Avoiding FSBOs?  You shouldn’t

You don’t like to answer a lot of very elementary questions.  You don’t want Joe Homeowner telling you how to do your job (it’s bad enough when mortgage brokers and REALTORs® do). You don’t want payment headaches from a lot of different, individual clients who aren’t going to need your services again and so might be less inclined to pay your invoices.

But there are a ton of reasons to embrace marketing your services to owners selling their homes themselves – FSBOs.

FSBOs are growing.  The National Association of REALTORS’® 2003 Profile of Homebuyers and Sellers reported that the number of consumers selling their home without an agent stood at 14 percent in the first quarter of 2003, down from 18 percent in 1997. But about 4.38 million homes were sold in 1997, compared to 6.10 million in 2003. Some rough math reveals that the FSBO market has grown from about 788,000 nationwide in 1997 to 854,000 today, a more than eight percent rise in real numbers.

This makes sense.  The Internet has made it possible for anybody to become an expert on anything – ok, that’s overstated.  But more information and research is available on the subject of selling your home now than ever before.

Also, there’s a burgeoning “consumer revolt” against six percent (or any percent) commissions.  In a hot housing market – and make no mistake, homebuying continues to set records, even as refinancing is expected to tail off with rate rises – there’s not as much marketing and expertise that goes into attracting buyers and closing sales.  Ask our California readers, who have written to report sales hundreds of thousands of dollars over listing price after buyer bidding wars.

People selling their homes themselves tend to be confident in their ability to manage a complex task, willing to put a lot of effort into it, and not afraid to seek help from experts (who don’t work on commission). They also don’t have in hand what every homeowner selling through an agent has: A good, solid estimate of sales price, a basis for deciding what to list the house for.  That’s where you come in.

Gary Jensen, a FSBO seller in Kentucky, reported that when it comes to selling, “If you price it correctly, that significantly increases the likelihood that you will prevail.” A 30-year veteran REALTOR® came at the same issue from a different angle: “FSBOs are very proud of their houses and tend to overprice them.”

So your services can be valuable to a FSBO seller.  Don’t think of them the way you generally think about buyers trying to get a mortgage to buy their dream home.  Buyers are often impatient, outraged when “you” prevent them from getting the mortgage they were after, and may see you as an obstacle rather than an expert giving them good information.

FSBO sellers, on the other hand, want an expert opinion on what the house is likely to sell for.  They want to cut the property’s exposure time, and the seller’s time and energy investment in marketing and showing the place.  You can help accomplish that.  And where a buyer wants you to hit a number, a seller is often grateful if the opinion of value didn’t come in as high as he or she thought to find out about it at that stage, rather than after weeks or months of having a property on the market with too high an asking price.

How to reach them?  There are a number of websites dedicated to FSBO resources.  We don’t recommend any one over the other, but a good place to get started is by visiting www.buyowner.com, www.fsbo.com, www.owners.com or www.forsalebyowner.com.

Your Appraiser XSite includes great, pre-written content you can use to add credibility and become a resource for FBSO sellers searching for an appraiser in your area.

And soon, from within WinTOTAL, users will have the option to publish a summary of the listing appraisal report to their XSite.  Once those steps are completed, an e-mail is automatically sent to the FSBO customer notifying him or her that the report is ready for publication and asking for permission to disclose the information.  When the FSBO customer clicks thru to accept, the page is unlocked on the appraiser’s Enterprise level XSite, and the FSBO seller can use the unique, supplied URL to share the report with potential buyers as a marketing tool.  The client may also download the report in PDF format.

See a screenshot of the XSite page here. This is a wonderful marketing tool for the FSBO seller, and sets you apart in this niche in your market.  FSBO sellers – who are overwhelmingly on the Internet – will make you their first choice for a pre-listing appraisal.

But don’t stop there.  Make FSBO marketing part of your overall marketing plan.  Include it in your yellow pages ad, and on your business card.  Have appraisers in your area who wouldn’t touch a FSBO with a ten foot pole refer inquiries to you.  But the best way to be regarded as a credible resource for FSBO sellers is word of mouth – so get that first couple of FSBO assignments out of the way, and you’re on your way to a more diverse practice.