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Strategies for Converting FSBOs and Expired Listings

December 3, 2018

Successful real estate agents are experts in taking the coldest of leads and warming them into active clients. It’s an essential skill, and there are all kinds of expert tips available to help you convert cold leads into clients. However, finding warm leads – and capitalizing on them – will make your life as a real estate agent a lot less stressful. “For Sale by Owner” (FSBO) listings are properties that are listed for sale by the owners directly and not represented by a real estate agent, while expired listings are properties that were listed for sale at one point but the listing expired before the property sold. They are also among the most effective leads for a new agent to a target, because they present strong opportunities with owners who are motivated to sell.  But, before you target them, you will need to find them. While you will find expired listings on your MLS, there are two main avenues to find FSBO listings.

  • Online FSBO Lead Services:

 

Online lead services, like redX or Vulcan7, will scan all available sources and generate lead contact information for you.

 

  • Personal Research:

 

You can also conduct your own research using Craigslist, Zillow, Forsalebyowner.com, or your local newspaper website.

Why should agents target FSBOs?

 

The short answer is that FSBOs are easier to convert. New agents frequently believe the exact opposite. They assume that FSBO leads will be tough and prospects. After all, if a homeowner went through all the work of listing the home themselves, why would they want to work with a real estate agent at the end of the process? However, FSBO leads are ready to sell NOW, and will often consider working with an agent if their property doesn’t sell immediately.

 

An agent should remember that it’s unlikely that a homeowner decided to list their property themselves on a whim. Frequently, an FSBO listing is a direct result of previous negative experiences with real estate professionals. So, it’s up to you to reassure the homeowner that you are different – reliable, professional, and driven. Focus your initial outreaches on identifying why homeowner is listing their property without an agent; then you can address their specific concerns and prove your trustworthiness. This process might take a few weeks. For example, an FSBO lead might tell you that she is listing her property to avoid paying a commission. At that point, the best response is likely to sincerely wish her luck and make sure she has your contact info. Then, if it’s been a few weeks and the property is still on the market, reach out again. You might find that the seller’s position on the value of a real estate agent has changed!

What is the BEST way to contact and nurture FSBO leads?

First, you’re going to have to pick up the phone. Sometimes, even warm leads require cold calls! The good news is that the rules of cold calling apply to FSBO leads as well. Doing your research, learning the best times to reach out, and using scripts can all help you land a listing appointment. But, your most important goal is to be the first real estate agent to contact an FSBO lead.

If you’re one of the first people, the conversation will typically be much more positive, and you will be able to create a better initial connection. And second, if they are an FSBO who is absolutely clueless, which happens more than you think, you have the opportunity to convert them immediately and demonstrate the value of hiring an agent. Call early and call often.” – Bryan Casella

 

Do Your Research

Your first contact with an FSBO lead will make or break your chances at transforming the lead into a client. So, do your due diligence before picking up the phone. Study the listing, and assess the seller’s pictures, description, and general marketing strategy. You want to address the lead’s specific situation, not offer generic advice. These are the areas you’ll want to focus on when doing your assessment:

  • Websites they are using (Zillow, Craigslist, and others)
  • Types of photos (professional vs. amateur)
  • The listing’s price point (is the price overvalued or undervalued compared to the assessment)
  • Online interest (how many people have saved or are following the listing)
  • How long the home has been on the market
  • Previous sale prices

The Initial Call: Stick to the Script

Scripts aren’t just for telemarketers. The best cold callers in the industry swear by scripts. Scripts save time and enable you to target leads effectively and systematically. Your initial call should have one simple goal: to set up a time to meet personally. Call on Mondays after work for the best results – sellers might be coming off a weekend with disappointing open houses, and their peaked frustrations make them more willing to talk to a real estate agent.

 

Follow Up

A good CRM – an essential tool for any real estate agent – will make follow up easy. This is important because all your research and scripts will go to waste if you don’t follow up with your prospects. You’ll want to follow up twice:

  1. Email Follow Up: create an email newsletter that speaks to your prospects pain points. Share a story about selling a property and highlight how smooth the process was for the sellers. It will demonstrate expertise, and remind your prospect that you are a trustworthy real estate agent.
  2. Phone Call Follow Up: After a week or two has passed, give your prospects another call. Make sure that you have the most up-to-date information about their listings so you can offer specific, targeted advice.

 

Why Should Agents Target Expired Listings?

 

Some real estate agents specialize in going after expired listings. For the right agent, with the right approach, expired listings are excellent opportunities. Like FSBOs, a good agent will try to figure out why the listing expired and offer the sellers a target solution – not empty promises. This is especially important for expired listings. Most – if not all – of expired listing leads had bad experiences with real estate agents in the past. Now, it’s important to understand that an expired listing isn’t always the result of agent neglect – price, condition, marketing, and any number of other factors could be the cause. But, fairly or unfairly, the seller likely blamed the agent and let the listing expire – creating an opportunity for you.

 

Be Prepared

It’s crucial that you start targeting expired listings before they actually expire. Search your local MLS hot sheet for listings that are about to expire, and keep a running list of the data. When you find a listing that you want to pursue, dedicate some time to studying. Identify what went wrong – inefficient marketing strategies, old images, limited online exposure, etc – and develop a targeted plan to solve the problems and sell the home. But, do this quickly, because you don’t want to miss your window.

 

Contact the Seller

Unlike FSBOs, a cold call might not be the right choice here. An expired listing lead is unlikely to be enthusiastic about having any discussions with unknown real estate agents at this point. This is where the expired listing letter comes in. Create a beautifully designed and professional printed letter that highlights your current listings and past success metrics. An expired listing letter is your chance to showcase your brand – and show how you’re different from other real estate agents. After the lead receives your letter, follow up multiple times, both through the mail and by email.

 

Let your letters and follow-ups tell your story. The lead will contact you when they’re ready, but only if you are respectful and persistent. When the lead contacts you to schedule an appointment, that is your opportunity to share your unique, well-considered plan to solve the problems they encountered when their property was on the market and back up your promises with past results.

Expired listings and FSBOs are warm leads and are great opportunities for any real estate agent. Strategy matters, and access to the best tools and apps for real estate agents, and expert mentorship will go a long way towards ensuring that you can capitalize on the opportunities they offer. Good luck!

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