To learn more about LarsonEd’s Florida real estate and Florida insurance courses, visit LarsonEd.com or give us a call at 239-344-7510.
About Larson Educational Services:
Utilizing 40 years of real estate training and professional education experience, Florida real estate school Larson Educational Services is the premier provider of Florida real estate licensing, exam preparation, post-licensing, CAM licensing, mortgage loan originator licensing, and continuing education in Southwest Florida. Classes are available in Fort Myers, Naples, Sarasota, and online. We are an approved Florida Real Estate School (License #ZH1002299), Florida CAM School (License #PRE31), Florida Insurance School (License # 370501) and NMLS Approved Course Provider.
On average, FSBO listings will take longer to sell than agent listings. Unless the person selling without representation already knows a person who wants to take the property, this can mean a lot more time spent on the market.
If an FSBO runs into a problem or has a question, they are all alone. Real estate agents have mentors and brokers to go to for help—agents have a network to go to for support. FSBOs do not.
7. Marketing is harder than it looks
FSBOs often underestimate the difficulty of listing and selling their home.
Think putting up a yard sign will be enough to sell your home? You’re not alone.
33% of FSBOs rely on yard signs to market their home.
But what many of these sellers don’t realize is that getting on the MLS is not necessarily enough to make the sale.
Again, as an agent you have a network of connections and prospects who might be interested in a home that would otherwise sit unsold for an FSBO.
8. Less money, more problems
The name of the game for FSBOs is saving money.
However, odds are good that a for sale by owner will be nickel and dimed until their commission savings are nullified.
How much will the home inspection cost? What about signage and flyers? How about that home warranty? The list of small costs that are a necessary part of the sales process can add up.
And that’s to say nothing of the investment of time required for an FSBO.
Without the same resources as an agent, FSBOs wind up making a large investment of time to sell their home.
Utilizing 40 years of real estate training and professional education experience, Florida real estate school Larson Educational Services is the premier provider of Florida real estate licensing, exam preparation, post-licensing, CAM licensing, mortgage loan originator licensing, and continuing education in Southwest Florida. Classes are available in Fort Myers, Naples, Sarasota, and online. We are an approved Florida Real Estate School (License #ZH1002299), Florida CAM School (License #PRE31), Florida Insurance School (License # 370501) and NMLS Approved Course Provider.
We all like to save a few bucks here and there, especially when it comes to home ownership.
But some boot-strapping home owners take DIY too far.
Sure, it makes sense to teach yourself how to fix a leaky faucet or replace a broken door hinge.
But at what point does this self reliance go too far?
The answer: when you decide to sell your home yourself.
Some people see listing their home for sale by owner (or FSBO) as a way to save an agent’s commission for themselves.
“I can put a few signs in the front yard,” they tell themselves. “And what’s so hard about taking some pictures and posting them online?”
Actually, a whole lot about real estate photography is easy to overlook. For starters, getting rid of the stuffed animals and Simpsons-esque furniture. (Photo courtesy of terribleagentphotos.com)
What they don’t realize, however, is that their choice to go it alone could potentially cost them a lot of time and money.
So how do you turn FSBOs into a client?
In short, through education.
Inform FSBOs of the risks they’re unwittingly taking on and explain the possible negative implications of those risks.
1. The potential for scams
FSBO sales create the potential for fraud by both parties.
Some FSBO sellers will ask that their buyer go forward without an agent as well. “We can make this deal without either of us losing money to an agent,” they might say.
Hoping to save a few extra dollars in the deal, the buyer might agree, throwing down an earnest money deposit in the process. If the FSBO decides they don’t like the deal, the buyer might be out of luck without a valid contract or receipt, saying goodbye to their EMD.
FSBO scams can include producing fake papers, such as appraisals or loan documentation, or purchases through a fake third party, like a non-existent attorney.
Ask an FSBO why they would open themselves up to these potential scams. Tell them you’re a trained professional who specializes in these transactions and, believe it or not, they’re not as easy to pull off as they might seem.
Maybe the FSBO did a Google search and found a one-size-fits-all contract and thought their work was done. But do they actually understand what’s on that contract? Are they capable of customizing it?
Ask the FSBO how valuable their time is and how it could be used in better ways than learning the ins and outs of real estate contracts they may use only a few times in their life.
Sales contracts, lead paint disclosures, property disclosures—inform the FSBO that any missteps in these papers can lead to legal problems that could’ve been easily foreseen by a real estate agent.
3. Bad deals
FSBOs aren’t as practiced or as knowledgable at finding discrepancies in contracts before signing on the dotted line. For example, let them know that they may have to pay lots of money to back out of a bad deal if there are some oversights in their paperwork. You can help save them that money and headache.
4. They’ll get less money
FSBOs make about 16% less than median sales prices. This could be due in large part to them not having the time or resources to devote to understanding their home’s market value. Likewise, they may not know how to accurately read market reports, and they might not know how to create a proper marketing campaign.
Utilizing 40 years of real estate training and professional education experience, Florida real estate school Larson Educational Services is the premier provider of Florida real estate licensing, exam preparation, post-licensing, CAM licensing, mortgage loan originator licensing, and continuing education in Southwest Florida. Classes are available in Fort Myers, Naples, Sarasota, and online. We are an approved Florida Real Estate School (License #ZH1002299), Florida CAM School (License #PRE31), Florida Insurance School (License # 370501) and NMLS Approved Course Provider.
