How to Successfully Convert FSBO’s to Your Listings

I’ve been in real estate now for over 10 years. I started with no sphere of influence and in a totally new area after moving across the country to relocate. In my first year, I was International Rookie of the Year with over $12Million in Sales. One of my main target markets was For Sale By Owners.

I learned some key pieces to actually getting these prospects to become my clients, here is the plan for conversion:

The first step is to actually have a real Action Plan for converting FSBO’s to your Listings. The Action Plan should span over 90 days for the high intensity contacts, and then convert to a lifetime of “touches” to make sure that they stay your clients and customers for life.

The initial step of the Action Plan is to find prospects: you can use a variety of sources including the newspaper (online and offline), FSBO specific sites and driving around areas. Once you’ve found them, you need to add them to your Action Plan and make that initial call.

The initial call should be something that is comfortable for you. It should not be threatening or question their intelligence. You’re probably laughing at this one, but when I started there was a colleague of mine who was also targeting FSBO’s – he would come to the office early in the morning and start making calls. You have to admire him except that he would always cut off his initial call script within 30 seconds because they hung up on him!

The reason for his massive failure was that he took a course from a highly regarded and successful real estate trainer (albeit one that had never actually sold a house!). This trainer taught him the script that I hear way too often: “Hello, this is Joe Smith – is the owner around? Great, I understand that you are trying to sell your home yourself, is this correct? Wow do you know how many people try that and then end up listing with a realtor within 30 days? Do you realize that people have actually been killed trying to sell their home by themselves?…”

The conversation was one based on fear and insulting their intelligence. What would you do if you received that call at 7:00 AM (or anytime for that matter)? You would become angry and hang up too!!!

The other mistake script is telling them that you have a buyer that you would like to bring by. The only problem with that is that you really don’t have one and then you show up to see the property and use an excuse that your buyer couldn’t make it – only to proceed to try to get them to list their home with you! Warning: they’ve heard it and been there already!

Your initial call should be one of understanding and patience – not fear and insults. Remember, the FSBO has decided to sell their home without an agents help for any number of reasons. You have no clue yet why but one of your missions later will be to find out. First, you need to get your foot in the door.

I always used an approach that allowed me to tour their property without ever mentioning the possibility of listing their home. If you approach the call as a genuinely interested person, then you will have more success.

Once you’ve met with them and toured the home. You will have substantially more knowledge on the property, the owner and the reasons for attempting to sell FSBO. You can then start to build additional trust and offer help and assistance. This is accomplished by a series of postcards, phone calls, handouts and letters.

Your postcard series should be targeted to offering various services for free or a small fee: use of your IVR system, fliers, showing and tour services, FSBO website listings and more. The more that the FSBO sees you as a friend instead of a salesperson looking to take another listing, the better off you are and will be in the future.

Your letter series should include handouts, guides and other support materials that show your professionalism without asking for a listing. Examples of your marketing materials are good but actual step by step guides (“Holding a Successful Open House”, etc.) are much better. Again, this is an opportunity to set yourself apart as the expert and the only person trying to help the For Sale By Owner succeed.

Here’s one key tip: ask to host their Open Houses. If you do this and do it correctly, you should get 1 -2 additional pieces of business from every Open House that you help that FSBO Owner with.

Here’s the bottom line – treat the FSBO as if they were already your client. Help them with their efforts… if you follow the right process, one of two outcomes will occur. Either you will be asked to list their property or it will sell and you will get referrals and additional business!

Good luck and go get them!

The Benefits of Flat Fee MLS Listings

Home sellers today have multiple options for listing their homes for sale and in the current economy, many are opting to go the route of ‘For Sale by Owner’, more commonly coined as ‘FSBO.’ While employing the FSBO sales method may be cost-efficient, there are also limitations that one does not face when employing a real estate broker.

