Some sellers enter the real estate market thinking they’ll save money by going For Sale By Owner (FSBO), especially in a market where homes are practically selling themselves.
FSBO sellers miss the mark when it comes to the DIY approach, especially when it comes to saving money. In fact, working with an experienced, local agent can result in sellers realizing a greater profit than they’d be able to get selling their home on their own. But, this information doesn’t come as much of a surprise to you. So, let’s dig in about how you can find current FSBO sellers who you may be able to convert to clients, and learn how to win over sellers who are thinking about taking the FSBO route.
How to find current FSBO sellers
You can start by reaching out to current owner-listed properties to turn sellers into clients. You can find existing FSBOs via a simple search on Zillow or Facebook Marketplace, or by simply driving around your area and searching for FSBO yard signs. You may also consider hyperlocal marketing to reach both current FSBO sellers and those who are on the fence.
Although FSBO owners may initially be put off by your direct approach, you can use the following information to educate them in a non-pushy way about why it’s to their advantage to hire an agent. Being proactive can be a win-win: You turn sellers into clients, and your clients make more money on their home sales.
FSBOs sit longer
The longer a home sits on the market, the more likely a potential buyer is to pass over it even in this hot market. The most obvious reason houses don’t sell is poor or nonexistent marketing. FSBO sellers can list on open platforms such as Zillow or Facebook Marketplace, but they’re locked out of using their local multiple listing service (MLS) if they don’t work with a licensed real estate agent. This means their home is seen by a smaller buyer pool, as most buyers have certain criteria set up in the MLS that allows them to receive automatic email notifications when a property pops up that fits specific parameters.
FSBOs sell for less
On average, agents sell homes for 33% more than owners who list their home as an FSBO sell their homes for. According to the National Association of Realtors, many sellers who list their homes as FSBOs eventually sign on with an agent, and 91% of sellers are ultimately assisted by a real estate agent when selling their home.
And when you consider that even sellers who list their homes as FSBOs may still end up paying for the buyer’s agent — usually about 3% of the purchase price — they often don’t end up saving as much as they initially thought they would.
It’s easier to sell
FSBO sellers often overlook the extra services agents provide — such as marketing, photography, a spot on the MLS, negotiating price and seller’s concessions, providing contract and paperwork assistance, hosting open houses, and creating signage and flyers — not to mention fielding multiple phone calls and inquiries from potential buyers and buyers’ agents.
Agents can help sellers determine which renovations to make, such as to the bathroom or kitchen, that will help the house sell for more money and/or sell more quickly. A good agent may also be able to line up a seller’s closing date with the date they’re allowed to take possession of their new place. Explaining to homeowners how you’ll save them money and headaches is a great way to turn sellers into clients.
Agents protect sellers
Agents work with real estate matters every day. They’re familiar with the laws and potential legal issues that may arise if mistakes are made during any step of the negotiation or transaction process. Having an experienced agent helps sellers feel at ease. Plus, agents are required to carry errors and omissions insurance, which covers many potential mistakes and protects seller clients; FSBO sellers don’t receive this protection.
Agents have expertise and experience
You can’t assign a dollar amount to the expertise and experience agents bring to any real estate transaction. Just like people can certainly do their own taxes, cut their own hair or trim their own trees, they can certainly sell their homes without hiring a licensed, knowledgeable, professional real estate agent. But there are far more advantages to hiring a professional, who can usually do it faster and better, may save sellers from making mistakes, and often even save them money.
These are just some of the things you can tell sellers who are wondering if they need to hire a real estate agent in today’s hot market. By tapping into your extensive connections and established expertise, you can be a major influence to sellers who are thinking about listing without an agents help, and, if they hire you, a major asset. So, don’t be afraid to share these benefits with them, so you can turn sellers into clients.
Luke Babich is the Co-Founder and COO at Clever Real Estate, the nation’s leading real estate education platform for home buyers, sellers and investors.
