How to GET LISTINGS by targeting and converting FSBO’sAug 15, 2022
There are only ever 2 reasons why a property vendor decides to sell their property through the FSBO, for sale by owner, process. Today we’ll cover those 2 exact reasons and how to use those 2 same reasons to get FSBO property vendors to list their property for sale with you instead!
We’ll cover the 4-step plan to convert a FSBO prospect into a signed-up listing
Plus, I’ll share with you the link to my own listing presentation that I use to convert the FSBO prospects in my own marketplace to listings signed up on my books!
There are 2 core reasons why a property seller undertakes the responsibility of selling their property through the FSBO (For Sale by Owner) process. These 2 core reasons are either, some sort of money constraint, or the seller will have had, what they perceive to be, a bad or difficult experience with a real estate agent in the past.
The key to winning new listing sign ups of properties that successfully sell, from the FSBO marketplace, is to really understand the emotion that is fuelling the property seller to commit to the ‘for sale by owner’ option as opposed to engaging a real estate agent to sell their property on their behalf.
Attempting to educate a FSBO owner on the benefits of why engaging a real estate agent is better than the path they have chosen will at best fall on deaf ears or at worst is likely to cause agitation in the property vendor if you have not taken the time to understand the emotion that is fuelling their decision to pursue the ‘for sale by owner’ sales approach for their property.
Let’s individually look at the 2 core reasons that drive the property vendor to choose the FSBO path and investigate the likely dominant emotions that are fuelling their choice.
A recent article in Forbes magazine which dives deep into the psychology of money conveys that the most important emotions in relation to money are fear, guilt, shame and envy.
Wow! When we are talking about fear, guilt, shame and envy we are all aware we are talking about some of the most heavy of negative emotions in the human spectrum of emotions. We also know that in today’s world it is commonplace that most people conceal the emotions well from others … and many people excel so well in this societal requirement that they have even managed to conceal their true emotions from themselves!
With that being said, humans are run by their emotions, some of us are indeed better at controlling our emotions than others, however, the fuel that moves the average human being is their emotion.
When money is the core reason fuelling a property vendor to go down the path of a 'for sale by owner' property sale process, more often than not, it is fear that is the driving emotion, fear of not enough. It could very well be that the property vendor fears that they cannot afford to pay the real estate agents commission, or they could be in fear, that if they must pay (what they perceive are) the expensive marketing costs and commission costs that they won’t have enough money to buy what they want and to cover the extensive moving costs.
The emotions of shame and guilt, can often be found dominant when money is the core reason the property owner chose a FSBO path, shame around running themselves, accidently in most cases, into some form of debt, this can happen through a marriage separation or divorce, losing their job or main source of income, a high monthly mortgage being pushed higher by a hike in interest rates, or the day to day living and education costs of a family spiralling out of a control.
The energy of envy can rear its ugly head in a FSBO property owner also, this will manifest as the property owner experiencing, expressing, and obsessing, on how much money us nasty real estate agents make! The key tell-tale sign that a property vendor is experiencing envy is the word obsessing, meaning literally every conversation in some way will have comments, even if made in a joking way, about how much money we as the real estate agents earn and how easy our work is.
When the emotions of fear, shame and guilt are apparent in the property owner’s decision to pursue the 'for sale by owner' pathway, we as real estate agents, should first feel the energy of compassion. Why is that? Because, of course we’re more than real estate agents, we’re people who have felt the same energy in our lives from time to time, we’ve felt the consequences of such heavy emotions governing our own actions. So, in simple terms, we have compassion because we understand.
When the dominant emotion in the property vendor choosing the path of FSBO is envy; my honest and direct advice, is leave them to it, that type of client, even if you can convert them to a property listing, in general will be extremely time consuming and hard to please, and in the end, if you do a good job will begrudgingly pay the commission. The reason I advise you not to bother with this type of client, is not because they’re an annoying and uncomfortable client to deal with, it is more because they are a complete distraction and energetic drain from more satisfying and fulfilling work with vendors who not only respect your service and ability, are very likely to leave you a positive review or client testimonial.
