Insights on FSBO Conversations?

[Nick Bruckner]

What are your favorite things to ask a seller who is considering selling their property without an agent? I'm looking for more tips from agents who have had success dialoguing with FSBO folks.

I lean towards: How much research have you done on how much FSBO sellers NET on average compared to sellers who pay a commission? Have you had a bad experience with a real estate agent in the past? What do you hope to net from the sale of the property? Is there a time period or a price point you'd be open to working with an agent if your property doesn't sell in the time frame you want at the price you want?

Sometimes I'll encourage them to look at Dave Ramsey's site on the topic. Are there things you'd add to his argument or other resources I should look at?

 I understand the rate of changing people's minds in these conversations will be low, but I sort of enjoy the conversation and I truly believe these folks are worth engaging because I like helping people and providing for my family - and helping sellers net more money with less work is a win-win proposition. I always end with emphasizing that I respect their perspective - I don't want to push folks to do anything they aren't comfortable with, but I want to make sure they are making informed decisions.

Is there a different commission structure you've had success presenting to FSBO sellers?

[Preston Dean]

Favorite thing to ask is if they can provide me with a sellers disclosure 9 times out of 10 they ask "what is a sellers disclosure" I tell them that it is a document that they need to provide the prospective buyers with to indicate what they know is wrong with the property. They then ask if I can send them one, where I then have to let them know that I can only send them a SD if they are my client's who have agreed to work with me to sell their property. 

It has yet to turn into someone agreeing to let me list their property LOL 

[Bruce Lynn]

Seller's Disclosure is the #1....Lead Based Paint Disclosure #2.....then they figure out they don't have a clue.

#3 you can ask to see the survey and affidavit....what?

#4 ask them if they are willing to pay for the title insurance and survey.....

#5...ask what contract they are going to use and if the days on the contract are business or calendar days.

#6 ...ask them what attorney they are going to use for the closing.

#7 ...ask if they are going to provide a home warranty?

#8 if you can get away with it, ask them if they know 90%+ of sales come thru an agent, so are they willing to cut out 9 out of 10 buyers.

#9....ask who gets the commission savings ? Buyer or Seller? They don't both get it. Ask what discount buyers think they are going to get on a FSBO....it's more than 6%. Buyers I've had in my car are so excited about seeing a FSBO....they think they're going to save 10-15%....that's a bad place to start as a seller.

[Bruce Lynn]

I also ask if they are keeping track of all the inquiries....if not I give them a call tracking sheet.   Two things can happen....they ask why would you do that....response is I want to call all those people if you ever decide to list with me.  #2 if they sell on their own, maybe they would be willing to give it to me as a lead generation tool.

[Preston Dean]

Quote from @Bruce Lynn:

I also ask if they are keeping track of all the inquiries....if not I give them a call tracking sheet.   Two things can happen....they ask why would you do that....response is I want to call all those people if you ever decide to list with me.  #2 if they sell on their own, maybe they would be willing to give it to me as a lead generation tool.

 What do you mean by a "tracking sheet" do you have an example?

[Blake Novotney]

Quote from @Bruce Lynn:

Seller's Disclosure is the #1....Lead Based Paint Disclosure #2.....then they figure out they don't have a clue.

#3 you can ask to see the survey and affidavit....what?

#4 ask them if they are willing to pay for the title insurance and survey.....

#5...ask what contract they are going to use and if the days on the contract are business or calendar days.

#6 ...ask them what attorney they are going to use for the closing.

#7 ...ask if they are going to provide a home warranty?

#8 if you can get away with it, ask them if they know 90%+ of sales come thru an agent, so are they willing to cut out 9 out of 10 buyers.

#9....ask who gets the commission savings ? Buyer or Seller? They don't both get it. Ask what discount buyers think they are going to get on a FSBO....it's more than 6%. Buyers I've had in my car are so excited about seeing a FSBO....they think they're going to save 10-15%....that's a bad place to start as a seller.

 Bruce this is fantastic..

Does this ever result in sellers getting defensive with you? Or does this tend to lead into the conversation that you would handle all these things and make a great listing agent for them? Just curious what sort of % results you are getting when using this with FSBO's, I'll give it a try myself!

