Want To Rake In More Listings? FSBOs Hold The Key
Jay Thompson is a former brokerage owner who spent over six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
“That is a terrible idea. What’s the point?” That was my broker’s response when I ran an idea past him.
The point was to get listings. The idea was to conduct “FSBO seminars.” Yes, I wanted to teach people how to sell their home without using the services of a real estate agent.
Sounds counterintuitive, doesn’t it? My broker struggled to get past the image of a licensed real estate agent standing in front of a room full of people, giving them ideas, tips and resources to for-sale-by-owner (FSBO) their home.
“Well, I guess as long as you tell them what a horrible idea it is to FSBO, what could be the harm?”
“What if it’s not a horrible idea?” That was swiftly followed by a world-class eyeroll, a shake of the head and a “WTF is wrong with you?” look.
“Bet you a buck I get a listing from it,” I said.
He stuck out his hand to seal our traditional bet that was often offered when I ran nontraditional ideas by him. “Might as well pay up now; there’s no way this will work,” he mumbled.
“That’s exactly what you said the last time.” I walked away patting the wallet in my pocket, in case he forgot who won that previous bet.
This conversation — and the idea that spawned it — happened back in the 2005 era, in the midst of a crazy seller’s market in the Phoenix area. Homes were selling in hours, and bidding wars were raging, sending offers well over asking price. Buyers were waiving inspection and appraisal contingencies. There weren’t enough listings to satisfy buyer demand.
Sound familiar? It’s interesting how cycles tend to repeat. When houses figuratively fly off the shelves, many consumers get the idea that they can go FSBO and save on commissions.
Of course, you and I and our fellow real estate professionals know this isn’t necessarily the case. But your average consumer sees a home get listed, with offers streaming in before the ink on the listing agreement is dry. “How hard can it be?” they ask themselves.
Agents often fan the flames of FSBOs with their loud claims on social media about how many offers they get or how high over list they’re selling for. Heck, I’ve seen agents puff out their chest and proudly proclaim, “I sold it before the sign was in the ground.”
Who can blame anyone for thinking they can sell a home in these wild markets? Simple fact is, some can do exactly that.
As an agent in a nutso market (well, in any market), you need more listings. There are people attempting to sell their own homes — those are listings, just not yours. Yet, agents have been trying to convert FSBOs into listings since the dawn of time.
My thought back then and now is that we’ve got a perfect storm of low inventory, buyer frenzy and sellers sensing easy sales. It’s time to take advantage of that. With inventory starvation, you need to explore all possibilities to gain more listings. FSBOs are ripe for the picking.
But how do you get in front of potential (and actual) FSBOs? Whether you see a FSBO sign while driving around or you scour the sites where FSBOs list, the odds are overwhelming that a whole bunch of agents have already reached out to those owners trying to snag the listing.
There’s the age-old, “Hi, I have a buyer and would like to preview your home” tactic. Savvy FSBO-ers will see right through that line. There’s the “pop by” approach where you drop off some trinket with a catchy phrase that’s sure to capture the heart and soul of the seller, compelling them to reach out to you. There’s the data dump where you show FSBOs how much more you can get for their home. (Really? In this market? Maybe. But maybe not.)
So, why not try a novel approach? Be helpful. Actually assist the homeowner in the sale of their home without groveling for the listing. Maybe without even making a dime.
Pull a bunch of active FSBOs or people considering it into a room. Serve them refreshments (always keeping COVID sensitive of course). Stand up in front of them, and teach them what they need to know in order to sell their home.
You sell real estate for a living — you’re an expert at what they are attempting to do. If you don’t deliver a constant stream of sales pitch, if you don’t beat them over the head telling them what an idiot they are for going alone, if you actually offer solid advice, tips and tools for selling their own home, four things can happen:
- They will successfully sell their home. Just maybe to one of your buyers. And since you teach them how important it is to pay a buyer broker commission, you get paid, just like if you put your buyer in a brokerage-listed property. Maybe their home isn’t the perfect fit for your buyer, but some other buyer nabs it, and exits the next bidding battle that includes your client. Inventory in these markets benefits all — and FSBOs add inventory.
