Top 10 Questions for FSBOs
Most For Sale by Owners believe it is easy to sell a home: all they need is a sign in the yard, an ad in the paper and an open house. Sometimes they are even right! However, more often, using a real estate agent will "net" them more money because of the myriad other marketing actions we take and the wide reach of the mulitple listing service (MLS) for qualified buyers willing to pay market value.
Furthermore, we all know that just getting a contract and having someone who wants to buy doesn't always mean the house is going to close. There are so many things that can derail the agreement along the way, losing the seller precious time, since his house has been withdrawn from the market.
The good news for you is two-fold. History has shown that a large majority, often as high as 80%, of FSBOs will end up choosing a real estate agent and listing, usually within 6-8 weeks. If you have developed a system to build relationship and have created value for them, most hire an agent after they have come to their senses.
The second bit of good news is that the media campaign and education that the National Association of REALTORS® has undertaken in the past few years is working. According to the 2006 NAR Profile of Home Buyers and Sellers, 12% of homes were sold For Sale By Owner last year as compared with 18% in 1997, 16% in 1999, and 14% in 2003. Traditionally bargain hunters or investors that don't want to pay top dollar are the majority of prospects for the FSBO. Another shift noted in the study shows that the percentage of sales to people they already knew has gone up considerably from 20% years ago to about 40% last year.
So where does this leave you? With all sorts of opportunity! As the For Sale by Owner begins to appreciate the value of your services, from your marketing, to your knowledge of the paperwork and disclosures, from your ability to bring qualified prospects and to the tools to give availability for showings all the time, the complexity of what it takes begins to dawn on them.
Most agents find this is when the conversion starts happening. The FSBO experiences one or more challenges that cause them to question their ability to get the job done and realize you have value. Over 50% of FSBOs indicated they would NOT sell on their own in the future. Hallelujah!!!!!!
Start out by developing a handout or a cheat sheet of these problematic areas. By giving them your list, they may start to see what they didn't know or think to consider.
The Top 10 Questions To Ask a FSBO
(1. When do you want to be moved and do you know how long it will take to complete all the steps after you have found a buyer?
2. What data have you used to set the price and how much negotiating room have you factored in?
3. Do you know the difference between pre-qualified and pre-approved and what a Conditional Loan Approval letter is?
4. Do you have a copy of the Lead Paint Disclosure form?
5. Do you understand all of the closing costs that you will be expected to pay?
6. Do you know which other environmental disclosures, such as hazardous waste and Superfund sites, that would apply to your situation?
7. Do you have a CLUE report available?
8. What identification or information will you get from strangers that want to see your home?
9. Are you available to show the home most of the time?
10. Do you know where to run ads and how to word them to get the best response?
Just use the list as a starting point to adapt in any way that would suit your market.
Brainstorm and insert questions for disclosures or processes that are unique to your marketplace or state. Or there might be other challenges you know are hot buttons. This becomes valuable because you have prepared yourself and feel self-confident in the value you bring.
A strategy and system to work the FSBO market is important. The more automated you make it, the more effectively this will become a foundational part of your business that you can count on, month in and month out. This is a reassuring if you typically have production that looks like a roller coaster track.
Even if your goal is to add just one FSBO per month to your production, you'll have 12 more deals this year! They need you ... show them you can provide value and everyone wins!
(Joeann Fossland, Certified e-PRO Trainer, GRI, PMN, is a Master Certified Coach and Founder of the Web Women Giving Circle. Joeann is the Creator of The Real Estate Game®, the most effective group coaching available. You can reach her by e-mail.)