One such limitation for FSBO sellers is the inability to use the Multiple Listing Service (MLS) directly. The MLS replaces an earlier system wherein each real estate company had its own ‘internal inventory.’ With the MLS, real estate agencies post their inventories in one central database for the geographical area, which is open to the public for viewing. Sellers employed “selling agents” to place their property on the MLS for a commission on the sale price, often between four to seven percent, paid to the selling agent at closing.

Increasingly, more brokers are offering flat fee MLS listings to FSBO’s and any others interested in the service. With a flat fee MLS listing, a broker provides the service of placing information about a property into the MLS system for a one-time low fee.

This service has a positive effect for all parties, buyers, sellers and real estate agents. From the buyers’ standpoint, the MLS provides a more straightforward way to look at a range of properties. Buyers also know that since FSBO sellers operate without an agent, there will be one less cut taken out of the sale price. From the sellers’ side, it is important to utilize the MLS in the sale of their real estate and the MLS flat fee listing service is the most economical method to sell a real estate property. For the broker, while the MLS flat fee listing service decreases the revenue stream under the selling agent method of yore, the broker receives payment immediately at the time of service. It is a win-win method.

The idea of flat fee MLS listings is also part of a greater movement where Web access to information is reshaping conventional business methods. Traditional systems that operated on a more closed information pattern are yielding to more flexible purchasing strategies for large investments like cars and homes.

Flat fee MLS listings are one of the most economical and efficient methods for sellers to get information about their real estate on the market and into the public eye. They are a low fixed cost alternative to high buyer and seller agent commission fees.

Obstacles to For Sale by Owner (FSBO) Listings and How to Overcome Them

You have probably thought about going the “for sale by owner” or FSBO route, but wonder what you’ll miss out on by avoiding the high commissions.

After all, signing up with a regular commissioned real estate broker will take 6%, 7%, or even more right off the top of your sales price. And, that means a lot of money out of your pocket. So, many people are eager to go the “for sale by owner” route to get the most for their home.

So, let’s look at what you may miss.

First, unless you first talk with some real estate agents you may not know what comparable homes have sold for in your area. Understanding what similar properties have sold for is critical to pricing your property to sell. If you price your home too high you may not be able to sell your property until you lower the asking price and become more competitive.

So, before you decide to go the FSBO route, get some assistance from several real estate agents about setting the right listing price.

Second, while you may have a sign on your front lawn indicating your house is for sale, only people who drive down your street will see your sign. You will have take further steps to expose your home to potential buyers. One of the best ways to do this is through your “Multiple Listing Service” or MLS. This is the database all the real estate agents in your area use to show properties. Many MLS databases are searchable from the Internet.

You can get your property listed on your local MLS for a flat fee. Flat Fee Listing [] works with brokers across the United States who will enter your property into the local MLS as well as other national sites for you.

Third, a real estate agent can help guide you in getting your home ready for showing to prospective buyers. As an energetic home owner you can find sources of information about how to show your home in it’s best light on the Web or in bookstores. A home inspection will also help you know exactly what repairs need to be done to get your home into prime condition. Most buyers include clauses in their offers that make the purchase contingent on a clean property inspection report. You attention to your own inspection report will help eliminate or reduce negotiations regarding these contingencies.

Fourth, many people who look at “for sale by owner” properties expect the listing price to be below that of properties lists by regular brokers. They expect to share in your savings. By pricing your property just below competing homes, you will gain a price advantage that may attract so many offers you won’t have to worry about buyer expectations of a further reduction in price.

Fifth, going the FSBO route may put you at a disadvantage when it comes to negotiations and legal matters. Selling a home is an expensive legal transaction and offers and counter offers are all part of a legally binding contract. Unless you have access to legal counsel or are very familiar with real estate transactions you will need to educate yourself in these areas. If might be wise to retain the services of a real estate attorney just to make sure everything you do is in your best interests.

Overall, selling your home requires a number of skills and a lot of patience. While you can do it yourself and possibly save some fees, you will need to gain some knowledge and do many tasks that a real estate agent can do for you. Remember that many people have sold their property on their own and you can too.