[Peter Walther]

Quote from @Bruce Lynn:

Seller's Disclosure is the #1....Lead Based Paint Disclosure #2.....then they figure out they don't have a clue.

#3 you can ask to see the survey and affidavit....what?

#4 ask them if they are willing to pay for the title insurance and survey.....

#5...ask what contract they are going to use and if the days on the contract are business or calendar days.

#6 ...ask them what attorney they are going to use for the closing.

#7 ...ask if they are going to provide a home warranty?

#8 if you can get away with it, ask them if they know 90%+ of sales come thru an agent, so are they willing to cut out 9 out of 10 buyers.

#9....ask who gets the commission savings ? Buyer or Seller? They don't both get it. Ask what discount buyers think they are going to get on a FSBO....it's more than 6%. Buyers I've had in my car are so excited about seeing a FSBO....they think they're going to save 10-15%....that's a bad place to start as a seller.

Have you ever had a FSBO seller reply that while they won't list with you, they will pay you a 3% commission for bringing a buyer who closes? If so, how do you respond?

[Bruce Lynn]

Quote from @Preston Dean:

Quote from @Bruce Lynn:

I also ask if they are keeping track of all the inquiries....if not I give them a call tracking sheet.   Two things can happen....they ask why would you do that....response is I want to call all those people if you ever decide to list with me.  #2 if they sell on their own, maybe they would be willing to give it to me as a lead generation tool.

 What do you mean by a "tracking sheet" do you have an example?

It's just a spreadsheet printed out with a space for a name, phone, email.....I don't think I ever got one back if I didn't list it, but also wanted to provide the idea they would never sell it on their own, and I would follow up with anyone that had called them. 

[Bruce Lynn]

Quote from @Peter Walther:

Quote from @Bruce Lynn:

Seller's Disclosure is the #1....Lead Based Paint Disclosure #2.....then they figure out they don't have a clue.

#3 you can ask to see the survey and affidavit....what?

#4 ask them if they are willing to pay for the title insurance and survey.....

#5...ask what contract they are going to use and if the days on the contract are business or calendar days.

#6 ...ask them what attorney they are going to use for the closing.

#7 ...ask if they are going to provide a home warranty?

#8 if you can get away with it, ask them if they know 90%+ of sales come thru an agent, so are they willing to cut out 9 out of 10 buyers.

#9....ask who gets the commission savings ? Buyer or Seller? They don't both get it. Ask what discount buyers think they are going to get on a FSBO....it's more than 6%. Buyers I've had in my car are so excited about seeing a FSBO....they think they're going to save 10-15%....that's a bad place to start as a seller.

Have you ever had a FSBO seller reply that while they won't list with you, they will pay you a 3% commission for bringing a buyer who closes? If so, how do you respond?

Almost every one of them says that.   I just can't spend time marketing the house and getting it the exposure it needs without a written listing agreemeent (for full, or maybe even a discounted price if needed).   However I would also give them 30 day option....if I haven't sold it in 30 days, we'll cancel the listing, no charge, no hard feelings.  No one cancels....and they don't all sell in 30 days.

[Bruce Lynn]

Quote from @Blake Novotney:

Quote from @Bruce Lynn:

Seller's Disclosure is the #1....Lead Based Paint Disclosure #2.....then they figure out they don't have a clue.

#3 you can ask to see the survey and affidavit....what?

#4 ask them if they are willing to pay for the title insurance and survey.....

#5...ask what contract they are going to use and if the days on the contract are business or calendar days.

#6 ...ask them what attorney they are going to use for the closing.

#7 ...ask if they are going to provide a home warranty?

#8 if you can get away with it, ask them if they know 90%+ of sales come thru an agent, so are they willing to cut out 9 out of 10 buyers.

#9....ask who gets the commission savings ? Buyer or Seller? They don't both get it. Ask what discount buyers think they are going to get on a FSBO....it's more than 6%. Buyers I've had in my car are so excited about seeing a FSBO....they think they're going to save 10-15%....that's a bad place to start as a seller.

 Bruce this is fantastic..

Does this ever result in sellers getting defensive with you? Or does this tend to lead into the conversation that you would handle all these things and make a great listing agent for them? Just curious what sort of % results you are getting when using this with FSBO's, I'll give it a try myself!

