FSBO

This week’s plan:

Monday:   What is FSBO?  Why FSBO?

Tuesday:   What are they thinking, get into their mindset. Where and how you find FSBOs

Wednesday:   The Dos and the Don’ts

Thursday:   Marketing Action Plans: Value – Customer Service – Net More

Friday:   Scripts and Getting the Appointment

 


DAY 1

Monday Objective: What is FSBO?  Why FSBO?  FSBO Stats

What is a FSBO?  For Sale By Owner

Why should we even bother with FSBOs?

When you have listings you get more leads and that equals revenue that which allows you leverage systems and people to help you be more productive. The other reason to have listings? The inventory is so low. Normally buyers are quick cash, however in this market, sellers are quick cash. Many agents have an entire pool of buyers with nothing to buy but listing agents sell their listings within a week of listing and then move on to the next one. Of course the agent does need to make sure price and condition are in line with the market demand.

The fact is that FSBOs as a group are such attractive targets for real estate agents, that it just doesn’t make sense to ignore them. Let’s take a closer look. What do we know about FSBOs? It is pretty much the same in all markets, and in all price ranges.

  1. They own a home.
  2. They want to sell it.
  3. In most areas, unless they have it priced below market or have some kind of special financing, they may be successful in selling it on their own but for far less.
  4. 90% of the serious ones will end up listing with an agent.
  5. Don’t forget, even if you don’t sell their house they may need an agent to buy their next house.
  6. Earn their trust and they may have friends or family they can refer to you.
  7. They may have leads that were interested in their home but did not end up writing an offer. These leads could go to you.

Go ahead, read number 4 again.

Do you think that this is a group that we should maybe pay a little attention to if our goal is to get lots of listings? SAY YES.

Yes, if done right. Yes, if done smart.

  • FSBOs accounted for 8% of home sales in 2015. The typical FSBO home sold for $185,000 compared to $240,000 for agent-assisted home sales.
  • FSBO methods used to market home:
    • Yard sign: 33%
    • Friends, relatives, or neighbors: 21%
    • Online classified advertisements: 10%
    • Open house: 21%
    • For-sale-by-owner websites: 7%
    • Social networking websites (e.g. Facebook, Twitter, etc.): 9%
    • Multiple Listing Service (MLS) website: 13%
    • Print newspaper advertisement: 3%
    • Direct mail (flyers, postcards, etc.): 2%
    • Video: 1%
    • None: Did not actively market home: 41%
  • Most difficult tasks for FSBO sellers:
    • Getting the right price: 18%
    • Preparing/fixing up home for sale: 13%
    • Understanding and performing paperwork: 12%
    • Selling within the planned length of time: 3%
    • Having enough time to devote to all aspects of the sale: 3%
  • 89% of FSBOs list with an agent
  • FSBOs usually list 20% below the market

In a hot seller’s market, it could be hard to get to a seller before they sell their house on their own. You may need to adjust your strategy to bring value and earn the seller’s trust early.

Here’s a fun story about Jesse Buckler, founder of ForSalebyOwner.com, and how he ended up selling his own house.

 

ACTION ITEMS:

  1. Search for and study different material that will help you understand the FSBO seller.
  2. Search for local stats on FSBO activity.
  3. Start thinking about how you would want to be approached if you were a FSBO.

 

Resources:

 


DAY 2

Tuesday Objective: What is a FSBO thinking? Get into their mindset. Where and how do you find FSBOs?

As a real estate agent, you already understand the challenges facing “For Sale By Owners.” Not only do their homes fail to sell quickly and for less money than they otherwise could, but the people who take this approach often wind up over their heads when confronted with the mountains of paperwork and legalese that licensed realtors deal with regularly.

So if selling a home is such a challenge for FSBO sellers, signing up these people as clients should be as easy as pointing out the fatal flaws in the process and asking them to sign on the dotted line – right?

Obviously, things aren’t quite that simple. Approaching a FSBO seller with an attitude of “I’m the agent, and you’re doing things wrong,” isn’t going to score you any brownie points with potential clients. Instead, it’s vital that you understand why FSBO sellers behave the way they do, as well as how your skill and expertise can help them to both satisfy the personal objectives that led them to attempt a sale on their own and actually get their houses sold.

In my experience, FSBO sellers tend to come in two groups:

  • The money savers, and
  • The “DIY-ers.”

