Would you like to sell an additional four to six homes a month? You might be surprised to find out that For Sale By Owners (FSBOs) are a great source of leads that you can use to grow your real estate business. FSBOs have a reputation of requiring a bit more work and dedication over the long run, but with the right amount of effort you can quickly get more clients through this lead source. Follow the 7 tips in this FSBO how-to guide and you quickly increase the amount of listings you take on a monthly basis!
Why Choose FSBO
Through your career as a real estate agent, you might have heard not to pursue For Sale By Owners because they are typically dead leads.
However, FSBOs are still very much worth talking about. In fact, according to a study conducted by The National Association of Realtors, 92% of FSBOs will eventually use a realtor.
Aside from this, as many as 100 FSBO listings can go up every month, if not more in densely populated areas. This stream of new opportunities means that this is a consistent source of leads for you to tackle. Not to mention FSBOs are either free or very low cost to go after.
FSBOs are also a great source of leads because they are incredibly motivated. They already want to sell, as long as they can get the price they need. And outside of expired listings, FSBOs are one of the best ways to get you face-to-face with sellers every month.
FSBO How To Guide
Now that you know why you should use FSBOs as a lead source let’s get into the most critical aspect of FSBOs: how to get them as clients.
1. Follow Up
Typically, a FSBO will not list their home with a realtor right away. Working FSBOs is a long term game that depends on you consistently following up.
The leads will get easier to talk to the more times you’ve spoken with them. As you build a relationship with the homeowner over time, check-in, and provide them with value, the calls will soon become effortless.
Once you build a great relationship with the FSBO over the phone, they will likely say that if they ever decide to list, they’ll give you a call.
Don’t believe them! They’re not going to call you; they’re likely just getting you off the phone. You need to be persistent. Even if they tell you this, you need to keep following up.
Something to note when calling FSBOs is they tend to have a higher answer rate than a lot of other lead sources because every incoming call could be a buyer on the other end of the line. That’s not to say they all pick up the phone, because many don’t. But remember, just be consistent!
2. Present Value
When interacting with a FSBO, keep in mind that your initial goal is to provide value. Here’s where you throw your salesperson hat out the window and honestly just try to give value to the seller.
The odds are that eventually you will get the listing if you provide enough value to the seller and you follow up consistently.
Some common ways you can provide value to a FSBO are by giving them a market analysis, comps in their area to see what their home should be priced at, and any legal documents they may need.
You can also give them any contacts you may have to get their home looking as good as possible, such as a photographer or painter.
Mostly you should try to be the FSBO’s agent without actually being their agent. Just remember not to offer them any legal advice.
Your efforts will pay off when they inevitably decide they do need an agent. You will be the one they call!
3. Phone Tips
There are three things you should never do when you’re on the phone with a FSBO.
First, you should never lie to a FSBO. For example, don't try to bait and switch them by saying you may know a buyer interested in their home if you really don’t. Be real and honest from the get go.
The other thing you should never do is try to convince the seller that their ideas are crazy. There are many scripts out there that will teach you to convince the FSBO that their opinions don’t make sense and that yours is a much better proposal. Don’t go that route, it won’t pan out for you.
I’ve found that a value-based approach, where you just try to be the most helpful realtor you can be, is the most successful in the long run.
4. Book a Meeting
When dealing with a FSBO, setting up a face-to-face meeting with them is your number one priority.
The seller is probably getting tons of calls from other agents, so they’re likely going to say anything they can to get you off the phone if you don’t have a buyer.
Your only goal of that call is to set up a face-to-face appointment with the seller. It’s virtually impossible to pick up a FSBO just by trying to convince them over the phone. A face-to-face meeting has a much higher chance of being successful.
Once you get face-to-face with the seller, two powerful questions will help you build trust and rapport with them:
- When you first saw this home, what did you fall in love with?
- When you sell this home, what will you miss the most?
These two questions are so powerful because they create a sense of nostalgia in the FSBO. And when you’re face-to-face with them, they will associate that nostalgia with you as their agent. Most likely, no other agents they’ve met will have asked them those two questions.
5. Use a Dialer
There are three dialer systems that work well to call a FSBO. Deciding which one to use depends on your goals and how much money you’re willing to spend.
RedX is my preferred dialer system for calling FSBOs (and expired listings). Pricing is mid-range and the system includes all the essential features you would need.
Vulcan 7 is the most expensive option of the three, coming in at about $250 per month on a 12-month contract, or up to $300 per month if you’re going month-to-month.
I only recommend spending this much if you’re also going to be calling expired listings, which you should. Since Vulcan 7 does both FSBOs and expired listings, the pricing is fair for the caliber of system you’re getting.
Espresso Agent is a little less expensive at about $155 per month, with promotions available frequently. I would consider it to be a light version of Vulcan 7, at a lower price.
Alternatives to Using a Dialer
Not interested in a dialer? There are all sorts of free ways you can get FSBO information and just hand-dial them. Several options are:
- Newspaper Classifieds
- Yard Signs
- Facebook Marketplace
A quick note about Facebook Marketplace is that you need a slightly different strategy here. Sometimes the seller doesn’t include their phone number, so the only contact option is to direct message them. In that case, it’s best to stick to a simple script.
First, ask, “Is your home still for sale at ‘address’?”
The seller will most likely say yes, which is when you reply, “When is a good time to call you?”
That’s it. This short reply will typically get you the most responses. You don’t want to put too much information out there all at once.
Your only goal is to get their phone number so you can call them and try to set up a face-to-face meeting.
6. Allow FSBO Pain
Sometimes as realtors, especially when it comes to FSBOs, you want the seller to accept your help because you know you can help them sell their home faster and for more money.
But sometimes you just have to let them go through the pain of seeing what it’s like to sell on their own, and most likely, they will come to understand what a value it is to work with an agent.
When you do this and don’t oversell your services, they’ll come to understand what a pain it is to schedule their own showings and work with unqualified buyers. And if they do get a contract, they may start to realize they are a little over their head when it comes to understanding all of the terms and repercussions.
7. Ask for Business
Remember, this would only be after you have provided value and followed up consistently. Don’t ask for the FSBOs business at the beginning of the first phone call, or even at the initial face-to-face meeting. Asking for the seller’s business that early on will likely turn them away.
However, if they don’t approach you first, it may get down to the nitty gritty. Evaluate your standing with the FSBO and ask to represent them, with a firm reminder of the value you can provide. After all, if you never ask for their business, you may never get it.
You have to plant the seed in the FSBO's mind that you’re going to provide value and help them regardless, but that if and when they’re ready to use a realtor, you’re going to have their back and help make the process easier for them.
Don’t give up!
You will hear NO more often than YES.
But as long as you continue to make the calls, build the relationships, and add value to these FSBOs, you will see a return on your efforts.