I haven't worked FSBO in about 5 years, as we really haven't had any to speak up.   You'd think in a hot market everyone would be FSBO, but for some reason we just didn't have many...or expireds.....I don't think I ever had anyone get defensive...I just try to work it into the conversation while they're showing me the house.....I mean if you say things like, you must have had a lot of offers by now, why are you turning them down....puts some doubt in their mind as to why they haven't had any calls or showings or offers....or that it is all wholesalers calling offering 50% of market.   I haven't worked FSBOs in a while because we haven't had many in my market.  Few expired, almost no FSBO.   I think there is a balance on how you ask or present these questions....when you think about it there are probably 100 standard questions you could ask them, that they won't know the answer to....it's just our every business....items that are legal, that are important or vital to the transaction, but they've never thought about and when they do they understand why they need to hire you to sell and walk them thru the entire deal.....I mean what homeowner knows about septic disclosures, or PID, PUDs, MUDs, or lake level disclosures....or what happens if the buyer just never closes....what are their remedies, now that they have a contract...can they as the selller back out or is it only the buyer that can terminate?   How much does their attorney charge to ask questions?   I would guess many of us might have the personal cell phones of 10 board certified real estate attorneys that answer free questions for us.   I doubt most normal sellers don't know a single one.    There's plenty of stuff we don't know about every other business or profession, so it is up to us to explain why they need us.

[Peter Walther]

Quote from @Bruce Lynn:

Quote from @Peter Walther:

Quote from @Bruce Lynn:

Seller's Disclosure is the #1....Lead Based Paint Disclosure #2.....then they figure out they don't have a clue.

#3 you can ask to see the survey and affidavit....what?

#4 ask them if they are willing to pay for the title insurance and survey.....

#5...ask what contract they are going to use and if the days on the contract are business or calendar days.

#6 ...ask them what attorney they are going to use for the closing.

#7 ...ask if they are going to provide a home warranty?

#8 if you can get away with it, ask them if they know 90%+ of sales come thru an agent, so are they willing to cut out 9 out of 10 buyers.

#9....ask who gets the commission savings ? Buyer or Seller? They don't both get it. Ask what discount buyers think they are going to get on a FSBO....it's more than 6%. Buyers I've had in my car are so excited about seeing a FSBO....they think they're going to save 10-15%....that's a bad place to start as a seller.

Have you ever had a FSBO seller reply that while they won't list with you, they will pay you a 3% commission for bringing a buyer who closes? If so, how do you respond?

Almost every one of them says that.   I just can't spend time marketing the house and getting it the exposure it needs without a written listing agreemeent (for full, or maybe even a discounted price if needed).   However I would also give them 30 day option....if I haven't sold it in 30 days, we'll cancel the listing, no charge, no hard feelings.  No one cancels....and they don't all sell in 30 days.

First house I ever bought (circa 1982) came with an adjacent lot. I needed money more than the lot, so I stuck a FSBO sign on the road front. A week or so later, a real estate agent came to see me and advised she had a client really interested in the lot but before she could present a contract, I had to sign a listing agreement which included a 6% commission. I declined to list but offered to pay her broker a 3% fee for procuring a buyer. I thought it was fair considering she hadn't spent a nickel marketing my property, but she refused, explaining that while she hadn't spent anything on my property, she'd spent lots on others, so it all balanced out in the end. I explained that while I understood the principal of nature seeking to balance itself, it wasn't my job to help. Shortly thereafter her buyer contacted me directly and bought the property at my ask.

The last property I sold was a condo.  In between tenants, I went by and found an agent's business card stuck between the door and the jamb with a note advising he had a client looking for a top floor unit like mine and please give him a call if I wanted to sell.  I called and told him I wasn't planning on selling but would for the right price.  He asked for a number, and I gave him a make me sell price.  He asked if I'd pay a commission and I advised I'd pay 3%.  He and his client's were there inside 30 minutes and agreed to my ask and commission offer.

Marketing property, particularly in the last 4-5 years, consisted of putting a For Sale sign in the yard.  What is the value add I get for paying 6%?