TTFN, FSBO
By Andrew Conner
For-sale-by-owner (FSBO) home sales can be an interesting and potentially profitable challenge. While your business might not be able to rely on FSBOs alone—only 8 percent of homes were listed as FSBO in 2016, according to the National Association of REALTORS®—that doesn’t mean FSBO conversions can’t be a good source of income.
“Most people think FSBO is for sale by owner, but others have said it stands for a Fast Small-Business Opportunity,” jokes Paul Pastore, CRS, a REALTOR® with RE/MAX Infinity in Chandler, Arizona, who has decades of experience with FSBO sales.
Where to start
Like many sections of the real estate business, there are plenty of ways to acquire FSBO leads. You can look to apps or web services being used for this purpose like Espresso Agent or RedX, which aggregate leads from common sources such as Zillow, Craiglist, and even newspaper classified ads and public registries. Pastore’s service of choice is LandVoice.
But Pastore and Rich Sands, CRS, and RRC Certified Instructor, recommend paying attention and looking for leads through FSBO signs when you’re in the neighborhoods you service.
“The internet has given us all kinds of avenues for discovery [of FSBO leads],” Sands says, “but I still think the best way to find them is when you’re out and about and you see ‘FSBO.’ If I see one in my market, it will increase the odds that I can help that person, and I don’t have the added task of learning that market.”
Sands also recommends identifying local markets that are ripe for FSBO conversions by looking for areas that have been strong sellers’ markets. Often when people see their neighbors’ houses selling quickly for good prices, it gives them more confidence to go FSBO, and in turn gives agents an opportunity to show their value as experts in the market.
Making the conversion
Once you have collected leads, it shouldn’t take long to determine whether an individual lead is a potential conversion. When calling FSBOs, Pastore uses a simple three-question script (see sidebar), and he estimates that it only takes about a minute to determine if a lead is worth pursuing.
“If someone were to say: ‘What’s the secret?’ having done this for 40 years, I would say, ‘You want to be the first, the best and the most persistent,’” he says. “NAR statistics show 66 percent of sellers are just going to talk to one agent [before hiring someone]. If you make the commitment that the lead is worth pursuing, then be persistent. In baseball you get three strikes, in FSBO sales I think you need five.”
In fact, NAR data shows that the average FSBO seller is contacted by an agent eight times before hiring them. To facilitate these contacts, Sands recommends thinking ahead during each conversation with the seller.
“If I see the ‘FSBO’ sign, the No. 1 thing I do is park my car and go knock on their door,” he says. “If they say, ‘We’re not hiring REALTORS®,’ what works is: ‘I’d just love to see your house,’ or ‘I’m anxious to keep up on the market,’ and once I get in the house, my goal changes. I’m looking for reasons for the next contact.”
Sands explains that finding that reason could be as simple as asking them how they arrived at their price, and if they waver or seem confused by the question, offer to give them pricing information. Try to become their go-to person for real estate information, even if they haven’t hired you yet. Sands recommends helpful gestures such as sharing an open house checklist if they have one planned, or lending them an informational DVD (e.g., David Knox’s Selling “By Owner”).
“I’ll share it with them and say they can keep it for a couple of days and then I’ll come pick it up,” Sands says. “A couple of days later I’ll call and ask if they’ve had a chance to watch it, and if not, I’ll keep putting it off, as long as we continue to talk. I’m trying to build the relationship.”
In the end, it’s about establishing a relationship with the seller so they look to you when they finally decide to list with a broker.
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Breaking the Ice
Paul Pastore, CRS, a REALTOR® with RE/MAX Infinity in Chandler, Arizona, uses a simple script when he contacts FSBO leads to spark a dialogue and establish a rapport with the seller. He usually only writes down three letters (B, P and C for broker, possession and condition) before a call, which are enough to remind him of the three questions he wants to ask:
1. Are you willing to show your house to a broker’s client? “A lot of them don’t want to pay a full commission, but they’re willing to pay something,” he says. “And if they say, ‘I’m not paying anything, I hate real estate agents,’ then I just say, ‘See you later.’”
2. What sort of possession are you looking for? This question helps Pastore determine if the property is worth his time. If the owner says they have a tenant with a three-month lease, or another possession situation that complicates matters, it might not be worth it.
3. What condition is the property in? If the property sounds like it is in reasonably good shape, and the owner has shown interest with their other answers, then Pastore will follow up by suggesting an in-person meeting to view the home.
