As a real estate agent, seeing those “for sale by owner” signs has to make you cringe.
Why would anyone try and sell their home without an agent?
Do they really know what they’re in for? What they’re risking?
In all honesty, they probably don’t. The biggest reason people choose to sell their home sans agent is to save on commission fees. Plain and simple, they want to save money.
Want to convince an FSBO seller to list with you instead? Here’s where you start.
Show them the money.
What most FSBO sellers don’t know is that the commission check they’re afraid of will likely pale in comparison to what they’ll lose on their home’s sales price.
According to the National Association of Realtors, the average FSBO property sells for $190,000. The average agent-listed one? It sells for nearly $60,000 more.
Now, unless they’re selling a super luxe property with an equally luxe price tag, the commissions they’d pay an agent are going to be nowhere near $60K.
To really illustrate this, put together a nice infographic comparing the average FSBO and Realtor-listed data. Mail out postcards with the graphic to any FSBOs in your area, and include your info on the bottom. You can bet you’ll get a few bites once they see the shocking numbers.
Though money certainly talks, there are a few other secret weapons you can bring out to sway FSBO sellers as well — especially if you’re able to get them on the phone or sit down with them in person.
First, talk about your tools. Most FSBO sellers don’t market their properties at all — and it means a longer sale and, often, a lower sale price than they were hoping for. Tell FSBO owners about all the tools you have at your disposal that can draw attention to their property — things like video tours, MLS, other buyer and agent connections, etc. These are things they simply don’t have access to.
Next, remind them of the legal stuff. FSBO owners better be well-versed in real estate law and contract negotiations, because that’s what on the road ahead of them. If they’re not, they’ll likely need to call in a real estate attorney for help, and at hundreds of dollars an hour, they’re rarely a cost-savings when compared to a real estate agent.
If you’re able to, you can also consider cutting your commission — even just a little bit. If the property looks like it’s in good, marketable condition, reducing your commission fee just a small amount could still net big gains in the end. The seller will think they’re getting a great deal, and you’ll have a new listing. It’s a win-win for everyone.
Talk about timing, too. A lot goes into selling a home. There’s marketing, setting up showings, prepping the house, negotiating the contract, and so many other steps. Does the seller really have time to do it all on their own — plus whatever job and other obligations they already have? Also, do they have a strict timeline they’re on for the sale? Do they need to be in another house by X date for a new job? FSBOs don’t usually go quickly, so they’ll need to be prepared for a lengthy sale if they continue DIYing it.
Finally, let them set the rules. Maybe it’s not all about the money. Maybe they had a bad experience with an agent in the past, and they simply don’t want to go through it again. Let the FSBO seller know that they can set the ground rules should they choose to list with you. What do they want you to do? What do they want you to step back from? Where could they use your guidance and expertise? Giving them some control in setting the stage can help alleviate any fears left from previous experience.
Make Sure to Follow Up
Take some time to create an FSBO fact sheet — something you can leave with sellers to remember you by. Fill it with tips, tricks, and guidance aimed at FSBO sellers (but don’t give away all your secrets!) and of course include your contact info on the bottom.
You can also ask to add them to your FSBO email list for extra advice. Then, send them the occasional message over the next couple of weeks with local market updates, selling guidance, and more. Though they may use it to continue selling the home themselves, you’ll keep yourself top of mind. In the event their home doesn’t sell fast enough or they’re just plain tired of DIYing it, you can bet you’ll be the first agent they call.
Do your buyers or sellers need mortgage-related advice? Put them in touch with an Embrace home loan officer today. We can help.