I came across an interesting statistic recently that really surprised me. The number of sales by For Sale By Owners (FSBOs) has plummeted from 20 per cent to a mere nine per cent in the last decade.
I’m surprised because there has been a proliferation of FSBO-based companies as well as the growth of social media and Internet tools that are supposed to help people sell their homes without hiring a professional. Those avenues don’t seem to be working. When I read that statistic I couldn’t help but smile because I get a lot of my business from FSBOs and could never understand why more agents don’t.
That stat also highlights why well over half of all FSBOs (I’ve seen quoted numbers from 70 to 90 per cent) end up listing their home with an agent. It is just too difficult for an owner to sell their home. Understanding the paperwork, pricing the property right, staging, helping buyers obtain financing and just plain not having time to devote to selling a house are all obstacles every FSBO faces.
What do these obstacles do? They wear the FSBO down and what began as a great way to save and pocket an agent’s commission turns into an ongoing series of headaches and second guesses. The stubborn few who refuse to admit their mistake and hire a pro get the satisfaction of selling their house for $40,000 less than an agent would have gotten them on average.
Doesn’t that look like a situation ripe for the picking? It is but there’s a right and wrong way to make sure you’re the agent they choose when they’re ready to hire one.
First, you cannot overspend on the FSBO market with your time and effort any more than you can devote all your time to your farm area. As agents we have a multitude of real estate tasks we have to do daily, weekly and monthly and as a reaction to an event like a new listing or sale. We have to find new clients while keeping our current clients happy and keeping in touch with former clients, all at the same time. If we spend too much time on one area, obviously the other areas will suffer. For now let’s look simply at the FSBO market and what we need to know about that area of our business.
At the end of the day, success getting listings from the FSBO market is all about two things: timing and TOMA. Timing means that you don’t know when a FSBO will be ready to give up and do what they should have done in the beginning. Some FSBOs only last weeks, others hang on for months and you have to be there when they reach that tipping point. Your timing has to be perfect.
TOMA is marketing speak for Top Of Mind Awareness. That simply means that when a FSBO thinks of hiring an agent, you’re the one they think of. You’re the one they call. You’re the one who lists their home. You’re the one they pay.
Now, you have to stay top of mind with the least amount of time and effort and that’s why I developed my FSBO system. I simply follow the steps outlined in it when prompted to do so and maintain contact with FSBOs without annoying them or coming on as too eager. I don’t have to think about what I should do next because my system is going to tell me. That frees up my time for other areas of business, all of which have their own systems that do the same thing, streamline my career and ensure that I make the most money possible with the least amount of effort. Smart effort I call it – that’s when your return equals or exceeds the effort you’ve made.
So go through the classified ads, take a picture of FSBO signs you see in your daily commute and make contact. That can be as simple as a phone call, a flier drop or even a knock on the door. Then maintain contact without annoying anyone and begin to build the relationship that will have the FSBO calling you.