- They sit there in your FSBO seminar and have an epiphany, thinking: “Holy crap. This is way more work than it’s worth. We should hire a professional.” And here you are, standing right in front of them demonstrating your knowledge and professionalism, helping them, and even feeding them. They like you because you’re a likable, smart, helpful human. They are realizing they want to list. You’re now in the driver’s seat to get that listing.
- They try using the knowledge you share, and they fail. Then they list with an agent. Quite possibly the agent that was sharp, friendly and helpful.
- They do nothing. They don’t FSBO, they don’t list with you or anyone else. They’re looky-loos, browsers, “only in the beginning stages.” But you have their name, phone number, email address and physical address, and you’ve met in person. A lot of people would call that a “lead.” A smoking hot lead. Or you could call them an acquaintance with an interest in real estate, and you can then nurture that interest, and the relationship, and be at the ready when their time to sell comes. They may very well tell their friends, family and co-workers how smart, friendly, honest and knowledgeable you are about selling real estate.
There are no losing scenarios in these situations.
Finding potential FSBOs
Where do you find the existing and potential FSBOs to attend your seminar? The same places you find them now. Drive-by signage, sites with FSBO listings. Smart, effective online advertising.
The ad copy isn’t hard: “Learn how to sell your own home from a professional that has sold X homes in the last Y years.” “Thinking about selling your own home? Learn how from a professional. No cost, no obligation, free snacks.” There are endless possibilities.
Where do you hold a seminar? Just about anywhere. Your office conference room. A title company or attorney’s conference room. Rent a movie theater auditorium. Find a gazebo in a park, and have someone cook burgers while you teach people the in’s and out’s of FSBO-ing. Do it virtually via Zoom.
What to say
So, you have three, 10 or 30 people interested in attending a seminar. What are you going to tell them?
The truth. Talk about where they can and can’t “list” their home. Talk about the advantages of being in the MLS. Tell them all about contracts, addendums and disclosures. Make sure to cover the liability issues of failure to disclose.
Discuss the contractual timelines, inspection periods, contingencies. Help them understand the importance of great photography, listing copy and video. Help them understand different marketing aspects. Pour over the homeselling process.
Impart as much honest info as you can. Selling a home is like drinking from a fire hose, so turn on the firehose, and let them try to drink from it.
Consider bringing an attorney who can discuss legal liability or a title pro to discuss closings and docs. Let them pay for snacks. What’s in it for them? The same thing that’s in it for you — potential future business.
What not to say
Despite the fact you may feel anyone that would go FSBO is insane, your job here isn’t to shove listing with a pro down their throat. Keep the personal opinions out of the discussion.
If you start preaching and banging the “only way to do this right is to list with me” drum, your attendees will see right through you. They aren’t there for a sales pitch — they are there to learn.
The beauty of this methodology is that while they learn about selling their home, they also learn about you and how great you are at selling real estate. That’s the ultimate goal: Help them understand all you can do for them and their friends.
Don’t discourage them from FSBO-ing. Simply help them understand the pros and cons of FSBO-ing, and of using a pro. Make it about them. The stuff about you will fall into the natural conversation.
My first FSBO seminar had eight attendees. One listed with me that evening. A few months later, another sent their adult child to me as a buyer. Three years later, one attendee who successfully FSBO-ed their home called us to list that very home when he got transferred.
I don’t know if it was the seminar or the other times we reached out just to make contact that spurred him to call. I suspect it was a bit of both. I never heard a word from the other five attendees.
Every other FSBO seminar we held had basically the same result. Not every one resulted in a listing. Some got us multiple listings. The majority of listings came from people who tried FSBO-ing, and somewhere during the process, they threw in the towel and called us to finish the job. Most seminars landed at least one referral to family and friends.
I also met a ton of cool people, sharpened my marketing and speaking skills, and formed some great relationships with other agents, title reps, lenders and lawyers — along with some smart, fun consumers.
Oh, and I won a dollar from my broker.
Jay Thompson is a real estate veteran and retiree living in the Texas Coastal Bend, as well as the one spinning the wheels at Now Pondering. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. “Retired but not dead,” Jay speaks around the world on many things real estate.