For Sale By Owner (FSBO) Marketing Guide
With the growth of online media such as owner’s websites, online classified engines, and online magazines, along with traditional print media, tracking down all of the FSBOs in your area has become a full-time job in itself. A FSBO’s yard sign and nondescript ad amongst thousands of ads on Craigslist is easily lost.
Methods for Identifying FSBOs in Your Area
To find those FSBOs, here are some valuable tools to sift through the ads and filter out the nonviable properties.
ArchAgent’s FSBO Data Service
The Arch FSBO Listing Service identifies and delivers properties to you that have recently been advertised. Arch uses a multi-step process to uncover and add missing elements so that you have accurate names, phone numbers, and postal addresses. Enter your desired ZIP code, and the advertised FSBO listings are delivered to your e-mail daily for up to a 50-mile radius (maximum 250 square miles; results can be narrowed down to a minimum of one square mile).
Newspapers and Magazines
Some people still use print media as their first option when advertising, but rising costs of placing classified ads in the large metropolitan papers are preventing some FSBOs from using this. Regularly check smaller local papers, especially if you live in a suburban area – advertising rates are often cheaper, and the distribution area is smaller.
The new starting place for owners to place their homes is online. From major national FSBO websites to local/regional sites and online classifieds, this is where people are placing their listings. Most yard signs come with free website listings that owners are happy to take advantage of. Finding all advertising sources is becoming difficult since new sources spring up every day. The major sites are:
Drive Your Local Neighborhoods
Always keep a pen handy, and jot down addresses and phone numbers of FSBOs that you uncover while driving in your area. You may even identify them before they have chance to place an online ad.
Finding FSBOs Before They Advertise Alone
Find the seller before they decide to sell on their own. Place classified ads in your local papers advertising special reports. Your Arch subscription includes several FSBO ads and fulfillment reports. For example:
FSBO or Realtor: Making the Right Decision Will Save You Thousands! Call 800-XXX-XXX ext XXXX, 24-hour recorded information.
Being confident, upbeat, and persistent is the key to successful phone contacts, and it’s still the fastest, least expensive way to contact leads. There are several scripts available on this website to assist you. Also investigate automatic dialing systems such as ArchAgent’s PowerDialer to make your prospecting time more efficient.
Designing a powerful Call-to-Action mail piece is an effective way to generate phone calls from interested sellers. Many people who list their home without assistance are unaware of the pitfalls that they will encounter. Developing a drip campaign, designed around the progress of FSBOs, can yield substantial results. It is also important to develop a mail piece to send to people you have already spoken with. It is the most effective way to get your name, phone number, and web address into the lead’s home.
Always use your Arch Powerline™ Service to help generate a better response from your mail. The owner often wants to gather information on a listing with an agent before speaking. Advertising 24-hour Recorded Information avoids their natural hesitation and makes you the first person to know when a current FSBO is about to become a Just Listed.
Mapping has become one of the most beneficial methods to prospectors who continuously market towards private sellers. Personal visits to FSBOs carry the most impact. First, identify available properties in the direct markets in your desired price range. Then, place the owner’s address into an online mapping service or your GPS. Many agents schedule previews of the property, visiting a different neighborhood each time. Other successful agents incorporate this data into their daily routines by stopping by a property while running various errands.
Profiting from FSBOs
At some point in every agent’s career, they will prospect FSBOs. 90% of agents abandon FSBOs due to unexpected low conversion rates and frustration. Most agents do not anticipate the amount of patience and resiliency required to successfully convert FSBOs. It only takes a few FSBOs to rudely tell you they are not interested and then see a competitor’s sign in their yard a week later to realize these leads require a different set of rules. If you adopt the right mindset and learn the proper techniques, you can capitalize on a highly-desirable market and significantly increase your business.
The FSBO Mindset
It is imperative that you demonstrate patience and resiliency in your approach to successfully market to FSBOs. Appreciate their mindset by taking a walk in their shoes.
