Converting a for-sale-by-owner prospect is a delicate matter. It takes finesse to convince someone they’re making the wrong decision in selling their own house. Here’s how to do it.
Dealing with a for-sale-by-owner (FSBO) prospect is a delicate matter. It takes finesse to convince someone they’re crazy to consider selling their own house.
When I first got my license and signed on with a broker, I went through an extensive training program before being turned loose to conquer the world of real estate!
One of the first lessons taught was FSBOs and expired listings were my golden ticket to success. I was told, “Call the FSBOs, or better yet, show up at their door.” I (like so many of us) was advised to use the old “I would like to preview your home for a client” excuse.
Looking back, this was not very ethical since as a new real estate agent, I didn’t have any clients. And, in hindsight, showing up at the door of someone I didn’t know was probably not the safest thing to do.
And, once I did connect with a FSBO, I was using the same script as a hundred other agents which caused me to lose credibility.
Now that I have some years under my belt, I understand better how to overcome a FSBO’s objections and successfully convert them to clients.
Here are some of the most common objections I encounter and the ways I can overcome them.
1. ‘I can make more money by not paying a commission.’
Most FSBOs think they will make more profit by not paying a commission to an agent. Before I was an agent, I felt the same way. Now, I realize that thinking is flawed.
You can use statistics to prove your value, but I’ve found it’s better to point out the obvious. I explain, on average, homes do sell for more when listed by an agent. The pool of buyers for a Realtor is much bigger than the sphere of personal friends, family, neighbors and the newspaper.
A Realtor can do target marketing to reach the buyers that are most likely to be interested. More buyers mean more potential for excellent offers from buyers who have already been qualified for a mortgage.
2. ‘I can get my house on the MLS without an agent.’
A FSBO usually can get their home on the MLS for a small price, and Zillow allows them to list for free. Plus, many FSBO websites claim they can give the For Sale By Owner buyer everything they need to sell their home.
I usually counter this claim with the fact that even though it is on the MLS, most qualified buyers are already working with an agent, and many of those agents will not encourage their clients to consider a FSBO property due to the seller’s lack of real estate knowledge.
I further explain that these types of arrangements often put a licensed agent in an awkward position because they are not allowed to give the seller advice on anything and for sale by owner mistakes can put the seller at a disadvantage.
3. ‘I priced my home to sell fast and can’t afford to pay a commission.’
It makes sense that a FSBO would think pricing a home low will make the house sell fast. But, homes priced wrong often stay on the market longer than a similar home priced right.
I explain that pricing a home too low raises red flags because buyers often fear there is something wrong with the house. Plus, since most qualified buyers are already working with an agent, the buyer’s agent will expect to receive a commission for bringing a ready, willing and able buyer. I ask if they will offer a buyer agent commission.
Suggest, instead of taking a chance of losing qualified buyers, we can work together to get the home sold. If the seller is leery, consider a short term listing agreement of 90 days.
4. ‘I’m going to see if I can sell it on my own with the advice of my Realtor friend.’
Always acknowledge their desire to sell it on their own, but add, “Is your friend a full-time, experienced Realtor?”
If the answer is no, explain many realtors have good intentions but may not have enough experience to give the best advice. It’s always better to have someone that sells homes full-time to ensure you’re getting the best information.
5. ‘An agent doesn’t know about my house the way I do’
And that is precisely why selling their own home is not in their best interest. Selling a home is an emotional transaction. Owners have a hard time separating the house from the home. A Realtor doesn’t.
6. ‘I’ll think about it if you’ll cut your commission in half’
Honestly, I won’t negotiate my commission because of all the time, effort and marketing dollars I spend on every listing.
Also, I find that often, FSBOs require more time and effort because they honestly think they know more than a professional Realtor.
I explain to them that I pay for professional photography, social media target marketing, print advertising and email blasts for which I am not reimbursed.
Cutting my commission would mean cutting corners on marketing, and I’m not willing to do that. If I’m not representing my client to the fullest of my ability, it results in lower offers and more time on the market.
7. ‘I don’t want people going through my home without me being here’
Two issues can be addressed with this objection.
First of all, if they always want to be present, they’re not going to be able to accommodate every showing and have a life. Lack of availability means the house will take longer to sell.
Secondly, they are not trained to recognize deceitful behavior. They may be the perfect mark for the thief from which they are trying to protect themselves.
Explaining the safety protocols you have in place as well as how a Bluetooth lockbox works often lessens their fears.
You will encounter more objections than these. But, the more experience you have, the better you become at combatting objections.