By and large, FSBO sellers are listing their homes on their own in order to save money over traditional realtor commissions. The perception that FSBO selling is a better solution than working with a real estate agent can come from a number of different sources, including:

  • Sellers who have been burned in the past by lackluster agents
  • Sellers who have been advised by others that agents are lazy and don’t add value to the home selling process
  • “Zero budget” scenarios that require sellers to scrape every possible penny out of their sales

Regardless of the root cause of the desire to sell one’s home on one’s own, FSBOs have one thing in common – the desire to save money. These sellers tend to be analytical in nature and generally value cold, hard numbers over some of the softer benefits that an experienced agent brings to the table.

As a result, you need to tailor your approach to focus primarily on the financial benefits of working with an experienced agent. Using questions like, “If I could get you the net result you’re looking for, would you consider working with me?” or, “If you and I could agree on a commission that’s acceptable to you, would you be willing to talk to me about it?” in your FSBO scripts will help potential clients to recognize that you’re more interested in meeting their money-saving needs than in taking advantage of their situation.

Did you know our brains have three parts? It’s like an onion and at the core is what’s called the Limbic Brain. The limbic brain is responsible for our fight or flight ability.

It’s also what gives us the ability to recognize a telemarketing call in less than one second flat…isn’t that amazing?

We’re able sense things like that because of a limbic response that psychologists call “pattern recognition.” See, the limbic brain doesn’t actually “think.” Its main goal is to recognize pattern sand it controls most of your knee-jerk responses. In fact. it’s why you respond with a “click” to pesky sales calls.

Well, when you knock on a FSBO’s door, and they answer, what do you think is the pattern their limbic brain interprets?

Nervous, overly-polite, slightly loud, rushed smile, with a sales pitch…

…all this sends their limbic brain into something called “auto-rejection.” They can’t help it. You’ve inadvertently triggered it. And now they have to respond to it.

Yet, what if I told you there’s a super simple technique you can follow, that while seemingly silly, will short circuit their auto-rejection and actually, make them unconsciously open up to you?

…all WITHOUT you having to learn new scripts, dialogues, or some other unnatural way of talking that gets you all flustered on the spot.

Instead, here’s how to just be yourself and connect with folks easily and naturally:

Step 1 –Use “Pattern Recognition” to Trigger Success! Rather than the typical approach, that instantly triggers “auto-rejection,” use pattern recognition to your advantage. It works over the phone or in person.

In this example we’ll talk about door-knocking because it’s a proven fact that door-knocking gives you the HIGHEST PROBABILTY OF SUCCESS with the lowest likelihood of rejection. Here’s how to do it…

When you drive up in front of the FSBO’s home leave your car running, the driver-side door open, and your radio playing. If you can’t leave the door open have your windows down, with your radio just loud enough, so you can hear it while you’re at the FSBO’s front door. This sets the tone. What you’re doing is signaling to the FSBO’s limbic brain that you’re leaving in a few seconds, so they’re not feeling trapped or pressured.

Also, Have a cup of coffee in your hand along with the 3-ring binder I’m going to tell you about in a minute. Then when they answer the door take 1½ steps back. This gives them breathing room, releases any initial tension, and triggers a subtle ‘you’re leaving’ feeling that actually pulls the prospect toward you.

Finally, Here’s your last limbic brain relaxation technique: Dress fashionably casual…no jacket…no tie…with rolled up sleeves. Picture the entire scene.

With these simple moves you’re firing off a series of relaxation chemicals inside the FSBO’s brain that will gently open them up to you.

It says to the FSBO:

  • this person is relaxed.
  • and comfortable with themselves.
  • so I can feel comfortable too.
  • plus they’re not staying long.

Make sense?

You effectively disable their auto-rejection sales alarm and they’ll actually open the door ready to find out why you rang the bell. It works because you trigger a series of patterns they recognize as safe, comfortable and relaxed. So, again with these simple moves, you’re 90% of the way to having a meaningful conversation.

Step 2 –Offer Real Meaningful Value to FSBOs

FSBOs will gladly talk with you, ask questions, and listen closely, all while being extremely pleasant with you…as long as you’re providing value. What causes a FSBO to bristle up and become defensive is when they can smell what I call “commission breath.”

You know what I mean. We’ve all experienced it dozens of times. The salesman races up with a big fake grin on his face, sticks out his hand and gleefully asks, “How are you today?” His tone sounds like he just drank 17 cups of coffee and repeated 12 affirmations to himself in the bathroom mirror right before greeting you… That’s commission breath!

So with the FSBO, or anyone else for that matter, your tonality and approach is critical. You’ve got to tone everything down into a calm assertive energy that conveys service, value, and an offer to help them that feels sincere.

 

Where and how do you find FSBOs?

