to use the next time you’re speaking with someone about the advantages of using a Realtor® vs. selling it themselves. It’s a no-brainer!



Buyer’s Commission
As a seller, you would still end up paying the buyer’s agent commission if you sell your own home. This means that your savings is not 6%, but rather 3%. That amounts to $7500 on a $250,000 house. While that may still sound like a significant amount of money, think about the amount of work you’ll do to get the word out. How much is your time worth? Realtors® really do earn their pay.

Listing Services
When you use an agent, they take care of listing your property. They do this not only locally, but also on the internet, where 90% of home buyers look before purchasing a home.

You can certainly list your own home online, but it isn’t free – sites with Multi-Listing Service (MLS) access charge anything from a $395 flat fee to $199 for a 6 month listing. And you want to make sure to hit all the major sites, free or paid. It’s the only way to make sure you are visible to all potential buyers and their agents.

A Realtor® will take care of all of these listings for you, so you don’t have to worry about which sites to use, how long they take to set up, or how much they cost.

Screening Buyers
When you use an agent, they receive all of the calls and weed out the ‘just curious’ lookers or others who would not be able to qualify to buy your house. When you list the home for sale on your own, you have to take ALL the calls and emails yourself. This is another serious time commitment. There’s nothing more frustrating than spending two weeks going back and forth with a potential buyer only to find out they never had financing.

An agent will have the experience to be able to tell right away if someone isn’t going to be able to complete a purchase. And, if a potential buyer does end up wasting their time, that’s part of what you’re paying them to handle. This way, you can spend time on your own commitments and let your agent handle the curious and the serious buyers.

There’s also the consideration of safety.  Most experienced Realtors® won’t work with buyers who aren’t pre-qualified and pre-screened by a mortgage broker. Getting pre-qualified requires showing proof of identification, financial background, a credit check, etc.  It’s good to avoid having complete strangers traipsing through your home with no record of who they are.

Buzz Creation
Real estate agents belong to a close-knit community and know how to build buzz about your property with other agents. In doing this, they are exposing your home to a market you wouldn’t have access to on your own. When a Realtor® can call up a professional contact and recommend they bring a client by, you have an immediate prospect that is actually ready to buy.

In addition, agents have a lot of experience setting up open houses and creating interest in their events. An agent isn’t going to want to waste time or money on an open house that isn’t attended, so they will put their network and advertising skills to good use on your behalf.

Price Setting
The key reason sellers choose to go on their own is to save money. Unfortunately, a real estate agent can offer significant expertise in setting a price-point for your property. They have experience in the area, so they know what price to ask for that will bring good value while also selling your property quickly.

Homeowners have the potential to fall off of both sides of the pricing wagon. Some homeowners love their house so much they price it inappropriately highly, resulting in it sitting on the market unsold for months. Others are unsure of themselves and need to move quickly, so they underprice their homes and cost themselves a lot more financially than they would have saved in commissions.

Ironically, the founder of ForSaleByOwner.com had to use an agent to sell his own home after he “mispriced” it and couldn’t sell it himself. Not only did he gain a lot of money in the price – even after the commission – the property sold quickly.

Paperwork
If you do find a buyer on your own, you’ll quickly realize the mountain of paperwork that it takes to complete a sale. It takes a lot of time to understand all the legal and financial forms you need to make available and sign with the buyer. A mistake in the paperwork and proper disclosures can open you up to serious liability or financial loss.

If you do sell on your own, the sales paperwork is an area where you can’t afford to go it alone. Make sure you do your research and perhaps even consult a real estate lawyer to help you draft the correct forms and disclosures so that you don’t find yourself in significant trouble later.

In the final analysis, you may save a few bucks by going the FSBO route. Unfortunately, you will also spend a significant amount of time, in addition to your current professional and personal obligations, to do so. You may also misprice your home, and you’ll need a lot of help with the final paperwork once you find a buyer. In the end, using a real estate agent is the easier and more affordable way to go.