What Does a “For Sale by Owner” Want?
This past Tuesday I was wrapping up a team meeting with 5 agents. The question came up on how to list "For Sale by Owner" properties.
Before I continue, let me state that it's fairly established that most "FSBOs" eventually list with a broker. There is a learning curve to the process, and these home sellers simply start out thinking they can sell without a broker. Before you throw a stone, sit down if you've ever changed your own oil, fixed your own toilet, booked your own vacation, ordered a legal form online for your personal use, bought a stock online, painted your house, or used a YouTube video to learn how to do something you didn't feel like paying someone else to do.
Anyone still standing? I didn't think so.
I've gotten this question about For Sale by Owner properties dozens of times over the years and I always had an eloquent answer. This time, I got out my phone, retrieved a photo of a FSBO sign I recently snapped and called them up. It went something like this:
JP: Hi, this is Phil Faranda, I am a real estate broker. I saw your sign for sale and wondered if I could take a look at your house to see if it was a fit for any buyer client I have here.
FSBO: Who are you?
JP: I'm J. Philip Faranda. I am the broker at J Philip Real Estate. I saw your sign and I don't know if I have a buyer that matches your property, but I'd like to see it to find out. I need 15 minutes. Maybe 10.
FSBO: Can you come by tonight after 6?
JP/FSBO: etc. etc.
We ended up scheduling for the whole team to preview the property later in the week. My agents' jaws all dropped. It couldn't have been that easy.
It kind of is.
People selling their home "by owner" don't eat their young. They don't typically hate brokers. They want to save money and are willing to give it a shot for a period of time before they give up and list with an agent. Until then, they consider themselves "open listings," representing themselves, and are usually willing to pay a buyer agent a commission.
I didn't get into commissions or self-promotion with this particular homeowner. It's unnecessary to do so. I asked to get familiar with the house. Baby steps.
For Sale by Owners don't want a broker (yet); they want a buyer. That's all. They want someone to buy their house. Most know that buyers may already have an agent, so they are fine with paying "half" a commission. They just aren't ready for a listing relationship. I've really only experienced hostility from one FSBO in 22 years. In 2010, I was with a buyer leaving a showing in White Plains when he spotted the FSBO raking his lawn across the street. He approached him and asked to see the house with me. The owner said he'd be fine, but I wasn't welcome. When my client said that he didn't feel comfortable approaching this without representation, the two had words. Technically, the buyer got the hostility. I watched.
Beyond that, every FSBO has either offered me a commission to bring them a buyer or politely stated that they weren't ready to abandon being on their own for the time being. Even with that experience, I wish I contacted every FSBO I ever drove past. The ones I didn't approach almost always eventually ended up with my competition's sign in their yard.