Dealing with FSBOs
Filed Under: Quick Hit
Dow Jones’ MarketWatch recently published 6 tips for those planning on selling without a real estate agent. Aside from the basics, (staging it properly, having the proper support lined up, etc.) they gave the following advice:
[ask] at least three agents for a free comparative market analysis before setting an asking price — as long as you’re prepared to hear their pitches on why you should enlist their help to sell the home
This struck me as a little unscrupulous, especially if you have no desire of working with any of them. Leading people on in any circumstance is unfair.
How would you deal with this situation?
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11 Comment(s)
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- From FSBOs and REALTORS® and Reality : Greater Phoenix Metropolitan Area Real Estate | Mar 23, 2007
housereview | Mar 21, 2007 | Reply
I dont think you should intentionally try and deceive anyone, for your own ends. Agents have to earn a living too.
Mind you if they are offereing a free service, there will inevitably be some folk that want to abuse that.
Christoph Schweiger | Mar 21, 2007 | Reply
Joel,
In every industry where something is sold there is somebody giving the penny pinching consumer advice on how to beat the “system�.
The car sales professionals (yes and not all of them are sleaze balls) have to deal with the consumer who goes to the dealership to test-drive a car to buy it later from a car-buying service or from a private party. Does the car buyer reveal that information beforehand? Of course they don’t.
Do consumers ask financial planners or stock brokers about their opinion about a mutual fund to transact later on an online trading platform? Of course they do.
In our industry it is the For Sale By Owner who is leading on the REALTOR®.
This happens all the time! But what Piper Nichole does not realize is that she mislabels good advice as sales pitches. Being one on one with a client, having the opportunity to share information, consult, and giving advice to a consumer who needs to sell a home, will open up the door for the opportunity to get that listing. If the REALTOR® does the job, the consumer will never perceive the advice as a “sales pitch�. What ever is sold on this planet, will only get sold if value exceeds price. Fear of loss and hope for gain will control the rest of the consumer’s decision-making process.
Now will you be able to win every FSBO over to list with you? Of course not, however at least I had the opportunity to earn some bodies business.
My advice to other agents is not to get worked up over situation when loosing a listing – this is just part of business. Move onto the next opportunity…
There is just to say that I have not seen the disclaimer *(In Theory) anywhere on her book and “Hassle Free Closings� rarely happen……..she should know that as “trained� and licensed real estate professional.
Arlingtgon Virginia Condos -- Jay | Mar 22, 2007 | Reply
If one has already decided in advance to not use a realtor, then it is wrong for them to take up the realtor’s time unless they state at the outset I’m going FSBO but would be grateful if you could send me a CMA of my home please. Outside of that it is unethical.
I have people using my tools all the time who are working with other realtors. I can only hope they just don’t understand what they are doing and try to assume they are not that lacking in their integrity….
jay
Larry Morris | Mar 22, 2007 | Reply
I have it hapen all of the time in the mortgage business. I am constantly rate shopped. But a loan is much more then just the cheapest rates and fees. If I am able to educate them and walk them through the process I will usually get the loan. At that point they trust me. But others will use my advice to go shopping for a lower rate. That says more about their chahracter then of my business modle.
My advice is to stay true to what you know and do best and not let the flakes move you. Who knows, if they can’t sell their home and were impressed by you maybe they will give you the listing.
KIP | Mar 22, 2007 | Reply
I strongly identify with Chris. I am not a realtor, but it is easy to tell the previous comments come from those in the real estate business. Chris takes an approach that recognizes consumers have freedom of choice.
What is wrong with a consumer exploring all their options? Maybe someone might change their mind in talking with a realtor and realize, hey, maybe I do want some help.
Or maybe they set out intending to use a realtor, but then decide it’s not the best thing for them. Where is it written that you should only work with people you know will use your services? (and if you can explain to me how to figure that out, I would love to attend that sales seminar for use in my own business).
People gravitate towards those who are helpful, open, and honest with the information they have to offer others. The more people you have contacting you, using your website tools, etc, the better.
Should homeowners give you all the information upfront? Maybe yes, maybe no. But do you always give everyone you deal with all the information upfront?
Good discussion by the way!
Marc Brinitzer | Mar 22, 2007 | Reply
As always, it’s an issue of honesty and integrity. There is a cost associated with every good or service. Lying to get something for free is unethical.