As you saw in our previous post, approaching FSBOs can be a good way to gain a new client. FSBOs often want to save on the commission by doing it themselves, but don’t realize how much extra time and effort it will take them to sell their own property.
Your job is to handle their objections to you taking on their property in a way that will convince them that you are worth the commission.
Here are responses to 5 common FSBO objections (Source: REALTOR Magazine):
1. If the FSBO says:
“I’m sure I’ll get a buyer in no time. I’ve had the house on the market only a week, and I’ve already had 3 people come to see it.”
Counter with:
“It’s great that you’ve had so much interest, but how many of those people come back a second time? One of the problems with showing a house is that you get a lot of browsers who just like to see other people’s homes.”
2. If the FSBO says:
“I can’t afford to pay a real estate commission. I need every cent I can get from the sale to put toward my new house.”
Counter with:
“I know it’s important to have the biggest down payment possible. But an NAR survey (the Profile of Home buyers and Sellers) found that, on average, people who sell their homes through a real estate professional receive a price that is 27% higher than people who sell their homes themselves. So even with my commission, you’ll probably come out ahead.”
3. If the FSBO says:
“What do I need you for? I can put up a sign in my yard.”
Counter with:
“It’s true that your sign will attract buyers, but many of them won’t be able to afford your home. When I get a call from a house sign, I can prequalify buyers. In addition, I won’t just put up a sign. I’ll actively market your listing, through the MLS and other means, to brokers who are already working with qualified buyers.”
4. If the FSBO says:
“If I list my property, it will be with my friend who’s in real estate.”
Counter with:
“It’s great to be loyal to your friends. But can you afford to list your property with a friend for 60 or 90 days and take the chance it won’t sell? If you’re planning to buy another home, that’s a big gamble. Our company sells homes in your area fast. (Provide the number of days on market.) Also, I’ve found that when working with friends, it’s hard to fire them if they don’t perform.”
5. If the FSBO says:
“I can do this myself.”
Counter with:
“Of course, you’re smart enough to do what has to be done. But why spend all the time figuring out something you may not do more than a few times in your life? Let someone who has experience do the work for you. If you decide to try to sell on your own, I’ll be glad to give you a list of all the forms you’ll need. (Quantify the number of forms to demonstrate the sheer volume of paperwork involved in selling a home.)”
If you recognize and are able to counter these common objections, you’ll be more likely to make a FSBO your client.
Coming soon:
Open House Tips Part 1
f you are a new Florida real estate professional, make sure you complete your Post-Licensing Education before your 1st license expiration date. If you are a seasoned veteran, it’s never too early to get your Continuing Education done. Either way, Larson Educational Services has you covered with timely and market-ready information taught in professional classrooms by instructors who care about your success.
Learn more about the courses we have to offer in Fort Myers, Naples or Online at the following link – http://www.larsoned.com/realestate/ – or simply call a friendly Larson representative at (239) 344-7510.
Larson Educational Services looks forward to earning the right to be your real estate school of choice!
For sale by owners tell us that the major reason they try to sell without an agent is that they feel they are saving a commission. The #2 reason is related to a prior unpleasant experience with another agent.
So how do you convince a For Sale by owner that not only are agents in general a good idea but that having you specifically is the right choice for them?
1. Show the FSBO that working with you is in their best interests
Do this by preparing an FSBO packet that includes: a cover letter, what you need to know to sell your own home, your personal bio/brochure, company information, and the necessary forms to sell their own home. The information alone may show them that you know your stuff and they may not be as equipped as they thought to do it on their own.
2. Develop an approach to FSBOs that is comfortable to you
Make contact early, ask them about the property, and leave them the documentation necessary to sell.
3. Ask them questions:
a. Is your property priced properly?
b. Can you justify your price?
c. Are you reaching the right people?
d. Can you reach them again?
e. Can you weed out the “lookers”?
f. Will the prospect confide in you?
g. Do you understand financing?
h. Can you find hidden objections?
i. Are you always available?
j. Can you close a sale?
k. Can you sell their home?
l. Who will draft the documents?
m. Are you really saving the commission?
When it comes down to it, once you ask them some or all of these questions, the FSBO may realize that they really aren’t equipped to sell their own home, leaving you in a position to sell their property yourself.
4. Stop by early and often
An FSBO’s pride may get in the way of letting you take the property at first, but once they realize they aren’t cut out for it, make sure you are there to take it over.
Keep these techniques in mind when you are approaching a FSBO and they will be more likely to choose you as an agent when they’ve had enough.
Coming soon:
How to Overcome FSBO Objections
If you are a new Florida real estate professional, make sure you complete your Post-Licensing Education before your 1st license expiration date. If you are a seasoned veteran, it’s never too early to get your Continuing Education done. Either way, Larson Educational Services has you covered with timely and market-ready information taught in professional classrooms by instructors who care about your success.
Learn more about the courses we have to offer in Fort Myers, Naples or Online at the following link – http://www.larsoned.com/realestate/ – or simply call a friendly Larson representative at (239) 344-7510.
Larson Educational Services looks forward to earning the right to be your real estate school of choice!
Naples Real Estate School 