Once you successfully find FSBO listings create a system for keeping this pipeline full. You may find that taking a different route home each day allows you to find yard signs. Maybe looking for FSBOs on Facebook for 15 min/day keeps prospects coming in. Whatever your system, keep doing it even when you’re busy. You need to be wearing your CEO hat all the time. Here’s a few other ways to look for FSBOs:

PAID SOURCES:

  • theredx.com
  • landvoice.com
  • Pay someone to find FSBO listings

FREE SOURCES:

  • FSBO websites
  • Driving around desirable subdivisions or your farming area
  • Newspaper classifieds
  • Facebook Groups
  • Zillow For Sale By Owner

Find the homes that are underpriced. If you can raise the price so that they still get the same amount in the end, hiring a Realtor who will handle everything will become much more appealing.

That won’t be the case in every instance. You will find some FSBO homes are overpriced. Don’t approach those the same way, because it obviously won’t work. It’s best to leave those alone- save yourself the time trying to convince them to lower the price and haggling over it with them.

If you can approach them and tell them honestly that you believe their home can sell for $30,000 more than they have it listed for, they have less to lose in signing. Go in confident, show them why you believe they can get more.

 

ACTION ITEMS:

  1. Research the FSBO mindset. Check Youtube, NAR and any other resources.
  2. Ask friends and family to consider selling their own home. Ask them questions that would help you understand a FSBO.
  3. Start looking for FSBO properties. Identify the most valuable resources that have the most accurate data.

 

Resources:

 


DAY 3

Wednesday Objective:  The Dos and Don’ts of FSBOs

Most agents are rude to FSBOs. No-one likes to work with someone who is rude. So, when you approach the FSBO the way that most agents do, you will destroy any chance you have of listing that FSBO.

By showing a genuine interest in helping them, even when you have nothing on the line yet, you make yourself standout in the best way. You will leave a lasting impression and get the listing.

According to the National Association of Realtors, 66% of homeowners in America who hire a Realtor, hire the first Realtor they meet. They aren’t interviewing 3 or 10 agents. They are interviewing 1, and so long as they don’t make a terrible impression, they hire that agent and get on with selling their home.

If you can be the first person to meet with and interact with FSBOs and are able to develop a genuine relationship with them, the chances of you listing that home down the road are pretty high. There isn’t much competition, so being first shouldn’t be that hard. Talk to top agents who have 50, 60, even 70 listings and very few of those are going to be FSBOs because virtually nobody focuses on them.

Those top agents and the ones prospecting all day are focusing on expireds- they are quick to get. FSBO takes a bit more time, but you will be one of the few, if not the only, Realtor pursuing those.

Microsoft actually did a study on sales and found that most salespeople will give up after the first contact. They hear a no and move on to the next prospect, never contacting them again. A small percentage will call a second time and by the third time around, 80% of your competition is gone.

Taking that extra time to follow up just a couple extra times can get you many listings

By the fourth contact 89% of salespeople give up, by the 5th and 6th contact they are starting to get to know you and by number seven you have top of mind awareness.

There are three things you can do to dominate the FSBO market in your area.

  1. First, provide value. Don’t call them up just trying to get their listing- offer a small thing of value to help them out with their property. Don’t put yourself in the same category as every other agent contacting them.
  2. Second, is to build a relationship.
  3. Third, is to follow up.

Mistake 1: Telling the FSBO they are stupid not to hire an agent. No one likes to be told they are stupid. In most cases, you will only offend them – and destroy your chances of getting the listing.

Mistake 2: Not showing the FSBO how you can get them more money. This is crucial to getting the listing.

Mistake 3: Not following up. FSBOs take time to convert. You have to keep following up until they list with you.

 


DAY 4

Thursday Objective: Marketing Action Plans; Value – Customer Service – Net More

Salespeople call and get to their pitch quickly: Are you ready to list with me? Are you ready to hire an agent? Are you ready to turn this over to a professional?

That isn’t going to get you the deal.

You have to approach things differently. Make it about them, getting them more money, taking the work off their shoulders- the contracts, paperwork, stress- and ending up with the same amount of money. Offer to help them out. This isn’t Cold Calling

As soon as you notice the FSBO enter the market:

The “Let me lend a hand” gift bag. Contains quart-size bottles of Windex, Mr. Clean, Murphy’s Oil Soap and a big pack of painter’s rags. Hand-write a note on your company stationary (add a photo of yourself to the stationary (NO Business Cards! No envelope – just fold text-side out, and stick it among the bottles).

The note should say something like, “Believe me, I know how much work goes into preparing your house for the market, so I hope these little things are useful for you or your cleaning crew. Sorry to see you leave the neighborhood, but best wishes on your next home.”