The consumer can easily solve that problem by telling the agents up front that he intends to try and sell the home himself. The agents then have the opportunity to decide or not to invest the time helping the consumer in the hopes of having an opportunity to list the property later. I certainly would make that investment Kip. It’s the smart business move.
No one likes to be tricked. The consumer should just ask herself how she would like to be approached if roles were reversed.
Bryant Keefe | Mar 24, 2007 | Reply
A FSBO is a future listing for a good salesperson and the act of calling three agents for Free CMA’s is part of process of accepting that they will most likely need an agent. By calling agents they acknowledge that they lack the skills required to properly price their homes. I used to prospect FSBO’s (I am retired from real estate sales) and one of the many value added services I offered was a Free CMA. Calling agents for CMA’s is no better or worse than any other form of research a homeowner can do. For many agents the Free CMA is a classic prospecting technique.
If an agent does not have the skills to ask questions, learn and sell to these people then that agent should probably find a new career. The average FSBO lasts 3 weeks (my experience) and then seeks professional services to market their home. The success rate on selling your own home is quite low. This call 3 agents advice has been around for years and demonstrates that there really are no new ideas in the market for selling homes.
A side benefit for a new agent is these Free CMA’s are a chance to practice and gain real world experience.
Cheers,
Bryant Keefe
for sale by owner center | Mar 28, 2007 | Reply
Agents, should be thrilled by the suggestion made by marketwatch. It gives them to opportunity to show their real value in the transaction. Would agents rather that no FSBO was willing to talk to them at all? Don’t think so. If you advertise “FREE CMA” everywhere this is the designed to get that opportunity to communicate with a potential seller, not a guarantee that they will use you.
Lenders experiance all day long with rate quote shopping… which is encouraged by the REALTOR community, don’t hear them complaining about providing free rate quotes, free credit reports, to potential customers.
This is again, another example of agent who seem to think they are “owed” something just because they are a “REALTOR” and provided some information.
Chris | Mar 29, 2007 | Reply
I leave the pricing issue towards the end of my listing presentation. If I get a feeling that the people are just shopping around, I don’t even spend much time at it. Let them go to zillow…
Shaun McLane | Apr 1, 2007 | Reply
I don’t see a problem with being asked for a CMA. Actually, I welcome it. If you are confident in yourself, and trul believe you are a benefit to someone trying to sell their home, you shouldn’t have much trouble explaining this to a seller, and convincing them they would be better off listing with you then doing it themselves. Even if they decide to take the FSBO route, if your listing presentation was strong, you can almost always expect a call from them in 3 to 4 weeks for your help. If anyone has a FSBO asking for a CMA abd they want to refer them to me, be my guest.
Art Raby | Feb 22, 2008 | Reply
Help Agents Turn FSBOs into Sales
Consider the math: According to a leading FSBO lead service, there have been nearly 260,000 For Sale By Owner listings nationwide in the past six months alone. Yet, says the National Association of Realtors, only 12% of all home sale transactions are completed without a real estate professional.
That means the majority of FSBO sellers ultimately use the services of an agent-offering a great opportunity for those agents who can turn FSBOs into clients.
The overwhelming reason sellers go the FSBO route is to avoid paying a commission. It is little wonder they become irate when called by an agent they had no wish to talk to-and little wonder that few agents want to face a hostile seller.
But there are ways to help your agents build rapport with the most resistive FSBOs and the savvy broker will recommend tools to help them do so. The key to success is to approach the FSBO offering something of high value.
Among the most effective is a new strategy we have developed at Find A Buyer, Inc. Our system markets HOMEBUYERS as a commodity to home sellers. When the agent enters their homebuyer’s criteria into the system it will be matched with the FSBOs in the homebuyer’s market area. This changes the scenario, the agent is not asking to list the home the agent is asking the FSBO for an opportunity to show their home and if an offer is accepted to pay the broker a 3% commission (not bad when the average split is getting lower all the time).
The broker that uses this system will have a great advantage over there competition.
· More of his agents will be working with FSBO
· When an agent sells a FSBO the commission is not split with the competition.
· The FSBO’s home is taken off the market for years.
· If the FSBO does decide to list, he will most likely list with the company that showed it the most.
Reverse Marketing…sell the buyer.