Before we move on to how you ascertain which emotion or even emotions are fuelling a property vendors decision to pursue the 'for sale by owner' approach to selling their property, let’s look at the emotions which are fuelling the vendors belief that s/he has had what they perceive as a bad or difficult experience with a real estate agent.
This core reason will often be very easy to spot, because simply when you ask the question, the property owner will be harbouring some sort of disgruntled energy, that they can hardly hold back from telling you what happened with a past or previous agent.
You may have noticed that whenever I discuss this core reason, rather than saying ‘had a bad experience’, I instead say, ‘ the vendor has had what they perceived was a bad experience’. The reason I focus on the words, ‘they perceived’ is because in my experience, 9 times out of 10, that’s all it was, its perception based. The property owner feels their needs were not met.
In most cases, what will have happened here is the previous agent will not have correctly identified and addressed the property vendors needs within the sales process of their property. It is far more often that this is the case than there was a very bad agent out there taking terribly bad advantage of this poor property vendor, and yes, albeit this unfortunately can happen occasionally, it’s not as commonplace as a misunderstanding of needs and a breakdown in communications.
Now that we’re getting a better understanding of the psychology behind what motivates at property vendor to choose the 'for sale by owner' pathway to sell their property, how do we help the property owner to understand the benefits of engaging a real estate agent to sell their property and to willing agree to list their property for sale with you?!
Follow these steps to convert FSBO listings to new listing sign-ups and successfully sold properties.
- Start with respecting the FSBO property vendors’ decision.
As real estate agents, we certainly do not agree with their decision to try to sell their property through a FSBO process, however, now that we understand that it is emotion that is fuelling this decision, then the first thing we do, is lay a foundation of respecting their decision as the starting point of our relationship with this property vendor. Displaying the energy of respect of their decision will neutralize the FSBO property vendors battle armour they have donned in an effort of protect themselves from the onslaught of real estate agents who are pursuing their property as a listing opportunity
- Understand that communication is the elixir to success in both listing the FSBO property vendors property, and in achieving a successful sale of that property.
We now understand that it is emotion that fuels a property vendors decision to pursue the FSBO pathway, however, the only way for us to gain clarity on which emotion is fuelling our FSBO prospect, and to understand how to neutralize the property vendors emotions, as well as understand which needs of theirs need to be met in order to successfully list and sell their property; is by opening up a dialogue of communication around their decision to choose the FSBO path.
The easiest way to understand the property owners’ emotions and needs within a property sale dynamic is through open questioning. I cover this questioning technique in depth in my free eBook ‘emotions are the fuel behind every seller’s decision to sell’
To summarize that eBook for today’s post, the open-questions technique, focuses on starting our questions to the vendor with the words Who, What, When, Where, Why and How as a method of questioning within our sales negotiations, in our role as a real estate agent, to help us understand our prospect and their needs better.
This questioning technique is especially useful when working with FSBO property vendor prospects to understand their fuelling emotions, driving motivations and needs, in the dynamic of listing their property for sale.
Using the Who, What, Where, When, Why and How questioning technique will also help you build trust in the dynamic between you and the FSBO property vendor. This type of questioning shows you are genuinely interested in and willing to understand the property vendors needs. It’s a universal truth that everyone likes to be heard and understood. The key to success with the FSBO property vendor is once you understand the fuelling emotion, and once you have heard their needs, is being able to next communicate how listing their property for sale with you is the safest decision this property owner can in fact make to ensure their property sales process results in a successful sale, and to demonstrate how you as their real estate agent, can meet their needs through the successful listing and sale of their property.
Only when we have understood the emotion that is fuelling the property vendor to choose the 'for sale by owner' sales process, as well as having gleaned an understanding of the sellers true reasons for wanting to sell their property, along with understanding what needs of theirs need to be met in the sales dynamic, are we in a position to create a compelling pre-listing and listing presentation which you can be confident will result in a new listing sign up, but also, a successful property sold, and quite possibly – a client testimonial !
