FSBO sellers will reject you. Remember, they would prefer not to use your services. But if you maintain a steady, professional relationship, offering help and staying in contact for four to five weeks, you will usually be able to win an interview. From there, a listing follows.
Increase your odds of success by taking these two precautions:
1. Limit the number of FSBOs you cultivate. Focus only on the best clients.
2. Avoid prospects with low motivation or unrealistically high price expectations. These sellers are usually the most toxic, and too often, they will try to take their frustrations out on you.
FSBOs fundamentally turn into a game of lead follow-up. You need to personally and regularly contact your FSBO leads to discover their motivation and qualifications, book a face-to-face meeting, disqualify prospects as necessary, provide regular service and communication, and schedule a presentation appointment. Then you need to repeat the service and communication steps several times weekly until the listing is in hand.
To make personal contact, begin by asking the FSBO seller if you can come by and see the home. You can ask them in a few different ways. You can explain that you want to keep abreast of the regional housing inventory; you can say that you are working with buyers who may be interested; you can present yourself as a potential investor; when you can, you can use the “reverse-no” technique. Following are sample scripts for each approach.
Script for keeping up with the inventory:
“Mr. Seller, your home is located in my core area of sales. Because it is, I would like to come by and preview your home. Would there be a time on __________ or __________ to do that this week?”
Script for working with the prospective buyer:
“Ms. Seller, I understand you are selling your home on your own. Let me ask you this: are you cooperating with real estate agents? What I mean is, if a real estate agent brought you a qualified buyer at an agreeable price to you, would you be willing to pay a partial commission?
We are working with a few buyers for your area that we have not been able to place yet. May I come by on __________ or __________ later this week to see your home?”
When you use the above approach, understand that you are not interested in reducing your commission. What you’re really trying to do is achieve a face-to-face appointment to collect more information on their sellers’ motivation in order to determine the probability of securing a listing in the future.
Script for a potential investor:
“Mr. Seller, your home is located in a solid area for real estate investment. I was wondering if I could come by to see your home as a principle for possible purchase and to see if it is a property that would meet my investment needs. Would __________ or __________ be better for you?”
In using the above approach, realize that the key phrase is investment needs. You will rarely find a FSBO that will meet your investment needs. My personal investment need is a home that can be acquired at a 70% discount below fair market value. Most FSBOs are trying to sell their home at 110% of fair market value. This technique does get you in the door to see the home and talk with them.
Script for a reverse-no:
“Ms. Seller, would you be offended if I came by to take a quick look at your home?”
The reverse-no technique can be used with any script. It capitalizes on the normal reflexive human reaction of “no” in order to achieve a positive response. It opens the door to you to then set an appointment.
FSBO Survey Script
Hi, this is __________ from __________. I am looking for the owner of the home for sale.
Your home is in my core area. I am doing a quick survey of the FSBOs in this area. May I take a few minutes to ask you some questions?
The ad in the paper said that you had _____ bedrooms and _____ bathrooms.
1. Do you have a two level or one level home?
2. Are all the bedrooms on the same floor?
3. Are they good sized rooms?
4. How is the condition of the kitchen?
5. Are the bathrooms in good condition?
6. Can you describe your yard for me?
7. Is there anything else you feel I should know?
8. It sounds like you have a great home; how long have you lived there?
9. Why are you selling at this time?
10. Where are you hoping to move to now?
11. What is your time frame to get there?
12. How did you happen to select that area to move to?
13. How did you determine your initial asking price for the home?
14. What techniques are you using for exposure and marketing of your home?
15. Are you aware that over 86% of the buyers for properties begin on the internet now?
16. If there was a clear advantage for you in using me to market and expose your home, and it cost you very little, would you consider it?
17. Let’s simplify. Set a time to get together for fifteen to twenty minutes, so I can see your home and understand your objectives. I have time available __________, or would __________ be better for you?
FSBO relationships are built over time. By introducing yourself to the owners the first weekend their FSBO is announced, before the masses start calling on Monday, you create a good connection. By sending them tools, educational materials, free reports, and forms, you become an ally. By taking a personal interest in them and their situation, you create a solid connection that, in many cases, pays off when the owners decide to go with an agent they know and trust – preferably you.
Over the course of building a relationship with the owners, you’ll be able to get them to understand that, in every real estate transaction, a commission is paid. In the end, FSBO sellers don’t “save” the commission. Rather, they try to earn the commission by doing an agent’s job. In doing so, they spend their money and time to perform, as best they can, the duties of an agent. Those duties include exposing the home through marketing, presenting the home to buyers, building a sense of buyer urgency in order to prompt an offer, scheduling home inspections, handling qualification checks with the lender, supervising repairs, and facilitating the closing.
Not only is a lot of work involved in earning the real estate commission but FSBO owners unwittingly let buyers basically steal the commission through under-priced offers. The people who shop FSBOs don’t do it for their health. They want to secure a low price and a high initial equity position. In the process, they set out to “earn” the commission, and often do.
By building a relationship over time, you will demonstrate your value to the FSBO seller. Remember at all times, whether you’re working with FSBOS or expireds, your goal is simply to be one of the two, three, or four agents that the owner will interview when the time comes. You just want the opportunity to compete and make your presentation.