FSBOs Need You More Than Ever
Inventory levels are at historical lows. House prices are at historical highs. Houses are selling faster than ever and there is pent-up buyer demand. In this type of market, sellers often consider selling without an agent.
In a hot real estate market, sellers starting thinking “I can sell it myself. Why pay anyone a commission?” The answer is “Yes, they can sell it themselves, but they will sell it for less than they should.”
Most agents won’t contact FSBOs for one of three reasons:
- They lack confidence when they are challenged. Agents are often not prepared to answer the pointed questions that FSBOs pose because they don’t have solid answers at the tip of their tongue.
- It is easier to avoid a challenging situation and look for easier opportunities.
- Some agents actually believe that in a hot market the FSBO can sell the house without them. They don’t understand the powerful reasons why a FSBO would be much better off financially by using an agent. If you feel this way, you are dead wrong.
FSBOs need you now more than ever. Let me explain:
- During the pandemic, a significant portion of buyers are reluctant to enter a stranger’s home. FSBOs don’t understand the safety protocols needed to keep everyone safe.
- During the pandemic, most buyers start shopping online and FSBOs don’t have access to the online tools and marketing resources to get the exposure they need.
- Any buyer who is shopping FSBOs in this market is only doing so to get a deal.
- FSBOs typically rely on lawyers to complete the required contracts. Lawyers are bad negotiators. Their focus is on finding problems with the deal, not on finding resolutions. Keep in mind, the lawyer gets paid by the hour regardless of whether the house sells.
- Navigating a real estate sale during the pandemic takes a lot more work to coordinate home inspectors, appraisers, minor repairs, and the overall closing process due to new safety protocols. FSBOs are likely unaware of this.
When you are prospecting a FSBO, be mindful that their objective is to NOT pay a commission. Their goal is to put as much money in their pocket as they can. Your job is to convince the FSBO that they would be further ahead working with you than doing this on their own.
When you are prospecting a FSBO, here so some of the objections you will hear, and the responses you should have prepared to overcome their challenges:
FSBO: I had someone through yesterday and I think they are bringing me an offer.
AGENT: That’s wonderful. The good news is, you haven’t accepted the offer yet. I’m happy to meet with you to give you an opinion of value before you sell your house for less than you should.
FSBO: I had an open house last weekend and I had 5 couples through, so I can do this on my own.
AGENT: That’s great that you had a handful of people in. Just out of curiosity, how would you qualify their financial ability to purchase your house? The last thing I want is for you is to get caught up in a deal that can’t close. Also, did you collect everyone’s contact details, so you can get back to them if someone tests positive for COVID?
FSBO: The market is hot right now, so I think I can do this myself and save the commission.
AGENT: I think you CAN sell it yourself. It is not a matter of selling your house, it is a matter of getting the maximum amount you can for it. I appreciate your resistance to paying commission, but let’s take commission out of the conversation for a minute. If you can walk away with more money using my services than you can doing it on your own, would you be willing to meet with me?
FSBO: How do you think I would walk away with more money with you than doing it on my own?
AGENT: First of all, any buyer who is looking to buy a home without using a real estate agent is looking to get a deal. They are hoping to take advantage of an uneducated seller. If a buyer can use a real estate agent, all their expertise and services, why would they go direct to a FSBO? To get a deal. You can sell it for less and do all the work yourself, or you can hire me to look after everything and sell for more.
Real estate today is not sold across town, it is sold across the world. We have extensive online marketing tools to get you maximum exposure. The more buyers that are aware of your house, the more demand we create. Demand drives price.
FSBO: I’ve sold three homes before and I know how to negotiate a deal.
AGENT: That’s fantastic. I love working with educated sellers. But selling the house isn’t the problem. Negotiating the best possible price is. You bought this house because you liked it and you have an emotional attachment to it. Emotions can cloud our decisions. Using a trained negotiator like me ensures you have an expert opinion supporting your choices and decisions at those critical moments.
FSBO: I understand everything you are telling me, but I still don’t want to pay a commission.
AGENT: If I’m fortunate enough to have a business relationship with you, I’m the person who carries all of the weight. I cover all marketing expenses up front. I assume all the liability. The only time I get a return on my investment is when I bring you a deal that you can’t say no to. There is no risk on your part. So, I have time on Saturday or would Monday be better.
I can give you scripts until the cows come come, but if you inherently believe that FSBOs don’t need your services, then you will never be able to communicate with conviction. You must truly believe that they are better off working with you. Before you can convince others, you must convince yourself of the benefits you bring to the table.
I challenge you to prospect FSBOs this week. You can find them on Zillow and Craigslist. You can purchase a subscription to a service like theRedX.com or Landvoice.com or you can just google FSBOs in your area. Don’t expect the FSBO to invite you over after one phone call. It can often take up to 7 contacts with a FSBO to convince them to meet with you.
Persistence pays.
Chris Leader
President
Leader’s Edge Training