Please remember, you’re dealing with someone with an attitude toward realtors, so NO SELLING, NO PITCHING! Buy large, grocery-size gift bags and hang them on the front door knob. ALWAYS use the same color bag and the same letterhead. This consistency also shows you’re a tenacious marketer.

It’s time to call. Now that you have dropped off your gift bag to them, you aren’t really cold-calling anymore, which will make this easier. Now it’s warm calling.

After they have received your gift bag, they know your name, and when you call to follow up, you are a familiar face so to speak. They may open up and vent to you about these other agents hounding them to sign, sign, sign.

Their interaction with you, however, is friendly.

You can talk about other people you helped that were going the FSBO route. You can sympathize with them about their bad experiences involving people wanting to buy their home. You can share other FSBO experiences that the sellers had a bad experience trying to go it alone, but you want to be sure to do it discreetly.

The point is to not be the pushy salesman that everyone else is being.

You want to have a genuine connection.

In order for the gift bags to be effective, you have to follow up. Not sure how to do this effectively? We show you how.

Joe is a great example. He dropped off 10 gift bags to FSBOs and he had one call him back. Then, he got on the phone and called the other nine prospects. They knew his name, so he was already off to a good start, and he was able to get another 2 meetings from his efforts.

He could have stopped at the one that contacted him and and had a 10% success rate. Instead, he took the initiative and reached out and ended up with a 30% success rate. The gift bags should be your foundation, what you use to get your name in their minds. But you must put in the time and effort if you want to see actual results. You want to become their consultant, not their salesman.

Your follow ups are the time to provide value. Show them that what you do is good and can make their lives easier. Offer some pictures for their listing, answer questions they may have about contracts. You aren’t going to do anything extreme, like listing their home in the MLS for free (Silvercreek office policy doesn’t allow MLS Only listings).

Helping a FSBO may seem crazy, but if you are helpful and show up at just the right time and show them you offer something of value, you may find yourself getting the listing.

To get different results, you have to be willing to do things differently. You hear that you need to cold call for hours a day to get lots of listings, but how many of us are doing that and getting the results we would expect from our amount of work? Probably not too many of us.

Continue with 3 more gift bags, one gift bag every two days for the next week.

Two days later:

The “Curb Appeal” gift bag. Contains 10 yard waste bags from Lowe’s or Home Depot. The Note is written to convey fact that curb appeal is the number one influence on a buyer’s decision. If you have teenage children or know some teenagers you can hire, offer to have two young persons come by on a specific day at a specific time to help with the yardwork such as raking the lawn and flower beds. The note can say that one of your community services is supporting teens and it’s become a win-win for home sellers and the teenagers. Ask them to text if it is NOT OK for the kids to come by during the chosen time slot. You should drop off the kids and pick them up later. You’re still not ready to initiate a conversation.

Four days later:

The “Break Time” gift bag. Contains cookies, crackers, nuts, popcorn, and a few pint bottles of orange juice. Note says they’ve earned a break so have a snack and enjoy the satisfaction of all their hard work – “hang in there, it’s gonna pay off!”

Six days later:

The “Open House” gift bag. A CMA summary sheet; 2 plastic generic Open House signs; a thorough Open House Tip Sheet. Do NOT run a full CMA, just a one-pager that recommends what their house should sell for. The Tip Sheet should be exhaustive to let them know what you would do should you run it.

Eight Days later:

What can you do differently than everyone else in your area? I’ve done free pictures and gained a listing for $180,000.

I’d drop off my gift bags, and had my assistant call offering free professional photos of their home. Of course, they said yes; what surprised me was that one simple call also got me the listing.

The referral I mentioned earlier actually came about similarly. My assistant called to offer the free photos, but she wasn’t interested since her home had just sold. She was impressed by the offer so much though that she referred me to her friend. That home listed for $430,000.

It’s quick and easy and it’s different. You go in, spend about 30 minutes there, take about 20 photos and get on your way. The point is that the pictures will be better than what they have, so they will likely be pleased and impressed, and you have met them.

They see you as a normal person, and it can be the start of a good relationship. In the chance that they list their house, odds are they will come to you for it.

If you don’t have the time to take the photos, and you have the option, have your assistant handle the photography for you. You can stop by, briefly meet the owners, introduce yourself, and then let them know your assistant will be by shortly to get the photos taken. That gives two opportunities for a great impression.

The script used for these calls is quite simple and it can work for anyone.

“Hi, I’m calling about the home for sale. Is this the owner? My name is Ben. I’m a realtor here in Meridian. I dropped off a gift bag to help you. I’m not calling you to list your home. I wanted to see if I could offer you free professional quality pictures of your home. You can use those pictures to list your house for sale by owner. Do you think that’s something you’d be interested in?”

