According to Alexa.com, Web traffic at ForSalebyOwner.com is down substantially since 2005. Given the shifts in the market, now may be the best time ever to start prospecting for-sale-by-owners, or FSBOs.
While Web leads may take months or even years to develop, there are few resources better than expired listings, referrals and FSBOs for “right now” business. When markets are strong, we see more discounting and more people selling their properties without representation. When markets soften, however, the number of expired listings increases while the number of FSBOs generally decreases.
The Web creates an interesting marketing challenge, not only for FSBOs, but for all advertisers as well. There are so many places where you can market property that it is hard to know where is the best place to advertise. Furthermore, according to a recent survey by the California Association of Realtors, the number one reason visitors go to a real estate company or agent Web site is to have access to the Multiple Listing Service. An unrepresented seller marketing a single property has virtually no chance of appearing on major search engines in a prominent position. Furthermore, the seller’s property will not appear on the MLS and as a result, the property will not receive maximum exposure to the market that results in the maximum possible price.
ForSalebyOwner.com (recently purchased by Tribune Interactive, the online arm of the Tribune Co.), is the top-rated FSBO site on the Web, according to Alexa.com, (an Amazon.com company that tracks Web traffic and Web rankings.) Although Alexa only tracks Web visitors using the Alexa tool bar, it still provides an objective picture of how various sites are performing.
I started tracking for-sale-by-owner rankings on Alexa about two years ago. In April and May of 2005, ForSaleByOwner.com was averaging about 450 unique visitors per 1 million Alexa.com hits. In contrast, RE/MAX and Coldwell Banker, two of the most highly visited traditional real estate sites, were receiving only about 200 unique visitors. As the market began to slow in the last half of 2005, the number of Alexa hits on ForSalebyOwner.com started to drop. In contrast, unique visitors to the major traditional real estate companies began to climb. To illustrate this point, in April and May of 2006, RE/MAX had approximately 280 to 300 unique visitors per 1 million Alexa.com visitors. As compared to May of 2005, this represents almost a 50 percent increase in RE/MAX Web traffic. In contrast, ForSalebyOwner.com had a drop from 450 unique visitors in May of 2005 to approximately 160 unique visitors for May 2006. This represents approximately a 60 percent decrease in unique visitors to their Web site.
What does this mean? The seller who elects to market a property without representation may be making a costly mistake. Maximum market exposure results in maximum price. Consequently, to obtain the maximum price for a property, the listing must appear in as many advertising venues as possible. In most cases, the unrepresented seller (and sadly many agents), are unaware of how to effectively market to Web consumers. They have no knowledge of pay-per-click programs, how to create an effective landing page, or the steps required to convert a Web lead into a closed transaction. As a result, the percentage of FSBOs who list with an agent is continuing to climb. As markets slow, this number may increase in even more.
How can you capture more FSBO business? First, avoid using the old lie that “I have a client for your property.” Even if you do, you have no business showing the property unless you have a one-party listing in place and have addressed the required agency issues. Besides, if the seller thinks that your buyer may purchase their property, they will often wait to list until your buyer decides what to do.
The best approach to listing FSBOs is to give the seller a reason to see you repeatedly by offering some sort of service. Most people list with the agent they have most recently seen face to face. Examples include offering the use of your 800 Call Capture system, dropping off useful information on how to stage their property, a moving checklist, or other valuable information. There is one extremely important caveat here. Avoid providing sales data or information about disclosure requirements. This may create an agency relationship even if you do not have a signed listing agreement. Also, avoid placing ads in places like Craigslist or any other advertising venue. When you do this, you have almost certainly created an agency relationship. This is particularly troublesome when other agents are doing the same thing. When different agents reference different prices for the same FSBO property, someone is certainly misrepresenting the seller. Furthermore, many states prohibit the running of “blind” ads. You must reference that you are a broker or agent.
Finally, where do you find a list of FSBOs? What better place than the Web sites that market for-sale-by-owners. For a list of companies that provide this service, visit any search engine and type in “For sale by owner leads.”
FSBOs have always been one of the best sources for “right now” business. If you’re not prospecting this valuable resource, now is a great time to begin.