Real estate might be a cutthroat industry. But even the toughest of real estate rivals can unite against one common grievance: FSBOs.
There’s virtually nothing that grinds an agent’s gears more than a stubborn FSBO.
Why? Here’s just a few reasons:
- FSBOs think they can do our jobs better than we can.
- They think we don’t deserve the commissions we earn.
- They think cutting out the middleman will save them time and money.
Of course, you, as a Realtor, know your job isn’t easy. You know you more than earn your commission for the time and effort you dedicate to your clients. You know that selling FSBO brings with it a whole host of headaches and stresses the seller never even imagined.
But that doesn’t mean there aren’t millions of people every year who choose to take the home-selling leap without a Realtor.
According to the National Association of Realtors®, FSBOs accounted for 8% of home sales in 2016.
There’s even a website, ForSaleByOwner.com, solely dedicated to helping people list on their own. The site boasts:
“Selling your home can be confusing and stressful, but with For Sale By Owner at your side, you can easily do it yourself in 5 simple steps!”
But here’s the catch: Even Colby Sambrotto, one of the site’s founders, couldn’t sell his condo without an agent.
That’s right. According to The Wall Street Journal, Sambrotto’s $2.15 million two-bedroom New York Condo sat on the market for six months before he eventually enlisted the help of a seasoned pro. It turns out, his attempts at listing online and posting in the classifieds were no match for years of experience and, you guessed it, a 6% commission.
Not only did broker Jesse Buckler set the price $150,000 higher than the original asking price, he also found the elusive buyer Sambrotto’s self-help methods had failed to attract.
If he can do it, so can you.
Approaching FSBOs can be intimidating. They have dozens of Realtors blowing up their phones or pounding on their doors at all hours of the day.
When all they’ve dealt with are pushy Realtors with self-serving agendas, it’s not hard to understand why most FSBOs are so cynical about Realtors.
The key to approaching FSBOs is approaching them in a hands-off, non-confrontational way. You have to ease their fears and appeal to their sensitivities. Become the FSBO’s friend, and you’re likely to become their Realtor.
Where FSBOs Fall Short
To understand how to list FSBOs, you first have to understand their shortcomings.
According to the NAR, The typical FSBO home sold for $190,000, compared to $249,000 for agent-assisted home sales. The organization found that FSBOs most often struggle with the following:
- Getting the right price: 15%
- Understanding and performing paperwork: 12%
- Selling within the planned length of time: 13%
- Preparing/fixing up home for sale: 9%
- Having enough time to devote to all aspects of the sale: 3%
Let’s break down those struggles, and find ways you can solve the problem.
Getting the right price
Setting the price as a FSBO is as good as a guessing game. FSBOs might just pick a price close to what their neighbor sold for a few months ago, not considering specific features and conditions that may increase or decrease the value of their specific home.
Consider approaching the FSBO with a carefully researched market valuation. Point out specific features that might just snag their home a higher listing price than their friend’s seemingly identical home.
The key here is to inflate their ego just a bit — but don’t offer an unattainable price. After all, you want the home to sell just as much as they do.
We recommend only pursuing FSBOs that are underpriced. Sellers are much more receptive when you approach them with the potential of a greater profit, even after your commission has been paid.
This one’s a no brainer. Without a Realtor on their side, FSBOs have to hire a lawyer, handle mountains of confusing paperwork, and try to avoid making costly mistakes at the bargaining table.
You were trained to handle every aspect of a sale. With you at the table, all that’s left for the seller to do is sign on the dotted lines.
Selling in a set amount of time
As real estate agents, it’s in our best interest, as well as the homeowner’s, to sell in the shortest time possible for the most money possible.
The longer the home sits on the market, the longer you have to wait for your commission check — and the greater your risk of losing the listing to another agent if your contract expires.
Explain to the FSBO all the ways you can market their home that they don’t have access to as a FSBO. In addition to making sure buyers know about the home, you can also field calls, set up showings and handle negotiations — all aspects of the sale that ensure the home sells quickly.
Preparing the home for sale
Preparing to sell a home in the 21st century means more than a quick carpet cleaning and lawn mowing. In a buyer’s market inundated with HGTV-level expectations, sellers have to know what upgrades can bring the biggest return on investment.
