The for-sale-by-owner (FSBO) sector of the market represents an untapped resource for some agents. For those bold enough to view them as opportunities rather than losses, FSBO homes can be a lucrative niche.
Before cold-calling your first FSBO listing, it’s good to understand the motivations and outcomes for most sellers who opt for this route.
Quick Facts About FSBO
First, the FSBO market is relatively small. The National Association of Realtors (NAR) reported at the end of 2017 that FSBO sales made up just 8 percent of sales for the year, which matches the share of the previous two years and is the lowest share on record since 1981.
Among those who do go it alone, 40 percent know their buyer personally. In these cases, sellers often receive 100 percent of the asking price, and their home sells within a week.
On the other hand, 60 percent of FSBO sellers do not know their buyer. Their home may sit on the market longer, and they may not get their asking price.
The overall median price of an FSBO home last year was $190,000, compared to the median price of homes sold through an agent, which was $250,000.
Reasons Owners Sell Their Own
The top reasons sellers list for choosing to sell without a real estate agent, according to NAR, are:
• wanting to avoid paying a commission—43 percent
• selling to a friend or relative—23 percent
• a buyer has contacted them directly—10 percent
Where to Find FSBO Listings
Yard signs are an obvious way to find FSBO homes, so agents should always be on alert when driving through the neighborhoods they serve. However, many FSBO sellers are listing their homes online. Some are turning to generic sites such as Craigslist and Facebook, while others are honing into the real estate marketplace with more directed sites:
A few to follow are:
How to Approach FSBO Sellers
Once you’ve found some FSBO homes, do some research. Check to see if their listing price is reasonable.
Before picking up the phone, be sure to have a script prepared. Introduce yourself and ask them how everything is going with their sales process. Ask them how many showings, open houses, and offers they’ve had.
Be prepared for these owners to be disinterested. Some may even hang up the phone. While some may simply believe they can sell the home on their own and avoid paying commissions, others may have had a bad experience with a real estate agent in the past. It is also likely that you are not the only agent reaching out to them. Building rapport with these sellers is critical. Try to find a personal connection.
What You Offer
Homeowners choosing to forego working with an agent may not understand the value of a real estate agent. Compliment them on their marketing efforts thus far, and let them know what you can add. Not only can you broaden the property's exposure but you can also field phone calls, so they are not answering endless phone calls from potential buyers on Craigslist who are not truly invested in purchasing a home and may not show up for their showing.
Warning on Do Not Call
Real estate agents should be aware of Do Not Call Registries and abide by these rules. Calling an FSBO owner to discuss the possibility of earning their business would be a violation if they are on the registry. In this case, a postcard or brochure is a safe approach.