In today’s market, expired listings and distressed properties seem to dominate the scene. Nevertheless, there’s another source of right-now business that you can’t afford to miss: for-sale-by-owners (FSBOs).
I was chatting with Curtis Fenn of RedX about what is working with their customers in today’s market. Fenn’s company provides lists of both expired and for-sale-by-owner listings scrubbed against the "Do Not Call List." In addition to providing the owners’ contact information, they also offer a suite of products to assist agents in marketing to these potential clients.
Fenn explained that working with FSBOs is an important source of business that most agents overlook. According to the NAR 2008 Profile of Buyers and Sellers, approximately 88 percent of all FSBOs ultimately listed with an agent. Of those who did not, a large proportion of these sales were actually intrafamily transfers tied to a marriage, death or divorce.
Even in a good market, many agents feel FSBOs are not worth the trouble. In today’s market, they represent an even bigger challenge. Nevertheless, a number of Fenn’s clients are having great success converting FSBOs into closed transactions. Here are the three strategies that Fenn sees working with his clients.
1. Investors actively seek out distressed properties
Many FSBOs are facing foreclosure and have zero or negative equity. Selling their house without an agent is a last-ditch effort to avoid foreclosure. Fenn recommends that agents actively search for FSBOs and expired listings to determine which owners are facing foreclosure. Approximately 25 to 30 percent of the time, the owner’s contact information will be online. (If you don’t subscribe to a service, you can check with a title company or sites such as Zabasearch.com or 123people.com for owner contact information.)
Next, contact the owners and explain the various options available to them. For example, if they can locate a buyer, they may be able to do a short sale. Another alternative is to work with a loss mitigation company or HopeNow.com to see if the foreclosure can be stalled and/or the loan worked out. They could also hire a consumer attorney from NACA.net (not a real estate attorney) to determine if the foreclosure proceeding can be stopped completely. The agent’s role is to help the owner provide the best possible solution to the challenges they are facing. …CONTINUED