The For Sale by Owner Real Estate Niche
The reason most often cited for going FSBO is the desire to save money that would become commissions if they list with a real estate brokerage. It's possible that there may also have been a previous bad situation with a real estate agent or broker. Sometimes it's a combination of things. With the growth of the Internet and major listings sites that take FSBO listings, more people believe that they can sell their home on their own and save thousands of dollars in commissions.
They aren't always wrong. However, there is no way to know, as it's one way or the other. There are studies showing the average FSBO sale nets less than comparable homes with real estate agent representation, but they're not the same homes.
How Do You Find Them?
It is the easiest part of working FSBO sellers for listings. They are out there advertising their home for sale with yard signs, classified ads, CraigsList ads, and listings on real estate sites like Zillow.com and others. Keep a watch on the classifieds, do searches on CraigsList, drive around, and subscribe to listing feeds from websites to send you new FSBO listings in your area.
What's Special About FSBOs?Whether they think they can save money with the do-it-yourself approach, have had a bad experience, or they just think that the Internet puts them on a level playing field with real estate brokerages, FSBO sellers can be a lucrative market.
By watching their properties, waiting until they've been on the market a while, and then bringing them solutions for their non-selling property, you can actually turn a significant percentage of FSBOs into listings. Once their property has been on the market without meaningful activity, they are usually amenable to an approach that offers to help.
How Do You Contact Them?
First, beware violating Do Not Call regulations. It can get you large fines. If you decide to call an FSBO, either be sure that they are not on a Do Not Call list, or have an ad in your hand that says something about "agents welcome." If they're offering buyer agent commissions, they will expect calls for more information or to show the property.
If you don't have that ad, you may still be OK calling them to say that you have an interested buyer, but you better be able to produce one at a showing. Otherwise, send a postcard or brochure mailer, or email them if their email address is in any of their marketing material.
What's My Value Proposition?
First, you need to believe that you're bringing value to the table. Your marketing venues and abilities should bring them more showings. Your market knowledge should help them to objectively examine their pricing. You take phone calls, lookie-loos and other annoyances off their backs. You bring the power of the MLS with all of the members, many of whom would not have noticed or shown the property as an FSBO.
A Great Many FSBO Sellers Get Tired of the Game.
By watching and waiting, you can target FSBO sellers with properties that have been on the market longer than the average for listings.
You can study their property before initial contact, do a CMA, and determine if a price adjustment must be made. Once you're ready to contact them, you come armed with solutions to their marketing dilemma.
You will not be competing with nearly as many agents as in other real estate niche markets. Your conversion percentage from FSBO to listing will become quite high as you gain experience. You'll be able to give examples and references of previous FSBO properties you've taken to closing. It can be a great real estate marketing niche for those who take the time and effort to perfect their approach. **Update: The 2011 NAR Report of Buyers and Sellers confirmed that FSBO sales have held steady at around 9%.