The homeowner has decided to sell on his or her own. The owner thinks: it’s not that difficult to sell a home, I’ll save thousands in commissions. They invest a few thousand dollars fixing up the property, visit the local home improvement store, and for a few hundred more, they purchase a FSBO website and yard sign kit. They run a newspaper ad in the Sunday real estate section. They spend the time to stage the home and take dozens of pictures. The homeowner spent dozens of hours and thousands of dollars on this project, and the ad hits. Fifteen agents call before 10 a.m., and they all say that they are taking a survey or they have a buyer. They immediately segue into asking for the listing. After having just spent a significant amount of time and money preparing their home to sell themselves, the owner is annoyed that full-service real estate agents are calling.
A likely scenario when the agents call:
The Agent Mindset
You’ve got a list of FSBOs. You’re in a positive mindset. You’ve said some affirmations and role-played your script. You firmly believe, and accurately so, that you are helping the FSBO by increasing their net take-home money. You make your first call. The odds are the FSBO reacts negatively. If you put yourself in their mindset, you realize that if they wanted a real estate agent, they would have called one. After all, they want to see if their advertising and hard work pays off. Since you were treated poorly, your mindset goes south. After several failed attempts, you decide prospecting FSBOs is not for you.
Seasoned agents use the FSBO’s mindset to their advantage. They know the seller is going to be resistant initially, so they expect a negative reaction. They know they must first earn the FSBO’s trust, so they build a relationship. They know the FSBOs resistance lowers over time, so they are persistent.
Points of Differentiation: Know Your Facts
Homes listed by a full-service agent net more money for the seller than if they sell it themselves. Conveying the facts assists you in building trust with the owner and inspires them to make a better decision (for you and the seller).
According to the NAR Profile of Home Buyers and Sellers:
Additional reasons FSBOs do not net as much money on their home sale or are as effective as a professional include:
Identifying The FSBOs Personality Increases Your Conversion Rate
You have a greater chance at converting the lead if you can identify the personality of your prospect and adapt your presentation to fit them. This approach generates greater results versus approaching all FSBOs the same. The four archetypal personalities are:
Of these four personalities, the vast majority of FSBOs are analytical with the remainder being dominant. Analytical types possess a primary motivation to save money. Statistics prove that homes sell for 27.5% more if listed by a full serviced agent. Even after paying your commission, the seller nets more money.
Dominant types believe they can sell their own home easily. They do not understand or appreciate the work that goes into a home sale from listing to closing. Selling a home is not just about marketing the property. Holding the sale together after acceptance is more challenging than ever.
The analytical FSBO requires that you show them physical evidence of why you will increase their net on their home sale. They are likely not going to list with you immediately as they are slow to make decisions. You must exercise patience.
The dominant FSBO believes they can easily sell their own home. They also possess a secondary motivation of saving money. They likely made the decision to list FSBO as an experiment to see if their home would sell on its own. Dominant personalities represent the listings you may be able to obtain on the initial meeting or early in the process.
Properly Gauging and Increasing the FSBO’s Motivation
Regardless of the product being sold, all successful salespeople are efficient. Consider the efficiency model: efficiency = effectiveness/economics.
Efficiency is the key element to your real estate success. If you list a home with a motivated seller and price it well, you will sell it quickly with minimal marketing money and time invested. Conversely, if you list a home with an unmotivated seller and price it too high, you will wish you had not even taken the listing.
You may have either spent considerably more money on your marketing or time pacifying the seller relative to your net commissions, or you simply never sold the listing. You must properly gauge the FSBO’s motivation so you do not become susceptible to inefficiency. To properly gauge the prospect’s motivation, you have to ask the right questions. Saving money is the primary motivation with an analytical FSBO. Address return on investment in a quantifiable way.
A Step-by-Step Process to Converting FSBOs into Listings
Some FSBO strategies instruct agents to call the FSBO one time, the moment their advertising comes out, with the belief that the first agent to call the prospect has the best chance of earning the listing. The approach coerces the FSBO into a decision to list with the agent on the first call. If the FSBO does not list immediately, the agent disregards the lead and moves down the list.
This strategy incorrectly assumes that the FSBO lacks sufficient motivation and is a waste of any additional time or effort. After consulting with hundreds of agents who have used this method, it’s clear that this method, for most agents, does not produce results.
The agents who have used this method report that they converted one FSBO out of twenty. According to the NAR, over 72% of FSBOs eventually list with a full-service agent. Why should you be satisfied with 5% of the market share? To increase your conversion rate, embrace a multi-step system: