As founder and CEO of ForSaleByOwner.com, Colby Sambrotto naturally put his own techniques to work selling his personal property. Unfortunately, despite his best efforts, nothing happened. His trendy New York condo sat unsold for six months!
Eventually, he gave up. Mr. Sambrotto not only hired an agent, he even agreed to full commission terms. His surrender paid off, and his condo was soon under contract.
What was the key? Experience. Based on his knowledge of the market, Jesse Buckler pushed the CEO to raise his asking price. When they listed the condo, the savvy agent set their sale price $150,000 higher than originally marketed.
Despite his expertise in the FSBO sphere, Mr. Sambrotto didn’t realize he was sabotaging his very own sale. By under-pricing his trendy condo in a hot market, he actually scared away potentially interested buyers!
Sometimes that’s all it takes to close the deal on an unsold home: an expert.
And when the expert you hire helps get your home sold for more money, it’s really a no-brainer. CEO of ForSaleByOwner.com or not, Colby Sambrotto would certainly agree!
And he’s not the only one: Craigslist founder Craig Newmark has stated at multiple conferences that he loves his real estate agent. His business gives many owners an opportunity to post their own home for sale. Craigslist gives owners a platform to attract local buyers without an agent. But, when Craig has real estate deals to do, HE hires an agent.
So while it is a tired cliche, it IS important to hire a professional.
And while that is a great story, let’s look at some hard numbers. Take emotion out of the equation, and the stats don’t lie: FSBO sellers need your help!
FSBO home sold for $210,000 vs $249,000 when agents helped. Loss of $40 GRAND! (16-22% MORE MONEY)
The numbers are even more drastic when the selling and buying parties already knew each other. It’s clear that while they may be able to attract a buyer, owners going it alone still suffer from not knowing the true value of their home.
-FSBOs have the lowest market share since tracking started in 1981.
-FSBOs accounted for 8% of sales in 2014.
-Only 6% of FSBO owners surveyed specifically said they did NOT want to work with an agent.
In a survey asking FSBO sellers to list the “Most Important Reason for Selling FSBO”, 48% replied they “Did not want to pay an agent’s commission or fee.”
The median age of FSBO owner is 56. Simply put, these owners have lived a little. They are not stupid. They just need your help. Take time to share stories and stats. Educate them on the benefits of listing with an agent.
Highlight the stats showing they are likely to make 15-20% MORE money by listing their home with an agent.
Attract Interested Buyers with Smart Marketing
Use all of these to paint a picture of what would happen when they list with you.
The most obvious method, signs have limited reach. The buyer pool is limited to locals, and unless the home is on a busy road, exposure is mostly neighbors only.
-Word of Mouth
Again the limitation is to local buyers only. The other downside of having a friend or acquaintance as a buyer is the closing price. Owners who knew the buyer before selling leave the most money on the table.
-Online classified ads
Craigslist has long been a popular place for FSBOs to post. Just be aware owners are limiting themselves to a smaller group of buyers who use that approach to scroll for deals. And don’t forget the words of founder Craig Newmark, who personally believes in using an agent.
An incredible amount of work, open houses are most effective when the host has a way to collect visitors’ contact info and follow up on leads. A smart agent can leverage the excitement of an open house, and many times even create a small bidding war between interested parties. Sadly, FSBO sellers don’t usually have the setup in place to capitalize on their visitors. So buyers who may be interested walk in, walk out, and walk away.
The CEO of a FSBO website hired an agent to list his own home. Need we say more?
-Social Media sites
Social media may seem to owners like an easy way to get word of mouth buyers. Unfortunately, it has the same limitations. Unless a seller has experience, they are doing nothing more than telling friends their home is for sale.
A smart agent knows how to leverage Facebook to post listings and run paid ads when needed. They also have a broader range of followers, meaning more potential buyers see the new listing.
-Did NOT market in ANY way
Nothing happens without action. A FSBO owner who isn’t doing anything usually fits in two categories. Indecisive or needing a little push. List the latter, and win over the former with patience.
Go through the most difficult tasks that FBSO’s have with them or explain them in detail.
Selling in their time frame
Nearly all sellers have a specific time frame in mind. So many things to wrong for FSBOs that delay it or cause it to stay on the market way past that goal. The chances rise greatly if they use an agent.
Stop making FSBO sellers feel like idiots!
Take this line from an ad for hiring a Realtor: “You’re finally ready to admit you need help.” That’s insulting!
When you spit out a stat like: “Did you know 92% of homes sell with an agent?”, a FSBO seller hears your voice saying: “Did you know I think you’re stupid?”
Instead, show respect for FSBO sellers. Show them stats showing there’s almost always more money to be made by letting you help.
Share some helpful tips on things that help get homes sold.
Show the WORK involved in marketing:
- Professional Photos
- Closing a deal
- Protecting your interests from unscrupulous buyers
Sell them on the exposure you will get them.
Using a multiple listing service will post it on 900 sites or so.
Real Estate agents will focus on listed homes, to keep things easy between their buyer and sellers. When you post pictures of their home online, you’re laying out a nice inventory for anyone who wants to look.
Take this example: Phoned the owner of a high end FSBO home in Ponte Vedra Beach, Florida. Asked about stopping by to see the place, and he said it would work that evening after he got home from the office. Pulled up into a secluded drive, and he promptly opened the gate when I buzzed in.
Sun was setting, and it would be well past dark by the time we finished visiting. He didn’t ask for any identification or personal information! Trust me, the first thing we talked about was his personal safety. Would have been easy for a thief to scope everything out, or worse.
Smart agents don’t even waste time with “tire kickers”. They are dealing with pre-qualified buyers. Lockboxes and other methods are used to protect your home during the sales and showing process.
Be patient and persistent to win listings
Most agents try to close on the first meeting, don’t. Instead, stay in touch. Be there when they’ve worked to a frazzle. When the owner decides to throw in the towel, you catch it.
Timing is one reason newbie agents win FSBO listings. They don’t have a lot going, so they will invest more time into any lead they have. Un-jaded by failed opportunities and wasted time, they just keep checking in, and their persistence pays off.
Like the race between tortoise and hare, FSBO listings come not to the swift, but to the steady.
Offer to preview their home, so YOU have an idea of locally available opportunities for your buyers.
Smart agents cultivate a list of “off-market” homes. For sale or potentially for sale houses NOT listed give you an advantage with buyers.
Find out what moving plans they have.
You can often win over a listing by helping them as a buyer first.
An added bonus comes from giving FSBO owners a first-hand look into the workings behind the buying process. The same process they’ll benefit from when listing with you. If you get the chance, take advantage of it and “sell them” on the process as you go along.
Prove you are a true professional!
Don’t EVER call on FSBOs empty handed. Bring something of value to them when you stop by.
Show them through actions that you are on top of the market, you return calls, and when you set a date or time to do something, you follow through. Never stop building trust.
If you take these steps and really explain in tremendous detail what they have to go through to sell, then you’ll separate yourself from everyone else.