This provides a great opportunity to meet for a brief time, get yourself in the door and get them some good quality pictures. Free Pictures won’t sell their house. But, it will get you the listing.

The majority of homeowners don’t know how to market their home. Some free pictures are not going to be the thing that gets the house sold. Good marketing is essential to selling a house. While some FSBOs get lucky and sell their home without any marketing strategy, majority will not. And even then, the home will probably sell for less than it could have.

As you gain a relationship with the seller you will want to gather information during your interactions. Here is a list of sample questions to incorporate into your calls and visits.

  • Have you been getting any more interest in the home?
  • Why do you think it’s taking longer to sell?
  • What’s the most important thing to you, timing or price?
  • Have you talked to any other real estate professionals and what has been their advice?
  • Have you considered what you’ll do if it doesn’t sell? If it doesn’t sell, will you take it off the market and stay in the home?
  • Have you thought about working with a real estate agent?

Now it’s time to get started. A couple of quick and easy steps will get you on your way:

  1. Print out 10 FSBOs from Zillow.
  2. Drop off 10 gift bags
  3. Keep those 10 printouts in a folder and carry it with you. That way, when you are at home watching TV, or have some free time, you can take a look through them and think about what you could offer to help them out.

Maybe you notice poor pictures; offer them some professional photos for free. Maybe you find you could raise the price, improve the marketing,etc.

When you call them, try to get them talking. Ask about a certain feature in the home, get them to open up, find out why they are selling. Get to know their home, compliment it, make them feel good about it.

If they decide to sell with a Realtor, they are going to go with someone who knows their home and who loves it and sees the value they see in it. There are tons of things to ask about every home, so you should never run out of things to ask about when you call.

If you do things the way they are laid out, you will see great success in you market. You can be the one to dominate FSBOs.

This is an example of one type of action plan to provide value to FSBOs. But there are more out there – look them up. Make sure the plans you look at focus on the value you add.

 

 

 

ACTION ITEMS:

  1. Research and study other action plans from books, videos, blogs and other sources like youtube.com and activerain.com.
  2. Pick a plan and own it.
  3. Start gathering and assembling your materials and take action.

 

Resources:

 


DAY 5

Friday Objective: Dialogs, Call and get the appointment

The approach to calling on FSBOs in this training will be to add value and follow up with a call. As you start the marketing plan you will be using some form of these scripts to progress the seller into a listing appointment. However, more success will come from a relationship building strategy.

When a FSBO starts for some reason or another they don’t use a Realtor. So, they decide to put their home on the market themselves, figuring it’s easy to sell a house and they will save a ton of money on Realtor fees. They list their home on Zillow, take some pictures, maybe have a couple showings. Realtors with buyers aren’t showing the home because there is no commission or they don’t know about it. Instead of saving money on fees, they likely are now staying in their home longer than they had wanted.

It will take a while, could be a matter of weeks, or months. You can use that time to build the foundation of your relationship by being helpful. When the time comes that they decide to hire an agent, chances are it will be you.

I recently heard about Mel Robbins. She wrote “The 5 Second Rule” that helps you get over all your fears. Let’s say you are sitting at your desk, ready to call the three FSBOs that you dropped off gift bags to.

Instead of focusing on your fears, you start counting backwards from 5 and when you get to zero, you pick up the phone and dial that first prospect. Once the first one is out of the way, the next ones will be easier.

You may also find that it helps if you stop focusing on what you can get out of it and focus on what you can do to help them. Find out what hurdles they have dealt with and see if you can remedy it for them- without concern for what you will get in return.

After you drop off your gift bag and start your follow up calls you will want to see if you can start to gather some information. This is also your chance to start building rapport, so prepare a list of questions to ask them, such as:

  • Have you been getting any more interest in the home?
  • Why do you think it’s taking longer to sell?
  • What’s the most important thing to you, timing or price?
  • Have you talked to any other real estate professionals and what has been their advice?
  • Have you considered what you’ll do if it doesn’t sell? If it doesn’t sell, will you take it off the market and stay in the home?
  • Have you thought about working with a real estate agent?

Here are some other scripts to try:

https://yesmasters.com/wp-content/uploads/2012/12/FSBO-SCRIPT1.pdf

 

ACTION ITEMS:

  1. Search out and start reading several sales books
    • Fanatical Prospecting
    • Spin Selling
    • Never Split the Difference
    • A Guide to Cold Calling
  2. Practice your dialogs with a dialog partner (a fellow agent, family or friend).

 

Resources:

 


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