Whether that means updating kitchen appliances, replacing old carpets with new hardwoods or renting furniture to create the perfect staged space, agents know better than anyone what little upgrades can really sell a home.
Not only do you know what upgrades to make, but you’re also well-connected with the best local professionals. (A word of advice: if you consistently bring sellers to the same local contractors, they may offer you loyalty discounts — or even start sending clients your way!)
When all those upgrades are complete, you can take professional-level photos to show off the work that’s been done. Most FSBOs don’t want to invest in a professional photographer — much like they don’t want to invest in a professional real estate agent — which is another fatal mistake.
According to a 2017 NAR study, 89% of home buyers looked to photos as their most useful source of information on any given property.
Good photos get buyers in the door. And the more buyers you get in the door, the higher your chances of selling.
Having enough time
Not only do you have enough time to sell the FSBO’s house, it’s quite literally your job!
Most FSBOs are trying to sell in between working 9-5 jobs and raising families, which leaves little time for showings, answering calls and everything else that’s essential to a successful home sale.
Show the FSBO you’re dedicated to selling their home — and making their lives a whole lot easier — and you might just land the listing.
The Right Way to Approach a FSBO
In order to list with FSBOs, you have to approach them sensitively and without selfish pretense (or at least it has to appear that way).
FSBOs know that your end goal is to list their home, but you don’t need to go right in for the kill. As the old saying goes, you can catch more flies with honey than vinegar!
A great way I’ve found to get homeowners to give up on selling FSBO is the no-risk listing agreement. Here’s how it works:
You offer to list their home on the MLS, market it online and attract more potential buyers. If they find a buyer on their own, you remove your sign and don’t take any money. But if you find a buyer, they pay your commission. Here’s what to say when you approach them:
“If there was a way that you could get exposure to all the buyers working with a Realtor and in the MLS, and it didn’t cost you any money, would you be interested?
“I understand you’re skeptical. Here’s how this works. You could get all the buyers you’re already getting right now. But, you ALSO get access to the buyers working with a Realtor and in the MLS.
“If you could have all the perks of working with a Realtor, while at the same time, marketing the home yourself, would you be willing to meet with me?”
If they agree to this deal, in most cases, the FSBO will give up trying to sell their home once they realize how much work and stress you’ve taken off their plates.
To learn more about this method and the various addendums you should put in place to safeguard yourself, check out our FSBO training guide.
The Easiest Way to List FSBOs
Here at Smart Agents, we’ve created a powerful marketing tool that takes the pressure off of approaching FSBOs.
We have a book — two in fact — designed to walk FSBOs through the entire selling process from start to finish. When you give them a free copy of this book — with your name and face on the cover — you’ve established that your intention isn’t to push them into listing with you, but rather to help them have a successful home sale, whether you’re involved or not.
When you give them this book, a few things could happen:
- The seller will be so impressed that you’ve written a book about selling FSBO that they’ll immediately want to hire you.
- The seller will find your genuine, no-strings approach refreshing in a sea of pushy Realtors, and they’ll want to learn more about how you can help them.
- The seller will realize after reading through your book that much more goes into selling FSBO than they initially thought. They may realize the ease of sale is well worth paying you a small commission.
One of our members, Jim, has found success using a no-pressure approach. He drops off his book and offers to help — no strings attached.
“I just told them, I said listen, ‘I'm not gonna, you know, I'm not trying to buy anything; I'm not trying to sell anything. Here's a book that might be able to help you sell your house a little faster for a little more money.’ And I said, ‘You folks have a great day. If you have any questions, you can call me any time, no obligation, no cost.’”
Seal the Deal
As with any real estate deal, you need to follow up.
Once you’ve approached the FSBO or given them a copy of your book, you have to continue to check in, always maintaining that hands-off attitude.
Stay on the Realtor’s side, and eventually, they’ll want you on theirs.
Joe Nickelson is a real estate professional dedicated to helping home buyers and sellers achieve their dreams of owning property, and helping real estate agents stop using the sometimes-vicious tactics that weigh on their consciences. He believes that the Smart Agents books will, quite literally, change people’s lives for the better. Check out his full bio here!