To correctly position yourself to create a compelling pre-listing and listing presentation which you can be confident will result in a new listing sign up, as well as a successful property sold, and quite possibly a client testimonial, focus first on embracing the Who, What, Where, When, Where, Why and How questioning technique with the property vendor.
- Create and present a compelling pre-listing and listing presentation which you can be confident will result in a new listing sign up, as well as a successful property sold, and quite possibly a client testimonial.
A winning pre-listing presentation follows this set structure.
- An opening Cover which displays a client testimonial or Review,
- An Intro letter which directly and correctly identifies (your understanding of) the property vendors needs regarding the sale of their property.
- An explanation of what is a CMA (comparative market analysis) and why its important in understanding the value of a property owners’ property
- A detail of relevant CMA evidence
- An explanation on why correctly marketing a property for sale will result in the property selling faster and more often for a better price than a poorly marketed property
- A selection of marketing activities suggested to market the property for sale, along with the results of other successful marketing campaigns that supported your other listings to sell successfully
- The list of marketing expenses
- The listing agreement with a clear detail of commission for signing by the property vendor.
The key to this pre-listing and listing presentation being compelling and effective in converting a FSBO property vendor into a listing sign up, is by referencing their needs in each section of the presentation.
When the pre-listing and listing presentations are followed how I detail here, they will demonstrate you as an informed real estate agent who has expert level understanding of the local property marketplace and as a real estate agent who knows how to sell effectively within that marketplace. By referencing the FSBO property vendors needs throughout the presentation shows that you have listened and understood what is holding this vendor back from engaging an agent, this presentation will also show you are ready and capable of ensuring the outcome of a successfully sold property.
To learn more about how to create and present a winning listing presentation that results in successfully sold properties; as well as receive a copy of my own listing presentation – go here
- Actively manage and communicate with your pipeline of FSBO prospects
Due to the nature of the beast, FSBO property vendors, may take a little bit more convincing to come on board and list their property for sale with the local real estate agent. Over the years, I found the most effective way to manage a FSBO lead which is still not quite ready to sign their listing up after the pre-listing and listing presentation, is to communicate with them, on a regular basis, with content or information that is relevant to them.
I have found that going this extra mile in my FSBO prospecting activities is well worth the effort and often results in a signed listing agreement within the short weeks or months following the listing presentation appointment.
The 3 best types of relevant content you can supply to your pipeline of FSBO property vendors are:
- Successful sale and new listing updates from the marketplace, that are comparable or in competition with the FSBO’s property. Depending on how active your marketplace is, this Is best done weekly or fortnightly. You can send a simple email asking the property vendor how they are tracking with their property and advising of the update in comparable sales and listings in the marketplace since your last email or meeting.
- Share a recent client testimonial or review. As a real estate agent, I teach often, it’s extremely important to request and market client testimonials and reviews. A testimonial or 5-star review is great content to send via email to FSBO prospects, simply because it’s a reassuring message of your ability and integrity as a real estate agent.
- An update on your own new listings and any particularly good results you achieved, whether that be in terms of price or efficiency in achieving a successful sale. Again, this is something that can be sent via email and is intended to reassure the FSBO prospect of your ability and activity in the local marketplace.
Of course, along with sending through these regular emails to the 'for sale by owner' prospect, it’s always worth having set timeslots, in which you regularly call those FSBO pipeline prospects to ask them verbally how they are tracking along with the sale by themselves and if they’re ready to hand the mantel of the listing to you. Make sure in verbal conversation to reference the sellers needs to show they’re important enough to you as a client for you not to forget what is important to them.
To finish up today’s post team, remember there are only ever 2 reasons why a property vendor decides to sell their property through the FSBO process, and those 2 reasons are, fear around their finances and having had, what they perceived as a bad experience with a real estate agent in the past.
Use open questions, to get to the heart of the 'for sale by owner' issue, and when you have worked out that you understand the issue, make sure to address that issue through the entire listing and sale process to ensure a successful sales transaction.
Follow my 4-step plan to convert FSBO prospects into signed-up listings and successful sales
And remember, to learn more about how to create and present a winning listing presentation that results in successfully sold properties; as well as receive a copy of my own listing presentation – go here: