Real Expects 217% Q1 Revenue Growth YoY to $9.3 Million MORE×
How to Win FSBOs
Why should homeowners who are trying to sell their home solo opt to hire you as their realtor instead? Because you’re worth it.
According to NAR data, the typical FSBO (for sale by owner) home sold for over $50,000 les than agent assisted home-sales.
Whenever Real managing broker Terrica Smith visits an FSBO listing, she reminds owners of the value she can provide:
“I went to school, I know the market, I’m a professional,” Smith says. “If you want your home sold for the best price in the least amount of time, you’ll hire me.”
80% of Smith’s business is built on homes that were originally listed as FSBO. This approach has helped her generate $5 to $10 million in sales annually.
Here are tips for agents who are looking to make FSBOs a bigger part of their business.
Why People Go FSBO
In order to learn how to acquire FSBO listings, it helps to understand why homeowners go FSBO in the first place.
“It’s usually about saving money,” explains Smith. “They think they can do it themselves and they want to save that 6% in commission.”
Other reasons Smith has found is that sellers are concerned they won’t receive the net value of their home if they have to pay a commission, or they have had a bad experience with a previous realtor.
Some are also fatigued by the barrage of generic sales pitches they receive from realtors on a regular basis.
How to Convert an FSBO
Smith recommends several strategies when trying to acquire an FSBO listing.
First reach out by phone and pitch your services. If you cannot reach the seller by phone, try visiting them at their home. If nobody is home, leave your information.
The pitch should be genuine and tailored to the homeowner’s specific situation, as they are likely receiving dozens of pitches from agents on a weekly basis.
Be sure to use data to backup your pitch, such as explaining that FSBO sellers leave roughly 15% of equity on the table negotiating themselves, according to NAR stats.
“I’ll tell them that they end up losing more for not having a realtor sell their home than they would if they hired one” Smith says.
When Smith reaches out, she likes to already have a client in mind who is interested in the property, as a way to entice the homeowner. She will explain that she can get them the price they want on their home even with a 6% commission.
It is also important to educate the seller on some of the functions of a realtor that they might not have considered, such as your wide range of contacts or your ability to vet potential buyers.
“You don’t want to have just anyone visit your home,” Smith says. “We make sure that you are safe and that only people who are serious are going to be walking through your property.”
Also explain that other realtors may not be as motivated to bring buyers to an FSBO property.
While many FSBO sellers are looking to save money, Smith doesn’t believe realtors should offer discounts outright:
“You shouldn’t hope you get the listing because you’re cheaper, you should get it because you’re worth the money,” Smith says. “If you view yourself as a discount agent, you will be treated as such.”
Once Smith learns more about an FSBO sellers situation, such as if they are going through financial hardship, she may then decide to offer a reduced commission.
You could also offer different types of discounts, such as a reduced rate if the seller ends up finding a buyer, or a limited-service listing option featuring a reduced array of services.
Ultimately, Smith says realtors should never market discounts, and instead focus on why they are worth the money:
“Explain to them what that 6% commission buys,” Smith says. “I tell them I will be in constant communication and update them weekly on all the actions I am taking to sell their property.”
How to find FSBO listings
Smith uses FSBO.com to find listings, as well as her MLS.